About this Author
College chemistry, 1983
The 2002 Model
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: firstname.lastname@example.org
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September 12, 2014
Well, it was not a dull evening around the In the Pipeline headquarters last night. I submitted a link to Reddit for my post yesterday about Retrophin and Thiola, and that blew up onto that site's front page. The Corante server melted under the impact, which isn't too surprising, since it's struggling at the best of times. (A site move really is coming, and no, I can't wait, either, at this point.)
But then, to my great surprise, Martin Shkreli (CEO of Retrophin) showed up in the Reddit thread, doing an impromptu AMA (Ask Me Anything), which I have to say takes quite a bit of aplomb (or perhaps foolhardiness - I don't think too many other CEOs of any publicly traded corporations would have done it). But not too long after that, the entire thread vanished off the front page, and off of r/News, the subreddit where I'd submitted it.
Then I got a message from one of the moderators of r/News, saying that I'd been banned from it, and going on to say that I would likely be banned from the site as a whole. After having been on Reddit for seven years, that took me by surprise. As best I can figure, the thread itself was reported to r/Spam by someone, and the automated system took over from there. Over the years, I've submitted links to my blog posts, and Reddit, or some parts of it, anyway, has been notoriously touchy about that. The last time I submitted such a link, though, was back in February (and before that, August of 2013), so I'm not exactly a human spam-bot. We'll see what happens. Update: I was banned for some hours, but I've been reinstated.
But back to Retrophin, Thiola, and Martin Shrkeli. The entire Reddit thread can still be read here, via a direct link, although it can't be found in r/News any more. If you look for a user named "martinshkreli", you can see where he gets into the fray (I'm "dblowe" on the site, or perhaps I was?). You'll note that he gives out his cell phone, office phone, and e-mail, which again is not your usual CEO move - you have to give him that, although it does seem a bit problematic from a regulatory/compliance angle. So what arguments does he make for the Thiola price increase?
From what I can see, they boil down to this: patients themselves aren't going to be paying this increased price - insurance companies are. And Retrophin is actually going to be working on new formulations for the drug, which no one has done previously. He seems to have implied that the previous company (Mission Pharmacal) was reluctant to raise the price and take the public outcry, and stated (correctly) that Mission was having trouble keeping the drug in supply. He claims that the current price is still "pretty low", and that he does not expect any pushback from the eventual payers. There was also quite a bit about the company's dedication to patients, their work on other rare diseases, and so on.
He and I didn't cross paths much in the thread. I tried asking a few direct questions, but they weren't picked up on, so my take on Shkreli's answers will show up here. He's correct that the drug's availability was erratic, and he may well be correct that its price was too low for a company to deal with it properly. But if so, that does make you wonder what Mission Pharmacal was up to, and how they were sourcing the material.
He's also correct that Retrophin is planning to work on new formulations of the drug. But when you look at the company's investor presentation about Thiola, all that comes under a slide marked "Distribution and Intellectual Property". The plan seems to be that they'll introduce 250mg and 500mg dosages, at which time they'll discontinue the current 100mg formulation. Later on, they'll try to introduce a time-release formulation, at which time they'll discontinue the 250mg and 500mg forms. You can argue that this is helping patients, but you can also argue that it's making it as difficult as possible for anyone else to show bioequivalence and enter the market as well, assuming that anyone wants to.
And as I mentioned yesterday, the company does seem to care about someone else entering the market. My questions to Shkreli about the "closed distribution" model mentioned on the company's slides went unanswered, but the only interpretation I can give them is that Retrophin plans to use the FDA's risk management system to deny any competitors access to their formulations, in order to try to keep themselves as the sole supplier of Thiola in perpetuity. Patents at least expire: regulatory rent-seeking is forever.
Also left out of Shkreli's comments on Reddit are the issues on the company's slide titled "Pharmacoeconomics", where it says (vis-a-vis the other drug for cystinuria, penicillamine):
Current pricing of Thiola® - $4,000 PPPY
– Penicillamine pricing- $80,000-$140,000
• Thiola could support a significant price increase
Personally, I think that's the main reason for Retrophin's interest. You'll note that the price hike takes Thiola's cost right up to the penicillamine region (the price of that one is another story all its own). But to a first approximation, that's business. I've defended some drug company pricing decisions on this site before (although not all of them), so what's different this time?
I've been thinking hard about that one, and here's what I have so far. I think that pricing power of this sort is a powerful weapon. That's the reason for the patent system - you get a monopoly on selling your invention, but it's for a fixed period only, and in return you disclose what your invention is so that others can learn from it. And I think that this sort of pricing power should be a reward for actually producing an invention. That's the incentive for going through all the work and expense, the (time-limited) pot of gold at the end of the rainbow. I have a much lower opinion of seeing someone ram through a big price increase just because, hey, they can. Thiola has nothing to do with the patent system - it's off patent. What this situation looks like to me is regulatory rent-seeking. Celgene seems to be doing that too, with thalidomide (as mentioned yesterday), which is why they're being taken to court. Retrophin is betting that Thiola just isn't a big enough deal for anyone to go to that trouble, once they tell them to buzz off by using Celgene's strategy.
Businesses can, though, charge what they think the market will bear, and Retrophin's contribution to cystinuria therapy so far is to have realized that the market will bear a lot more than people had realized. But in an actual market, it would be easier for someone else to come in and compete on price. What Retrophin is planning is to use regulatory loopholes to keep anyone else from doing so, with no time limit until someone at the FDA does something about it. Cloaking this in a lot of noble-sounding talk about being the company that really cares about cystinuria patients is a bit stomach-turning. In my opinion.
+ TrackBacks (0) | Category: Business and Markets | Drug Prices | Why Everyone Loves Us
September 11, 2014
There's a drug called Thiola (tiopronin) that most people have never heard of. It's on my list of "smaller than aspirin" drugs, and I'd never heard of it until I put that one together. But thanks to a little company called Retrophin, we all get to hear about it now.
It's used to treat cystinuria, a rare disease that causes painful kidney complications, namely unusual kidney stones of pure cystine. And until recently, tiopronin (as a small, nearly forgotten drug for an orphan indication) was rather cheap. It was sold by a small company in Texas, Mission Pharmacal, until Retrophin bought the marketing rights earlier this year (a move complicated by the company's CEO, investor Martin Shkreli, who may have let the news of the deal leak on his Twitter account).
That link mentions part of Shkreli's business plan as "acquiring the rights to obsolete remedies Shkreli says can be put to new and lucrative purposes", and by gosh, that's certainly accurate. Retrophin is increasing the price of Thiola from $1.50 per pill to over $30 per pill. Because they can - they stated when they bought the drug that their first move would be to raise the price. New dosages are formulations are also mentioned, but the first thing is to jack the price up as high as it can be jacked. Note that patients take several pills per day. Shkreli is probably chortling at those Mission Pharmacal hicks who didn't realize what a gold mine they were sitting on.
Now, there have been somewhat similar cases in recent years. Colchicine's price went straight up, and (infamously) so did the progesterone formulation marketed as Makena. But in both those cases, the small companies involved took the compound back through the FDA, under an agency-approved program to get marketing exclusivity. I've argued here (see those last two links) that this idea has backfired several times, and that the benefit from the clinical re-evaluation and re-approval of these drugs has not been worth their vastly increased cost. I think that drug companies should be able to set the price of their drugs, because they have a lot of failures to make up for, but this FDA loophole gives people a chance to do minimal development at minimal risk and be handed a license to print money in return.
But this isn't even one of those cases. It's worse. Retrophin hasn't done any new trials, and they haven't had to. They've just bought someone else's old drug that they believed could be sold for twenty times its price, and have put that plan right into action. No development costs, no risks whatsoever - just slap a new sticker on it and put your hands over your ears. This is exactly the sort of thing that makes people go into fist-clenching rages about the drug industry, and with damn good reason. This one enrages me, and I do drug research for a living.
So thank you, Martin Shkreli. You've accelerated the progress of the giant hammer that's coming down on on all of us over drug pricing, and helped drag the reputation of the pharmaceutical industry even further into the swamp. But what the hell do you care, right? You're going to be raking in the cash. The only thing I can say about Shkreli and Retrophin is that they make the rest of the industry look good in comparison. Some comparison.
Update: There are some interesting IP aspects to this situation. As pointed out in the comments section, this compound has no exclusivity left and is off patent. So what's to stop someone else from filing an ANDA, showing bioequivalence, and competing on price (since there seems to be an awful lot of room in there)?
Simon Lackner on Twitter sent me to this presentation from Retrophin on their purchase of the Thiola license. In it, you can see that their plan for this: "Similar to Chenodal, Retrophin will move Thiola into closed distribution". Chenodal was the company's previous brainstorm of this sort, when they bought Manchester Pharmaceuticals, details of which can be seen on this presentation. What they say on that one is "Closed distribution system does not allow for generics to access product for bioequivalence study. ANDA filings are impossible unless generic company illegally penetrates specialty distributor. Recent Celgene v. Lannett case establishes precedent." So let's go back and take a look at Celgene v. Lannett.
That was a long-running dispute between the two companies over Lannett's desire to market a generic equivalent of Celgene's thalidomide. Lannett brought suit, accusing Celgene of using the drug's Risk Evaluation and Mitigation Strategy (REMS) improperly to deny potential competitors access to their product (which is needed to do a head-to-head comparison for an ANDA filing). As you can imagine, the REMS for thalidomide is pretty extensive and detailed! But there was no court decision in the case. The companies reached an out-of-court settlement before it went to trial in 2012, although I have to say that that Retrophin slide makes it sound like there's some sort of legal precedent that was set. There wasn't. The limits of REMS restrictions to deny access to a given drug are still an open question.
In late 2012, Acetelion and Apotex went at it over the same issue, this time over access to Tracleer (bosentan). The Federal Trade Commission filed an amicus brief, warning that companies could be abusing the REMS process to keep out competition. That case was also dismissed, though, after the two companies reached an out-of-court settlement of their own, removing another chance for a legal opinion on the subject.
But the issue is very much alive. Earlier this year, Mylan went after Celgene, also over thalidomide (and its follow-up, lenalidomide). Their complaint:
Celgene, a branded drug manufacturer, has used REMS as a pretext to prevent Mylan from acquiring the necessary samples to conduct bioequivalence studies, even after the FDA determined that Mylan’s safety protocols were acceptable to conduct those studies. In furtherance of its scheme to monopolize and restrain trade, Celgene implemented certain distribution restrictions that significantly limit drug product availability.
And this is the plan that Retrophin has in mind - they say so quite clearly in those two presentations linked above. What their presentations don't go into is that this strategy has been under constant legal attack. It also doesn't go into another issue: the use of REMS at all. Thalidomide, of course, is under all kinds of restrictions and has plenty of hideous risks to manage. Bosentan's not exactly powdered drink mix, either - patients require monthly liver function tests (risk of hepatoxicity) and monitoring of their hematocrit (risk of anemia). But what about Thiola/tiopronin? It's not under any risk management restrictions that I can see. Its side effects seem to be mainly diarrhea and nausea, which does not put it into the "This drug is so dangerous that we can't let any generic company get ahold of our pills" category. So how is Retrophin going to make this maneuver work?
Update: more on this issue here.
+ TrackBacks (0) | Category: Business and Markets | Drug Prices | Why Everyone Loves Us
August 15, 2014
There's a post by Peter Bach, of the Center for Health Policy and Outcomes, that's been getting a lot of attention the last few days. It's called "Unpronounceable Drugs, Incomprehensible Prices", and you know what it says.
No, really, you do, even if you haven't seen it. Too high, unconscionable, market can't support, what they can get away with, every year, too high. Before I get to the uncomfortable parts of my own take on this, let me stipulate a couple of things up front: (1) I do think that the industry is inviting trouble for itself by the way it it raising prices. It is in drug companies' short term interest to do so, but long term I worry that it's going to bring on some sort of price-control regimen. (2) Some drug prices probably are too high (but see below for what that means). Big breakthroughs can, at least in theory, command high prices, but not everything deserves to be priced at the level it is.
I was about to say "see below" again, but this paragraph is below, so here goes. Let me quote a bit from Bach's article:
Cancer drug prices keep rising. The industry says this reflects the rising costs of drug development and the business risks they must take when testing new drugs. I think they charge what they think they can get away with, which goes up every year. . .Regardless of the estimate, the pricing of new drugs for cancer and now other common diseases has come unglued from the rationale the industry has long espoused. Instead, pricing is explained by a phenomenon of increasing boldness by the industry against a backdrop of regulators and insurers who have no legal authority to dictate or even propose alternative pricing models.
Bach's first assertion is correct: drug companies are charging what they think they can get away with. In that, they are joined by pretty much every other business in the entire country. I did a post once where I imagined car sales transplanted into the world of drug sales- you couldn't just walk in and buy a car, for example. No, you had to go to a car consultant first, licensed by the state, who would examine your situation and determine the sort of car you needed. Once they'd given you a car prescription, you could then go to a dealer.
Well, we don't have that, but what car companies do charge is, well, what they can get away with. The same as steel companies, soft drink companies, cardboard box companies, grocery stores, and people who are selling their houses. You charge what you think the market will bear. Even people selling basic necessities of life like food and shelter charge what they think the market will bear. It's true that health care does feel different from any of those (a point that I went into in that post linked in the last paragraph), and there's the root of many a problem.
And, some will say, a big difference is that none of these other sellers have patents on their side, the legal right to put the screws on. But remember the flip side of the patent system: the legal certainty that you will lose that pricing power on a set date. The pricing of new drugs is completely driven by their expected patent lifetimes, because almost all the money that the developing company is ever going to make off the drug is going to have to be made during that period.
And sometimes that period isn't very long. The patent clock starts ticking a long time before a drug ever gets on the market; there are often only five to ten years left when it's finally approved for sale. There are other factors, too. Everyone is talking about the price of Sovaldi for hepatitis C, but no as many people have thought about the fact that the drug is, in fact, so effective that it has blown two other recently approved Hep C treatments right out of the market, well before their patent lifetimes had even expired. There really is competition in the drug business, and that sector shows it in action.
Now, what there isn't so much of is competition on price, true. And that's what you do see in the other businesses I named above. There are grocery stores that occupy the "Wonderful Prestigious High Quality" part of the market, and others that occupy the "Low Low Prices Every Day" part. (And interestingly, if you Venn-diagram out what's on the shelves of those two, there's still some overlap, allowing you to watch people paying wildly different prices for blueberries that came off the same truck, not to mention even less perishable stuff like aluminum foil). You don't see this in the drug industry, partly because for patented drugs we're never selling the same blueberries. the same gasoline, or the same khaki trousers. Even the biggest "me-too" drugs still differ from each other to some degree.
And that brings up another point. Bach uses (as his example of pricing in the cancer field) two Alk compounds, Xalkori (crizotinib) from Pfizer and Zykadia (ceritinib) from Novartis. Xalkori was first, and Bach makes a lot of the fact that Zykadia is priced higher, even though he says that Pfizer ran bigger clinical trials, had to work out the associated diagnostic test with the FDA, and launch the new mechanism into the oncology market. Novartis, he says, got to piggy-back on all that, and yet their drug is priced higher. There can be no other reason for that pricing decision, Bach says, other than that they can.
Let's go into some details that Bach's article leaves out. Zykadia is indeed second to market. But the time gap between the two drugs means that Novartis was working on it before they knew that Xalkori worked in the clinic. Bach makes an error here made by many others who have not actually done drug discovery work: the time course of these things is longer than it looks. A screen had to be run against Alk, compounds had to be confirmed, a medicinal chemistry team had to optimize them and make lots of new structures, all of which except one fell by the side of the road. The compound had to go through animal tests for efficacy and safety, and it had to be scaled up and formulated. And so on, and so on. Novartis did not sit back, watch Xalkori succeed, and then decide "Hey, we should get us some of that action, too".
Now Zykadia is, as Bach says, a second-line therapy. But it's approved for patients who do not respond to, or have become intolerant to Xalkori. So this "me-too" drug is, in fact, different enough to work on patients for whom Xalkori has failed. In fact, most patients will start to show relapse inside of a year on Xalkori, so it would appear that most non-small-cell lung cancer patients with multiyear survival are probably going to end up taking both compounds. Cancers mutate quickly, and we need all the options we can get - and guess what, some of those options are going to be second to market, because they can't all be first.
Another point to note is that while Zykadia was indeed approved on the basis of a smaller clinical trial set, that's because it received "breakthrough" designation from the FDA for accelerated review and approval. Startlingly, it actually got approved after Phase I trials alone. (Not bad for what Bach characterizes as a simple copycat drug, by the way). Novartis has run the compound in more clinical trials than that, and they continue to do so. It's not like they slipped in with a mere 163 patients and then trotted off to the FDA while brushing the dust off their hands. To find this out, by the way, you'll want to use "LDK378", the internal Novartis designation for the drug, and I'm passing this information on to Bach for free. Clinicaltrials.gov shows 13 trials in the US when you do that, and there are others outside the country as well.
Bach's article, as mentioned, plays down any differences between these two drugs, saying that "they have not been directly compared". But that's not accurate. Let me quote from that link in the paragraph just above:
As described by Shaw and colleagues in the New England Journal of Medicine, ceritinib has striking activity in ALK-rearranged NSCLC, both in treatment-naïve patients and in those who experienced tumor progression on crizotinib. . .The drug has clear pharmacological advantages over crizotinib. Its surprising level of activity in crizotinib-resistant tumors may be explained by its greater potency and its particular ability to inhibit ALK with gatekeeper mutations that confer resistance to crizotinib.
The two drugs have had a very important comparison: people who are going to die on Xalkori are going to survive longer if they switch to Zykadia. "Me-too" drug, my ass.
But rather than end on that note, tempting as that is, let me circle back to pricing once again. The price for these cancer drugs is not borne by individual patients emptying their piggy banks. It is borne by insurance, both private and government. And drug companies do indeed price their drugs at what the think the insurance plans will pay for them. This is not a secret, and should not be a surprise, and I continue to be baffled by people who react to this with horror and disbelief. Prices appear when you find out what the payers will pay. If Pfizer, Novartis, or Gilead priced their drugs at fifty million dollars a dose, no insurance company would reimburse. But the insurance companies are paying the current prices, and if they believe that they will be put out of business by doing so, they need to stop doing that. And they could.
They will, too, if we in the industry keep pushing them towards doing it. That's our big problem in drug development: our productivity has been too low, and we're making up for it by charging more money. But that can't go on forever. There are walls closing in on us from both sides, and we're going to have to scramble out from between them at some point. Pricing power can only take you so far.
+ TrackBacks (0) | Category: Cancer | Clinical Trials | Drug Prices | Regulatory Affairs | Why Everyone Loves Us
July 21, 2014
What a mess there is in the hepatitis C world. Gilead is, famously, dominating the market with Sovaldi, whose price has set off all sorts of cost/benefit debates. The companies competing with them are scrambling to claim positions, and the Wall Street Journal says that AbbVie is really pulling out all the stops. Try this strategy on for size:
In a lawsuit filed in February, AbbVie noted it patented the idea of combining two of Gilead's drugs—Sovaldi and an experimental drug called ledipasvir, which Gilead plans to combine into one treatment—and is therefore entitled to monetary damages if Gilead brings the combination pill to market. Legally, AbbVie can't market Sovaldi or ledipasvir because it doesn't have the patents on the underlying compounds. But it is legal for companies to seek and obtain patents describing a particular "method of use" of products that don't belong to them.
Gilead disputes the claims of AbbVie and the other companies. A spokeswoman said Gilead believes it has the sole right to commercialize Sovaldi and products containing Sovaldi's active ingredient, known as sofosbuvir. An AbbVie spokeswoman said the company believes Gilead infringes its patents, and that it stands behind the validity and enforceability of those patents.
You don't see that very often, and it's a good thing. Gilead is, naturally, suing Abbvie over this as well, saying that Abbvie has knowing mispresented to the USPTO that they invented the Gilead therapies. I'm not sure how that's going to play out: Abbvie didn't have to invent the drugs to get a method-of-use patent on them. At the same time, I don't know what sort of enablement Abbvie's patent claims might have behind them, given that these are, well, Gilead's compounds. The company is apparently claiming that a "sophisticated computer model" allows them to make a case that these combinations would be the effective ones, but I really don't know if that's going to cut it (and in fact, I sort of hope it doesn't). But even though I'm not enough of a patent-law guy to say either way, I'm enough of one to say, with great confidence, that this is going to be a very expensive mess to sort out. Gilead's also in court with Merck (and was with Idenix before Merck bought them), and with Roche, and will probably be in court with everyone else before all this is over.
This whole situation reminds me of one of those wildlife documentaries set around a shrinking African watering hole. A lot of lucrative drugs have gone off patent over the last few years, and a lot of them are heading that way soon. So any new therapeutic area with a lot of commercial promise is going to get a lot of attention, and start a lot of fighting. Legal battles aren't cheap on the absolute scale, but on the relative scale of the potential profits, they are. So why not? Claim this, claim that, sue everybody. It might work; you never know. Meanwhile, we have a line forming on the right of ticked-off insurance companies and government health plans, complaining about the Hep C prices, and while they wait they can watch the companies involved throwing buckets of slop on each other and hitting everyone over the head with lawsuits. What a spectacle.
+ TrackBacks (0) | Category: Business and Markets | Infectious Diseases | Patents and IP | Why Everyone Loves Us
May 16, 2014
I've been meaning to cover this controversy about Tamiflu (oseltamivir). The Cochrane group has reviewed all the clinical data obtainable on the drug's efficacy, and has concluded that it doesn't have much. That's in contrast to an earlier review they'd conducted in 2008, which said that, overall, the evidence was slightly positive.
But as Ben Goldacre details in that Guardian piece, a comment left on the Cochrane paper pointed out that the positive conclusions were almost entirely due to one paper. That one summarized ten clinical studies, but only two of the ten had ever appeared in the literature. And this sent the Cochrane Collaboration on a hunt to find the rest of the data, which turned out to be no simple matter:
First, the Cochrane researchers wrote to the authors of the Kaiser paper. By reply, they were told that this team no longer had the files: they should contact Roche. Here the problems began. Roche said it would hand over some information, but the Cochrane reviewers would need to sign a confidentiality agreement. This was tricky: Cochrane reviews are built around showing their working, but Roche's proposed contract would require them to keep the information behind their reasoning secret from readers. More than this, the contract said they were not allowed to discuss the terms of their secrecy agreement, or publicly acknowledge that it even existed. . .Then, in October 2009, the company changed tack. It would like to hand over the data, it explained, but another academic review on Tamiflu was being conducted elsewhere. Roche had given this other group the study reports, so Cochrane couldn't have them.
And so on and very much so on. Roche's conduct here appears shameful, and just the sort of thing that has lowered the public opinion of the entire pharma industry. And not just the public opinion: it's lowered the industry in the eyes of legislators and regulators, who have even more direct power to change the way pharma does business. Over the years, we've been seeing a particularly nasty Tragedy of the Commons - each individual company, when they engage in tactics like this to product an individual drug, lowers the general standing of the industry a bit more, but no one company has the incentive to worry about that common problem. They have more immediate concerns.
So what about Tamiflu? After years of wrangling, the data finally emerged, and they're not all that impressive:
So does Tamiflu work? From the Cochrane analysis – fully public – Tamiflu does not reduce the number of hospitalisations. There wasn't enough data to see if it reduces the number of deaths. It does reduce the number of self-reported, unverified cases of pneumonia, but when you look at the five trials with a detailed diagnostic form for pneumonia, there is no significant benefit. It might help prevent flu symptoms, but not asymptomatic spread, and the evidence here is mixed. It will take a few hours off the duration of your flu symptoms.
I've never considered it much of a drug, personally, and that's without any access to all this hard-to-get data. One of the biggest raps on oseltamivir is that it has always appeared to be most effective if it could be taken after you've been infected, but before you know you're sick. That's not a very useful situation for the real world, since a person can come down with the flu any time at all during the winter. Goldacre again:
Roche has issued a press release saying it contests these conclusions, but giving no reasons: so now we can finally let science begin. It can shoot down the details of the Cochrane review – I hope it will – and we will edge towards the truth. This is what science looks like. Roche also denies being dragged to transparency, and says it simply didn't know how to respond to Cochrane. This, again, speaks to the pace of change. I have no idea why it was withholding information: but I rather suspect it was simply because that's what people have always done, and sharing it was a hassle, requiring new norms to be developed. That's reassuring and depressing at the same time.
That sounds quite likely. No one wants to be the person who sets a new precedent in dealing with clinical data, especially not at a company the size of Roche, so what we might have here is yet another tragedy of the commons: it would have been in the company's best interest to have not gone through this whole affair, but there may have been no one person there who felt as if they were in any position to do something about it. When in doubt, go with the status quo: that's the unwritten rule, and the larger the organization, the stronger it holds. After all, if it's a huge, profitable company, the status quo clearly has a lot going for it, right? It's worked so far - who are you, or that guy over there, to think about rearranging it?
+ TrackBacks (0) | Category: Clinical Trials | Infectious Diseases | Why Everyone Loves Us
February 20, 2014
Here's Ian Read of Pfizer, on that company's reputation (and that of pharma in general):
. . .many people — including not only regulators but also legislators and their constituents — have a say in how we can conduct our business. At the same time, many have a great and sometimes emotionally charged interest in what our business produces, what we charge for our products and how we sell them, among other topics. And all of this together shines a brighter light on our business than most others, which makes our reputation all the more important to us. In fact, everything from government reimbursement for our medicines to protection of our intellectual property to our ability to continue innovating in our labs depends on our reputation. Indeed, our virtual license to operate depends on this. It depends on earning the respect of our regulators, legislators, healthcare professionals, patients, R&D partners and of our employees, current and future.
This is why we made “earning greater respect from society” one of our four business imperatives not long after I was named CEO of Pfizer in late 2010.
Without this respect and the consideration that comes with it we could not sustain our business, with its innumerable collaborative dependencies and its central place in an area of life so important to us all, our health. Making reputation and respect all the more important to us is knowing that we gain it in drops, but lose it in gallons.
True enough. Has Pfizer lost a gallon or two? He doesn't really say. His piece also does not say if there are any specific actions that Pfizer (or other companies) have taken that might have caused some of this respect leakage. Nor does it go into any detail about what steps might be taken to get any of it back, other than boardroom-speak like "connect better with our stakeholders". But it's a start, I suppose.
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January 16, 2014
If you work in the drug industry, and for some reason you feel that your blood pressure isn't quite high enough today, a look at this debate at the British Medical Journal should fix that up for you. "Should journals stop publishing research funded by the drug industry?" is the title - there, doesn't that constrict your blood vessels already?
Taking the "Yes, they should" side are Richard Smith (former editor of the journal, now with a British organization called "Patients Know Best", and Peter C. Gøtzsche of the Nordic Cochrane Center. Here's their opening statement, and Gøtzsche's recent opinion piece in the same journal is a good harbinger, as it turns out:
The BMJ and its sibling journals have stopped publishing research funded by the tobacco industry for two main reasons: the research is corrupted and the companies publish their research to advance their commercial aims, oblivious of the harm they do. But these arguments apply even more strongly to research funded by the drug industry, and we suggest there is a better way to communicate the results of trials that would be safer for patients.
Prescribed drugs are the third leading cause of death, partly because of flaws in the evidence published in journals. We have long known that clinical trials funded by the drug industry are much more likely than publicly funded trials to produce results favourable to the company. The reason is obvious. The difference between an honest and a less than honest data analysis can be worth billions of euros, and the fraudulent trials of some cyclo-oxygenase-2 inhibitors for arthritis and selective serotonin reuptake inhibitors for depression are good examples
They're absolutely right about the financial motivations, and a first-rate moral hazard it is, too. But the comparison with the tobacco companies is a real pencil-snapper (as they no doubt intended it to be). They go on about prescription drugs being the "third largest cause of death", about "drug industry crimes", and so on. To be fair, and first let me brush these pencil fragments off my desk, the pharmaceutical companies have laid themselves wide open to these sorts of attacks, painting huge fluorescent bulls-eye targets on themselves again and again. But still.
This piece casually mentions that "olanzapine (Zyprexa), has probably caused 200 000 deaths", footnoting a book by one of the two authors. I seem to have missed that. Many antipsychotic drugs are associated with QT prolongation, which can lead to fatal heart arrythmias, but the worst of them have long been taken out of use. The FDA is investigating two deaths following injection of long-acting olanzapine, not two hundred thousand. Olanzapine has plenty of side effects, though, including weight gain (which can exacerbate Type II diabetes), and it has a warning label in the US about giving it to elderly patients under any conditions. But two hundred thousand deaths? I can't find any support for any such figure; it appears in Gøtzsche's book and apparently nowhere else, so citing it in this article as if it were a well-established fact is a nice move.
Taking the "No" side is Trish Groves of the BMJ itself. She rejects the analogy with the tobacco industry - as she should, because it's offensive and ridiculous. She goes on to detail the problems with industry-reported results and what the journal is doing about them. As opposed to the "Yes" side, it's a pretty reasonable piece. One of the things she mentions is that investigator-led trials have their own sources of bias. Very few people organizing an effort the size of a useful clinical trial will be disinterested in its results, unfortunately.
How much can we trust the evidence base for drugs in current use? It’s hard to tell, given the woeful legacy of widespread non-registration, non-publication, and selective reporting of clinical trials. Much of this reporting bias also applies to investigator led trials, and the many steps now being taken to mandate prospective trial registration, ensure reporting of all results, and access patient level data on interventions’ benefits and harms, as called for by the AllTrials campaign, must apply to them as much as to industry led trials. Moreover, new rules on transparency need to be applied retrospectively: laudable plans to provide access to data on new drugs aren’t enough.
That’s why the BMJ is keen to publish papers from the RIAT (Restoring Invisible and Abandoned Trials) initiative, through which academics who find previously unreported trials can write them up and publish them if the original investigators decline to do so. We also welcome “negative” trials that find no evidence of benefit, as long as their research questions are important and their methods robust, and we’re particularly interested in publishing trials of comparative effectiveness. Both these types of study can be much more useful to clinical practice than the placebo controlled trials that regulators demand. . .
It should be no great task to guess which side of this debate I favor - after all, I'm one of those evil drug company scientists who mow down the customers by the hundreds of thousands. I do wish that Groves' response had strayed a bit from the topic at hand and addressed those accusations of mass murder (that's what they are). I realize that it must be hard to tell a former editor to tone things down and go back for a rewrite. But still.
+ TrackBacks (0) | Category: Clinical Trials | The Scientific Literature | Why Everyone Loves Us
July 26, 2013
This is exactly the kind of headline the drug industry does not need. Via FierceBiotech, here's a story in The Guardian on the recent efforts to get companies to disclose more about the clinical trial results for investigational drugs. GSK is the company that seems to have done the most in this regard, but the European Medicines Agency (EMA) is proposing mandatory disclosure of trial results into a public database. That's a lot further than most companies are willing to go - so what to do?
The strategy was drawn up by two large trade groups, the Pharmaceutical Research and Manufacturers of America (PhRMA) and the European Federation of Pharmaceutical Industries and Associations (EFPIA), and outlined in a memo to senior industry figures this month, according to an email seen by the Guardian.
The memo, from Richard Bergström, director general of EFPIA, went to directors and legal counsel at Roche, Merck, Pfizer, GSK, AstraZeneca, Eli Lilly, Novartis and many smaller companies. It was leaked by a drugs company employee.
The email describes a four-pronged campaign that starts with "mobilising patient groups to express concern about the risk to public health by non-scientific re-use of data". Translated, that means patient groups go into bat for the industry by raising fears that if full results from drug trials are published, the information might be misinterpreted and cause a health scare.
That's what. Other parts of the strategy include "discussions with scientific associations" about the risks of data sharing and getting other companies in other industries that might be affected by similar proposals to lobby against this as well. None of this is to be done, it seems, under the banner of "Here's why the drug industry opposes this idea". It's all a spontaneous upwelling.
Now, I don't want to seem too shocked: this sort of thing is done all the time in politics. Every time some big regulatory or legislative idea comes along that might cramp some large group's style, you'll see all kinds of organizations pop up with serious-sounding names: "Public Coalition For XYZ" "United Citizens For QRS" and so on. Use of these "instant grassroots" fronts has earned the term "astroturfing" (which also means that any time some actual group of people comes together for real, their political opponents will always accuse them of being an astroturfed gang of shills).
Some of the patient advocacy groups the Guardian talks about are probably in this category. But many of them are real organizations that have been around for some time. There's an evolutionary dance going on, though: while the advocacy groups want to get enough influence with the drug companies to steer their decisions, the drug companies want to get enough influence with the advocacy groups to steer theirs, for just the reasons we're seeing now. And in that second half of the process, the pharma industry has a powerful offer to make: we'll fund you. At that point, every advocacy group (in any industry) has some big decisions to make about what they're trying to do and how best to do it. Will taking the money compromise them? Or will that be outweighed by what they can do with the funding?
But just because this is a common practice doesn't mean that it's right. Or a good idea. Or, at the very least, the sort of thing that the industry should be seen to be doing. Secret memos detailing a behind-the-scenes campaign of influence to avoid disclosing data? The people at PhRMA and EFPIA should apply a simple test to ideas like this: if it sounds like a bad movie plot, if it sounds like something made up by people who hate you. . .maybe it's not such a good plan.
Update: here's more on an effort to pull out unpublished clinical trial data. "Publish or be published" is their motto. The editors of the British Medical Journal and PLoS Medicine have endorsed the idea.
+ TrackBacks (0) | Category: Clinical Trials | Why Everyone Loves Us
May 23, 2013
FiercePharma has some good figures to back up my posts the other day on R&D spending versus marketing. I mentioned how many people, when they argue that drug companies spend more on marketing than they do on research, are taking the entire SG&A number, and how companies tend to not even break out their marketing numbers at all.
Well, the folks at Fierce had a recent article on marketing budgets in the business, and they take Pfizer's numbers as a test case. That's actually a really good example: Pfizer is known as a mighty marketing machine, and for a long time they had what must have been the biggest sales force in the industry. They also have a lower R&D spend than many of their peers, as a percentage of sales. So if you're looking for the sort of skewed priorities that critics are always complaining about, here's where you'd look.
Pfizer spent $622 million on advertising last year. Man, that's a lot of money. It's so much that it's not even one-tenth of their R&D budget. Ah, you say, but ads are only part of the story, and so they are. But while we don't have a good estimate on that for Pfizer, we do have one for the industry as a whole:
DTC spending is only part of the overall sales-and-marketing budget, of course. Detailing to doctors costs a pretty penny, and that's where drugmakers spend much of their sales budget. Consumer advertising spending dropped by 11.5% in 2012 to $3.47 billion. Marketing to physicians, according to a Johns Hopkins Bloomberg School of Public Health study, amounted to $27.7 billion in 2010; that same year, DTC spending was just over $4 billion.
That's a total for 2010 of more than $31 billion, the best guess-timate we can come up with on short notice. According to FierceBiotech's 2010 R&D spending report, the industry shelled out $67 billion on research that year--more than twice our quick-and-dirty marketing estimate.
So let's try for a Pfizer estimate then. If they stayed at roughly that ratio, then they would have spent seven times as much marketing to physicians as they did on advertising per se. That gives a rough number of $4.3 billion, plus that $622 million, for a nice round five billion dollars of marketing. That's still less than their R&D budget of $7.9 billion, folks, no small sum. (And as for that figure from a couple of years ago about how it only costs $43 million to find a new drug, spare me. Spare everyone. Pfizer is not allocating $7.9 billion dollars for fun, nor are they planning on producing 184 new drugs with that money at $43 million per, more's the pity.)
So let me take a stronger line: Big Pharma does not spend more on marketing than it does on R&D. This is a canard; it's not supported by the data. And let me reiterate a point that's been made here several times: no matter what the amount spent on marketing, it's supposed to bring in more money than is spent. That's the whole point of marketing. Even if the marketing budget was the same as the R&D, even if it were more, it still wouldn't get rid of that point: the money that's being spent in the labs is money that came in because of marketing. Companies aren't just hosing away billions of dollars on marketing because they enjoy it; they're doing it to bring in a profit (you know, that more-money-than-you-spend thing), and if some marketing strategy doesn't look like it's performing, it gets ditched. The response-time loop over there is a lot tighter than it is in research.
There. Now the next time this comes up, I'll have a post to point to, with the numbers, and with the links. It will do no good at all.
Note: I am not saying that every kind of drug company marketing is therefore good. Nor am I saying that I do not cringe and roll my eyes at some of it. And yes indeed, companies can and do cross lines that shouldn't be crossed when they get to selling their products too hard. Direct-to-consumer advertising, although it has brought in the money, has surely damaged the industry from other directions. All this is true. But the popular picture of big drug companies as huge advertising shops with little vestigial labs stuck to them: that isn't.
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May 16, 2013
"Can you respond to this tripe?" asked one of the emails that sent along this article in The Atlantic. I responded that I was planning to, but that things were made more complicated by my being extensively quoted in said tripe. Anyway, here goes.
The article, by Brian Till of the New America Foundation, seems somewhat confused, and is written in a confusing manner. The title is "How Drug Companies Keep Medicine Out of Reach", but the focus is on neglected tropical diseases, not all medicine. Well, the focus is actually on a contested WHO treaty. But the focus is also on the idea of using prizes to fund research, and on the patent system. And the focus is on the general idea of "delinking" R&D from sales in the drug business. Confocal prose not having been perfected yet, this makes the whole piece a difficult read, because no matter which of these ideas you're waiting to hear about, you end up having a long wait while you work your way through the other stuff. There are any number of sentences in this piece that reference "the idea" and its effects, but there is no sentence that begins with "Here's the idea"
I'll summarize: the WHO treaty in question is as yet formless. There is no defined treaty to be debated; one of the article's contentions is that the US has blocked things from even getting that far. But the general idea is that signatory states would commit to spending 0.01% of GDP on neglected diseases each year. Where this money goes is not clear. Grants to academia? Setting up new institutes? Incentives to commercial companies? And how the contributions from various countries are to be managed is not clear, either: should Angola (for example) pool its contributions with other countries (or send them somewhere else outright), or are they interested in setting up their own Angolan Institute of Tropical Disease Research?
The fuzziness continues. You will read and read through the article trying to figure out what happens next. The "delinking" idea comes in as a key part of the proposed treaty negotiations, with the reward for discovery of a tropical disease treatment coming from a prize for its development, rather than patent exclusivity. But where that money comes from (the GDP-linked contributions?) is unclear. Who sets the prize levels, at what point the money is awarded, who it goes to: hard to say.
And the "Who it goes to" question is a real one, because the article says that another part of the treaty would be a push for open-source discovery on these diseases (Matt Todd's malaria efforts at Sydney are cited). This, though, is to a great extent a whole different question than the source-of-funds one, or the how-the-prizes-work one. Collaboration on this scale is not easy to manage (although it might well be desirable) and it can end up replacing the inefficiencies of the marketplace with entirely new inefficiencies all its own. The research-prize idea seems to me to be a poor fit for the open-collaboration model, too: if you're putting up a prize, you're saying that competition between different groups will spur them on, which is why you're offering something of real value to whoever finishes first and/or best. But if it's a huge open-access collaboration, how do you split up the prize, exactly?
At some point, the article's discussion of delinking R&D and the problems with the current patent model spread fuzzily outside the bounds of tropical diseases (where there really is a market failure, I'd say) and start heading off into drug discovery in general. And that's where my quotes start showing up. The author did interview me by phone, and we had a good discussion. I'd like to think that I helped emphasize that when we in the drug business say that drug discovery is hard, that we're not just putting on a show for the crowd.
But there's an awful lot of "Gosh, it's so cheap to make these drugs, why are they so expensive?" in this piece. To be fair, Till does mention that drug discovery is an expensive and risky undertaking, but I'm not sure that someone reading the article will quite take on board how expensive and how risky it is, and what the implications are. There's also a lot of criticism of drug companies for pricing their products at "what the market will bear", rather than as some percentage of what it cost to discover or make them. This is a form of economics I've criticized many times here, and I won't go into all the arguments again - but I will ask:what other products are priced in such a manner? Other than what customers will pay for them? Implicit in these arguments is the idea that there's some sort of reasonable, gentlemanly profit that won't offend anyone's sensibilities, while grasping for more than that is just something that shouldn't be allowed. But just try to run an R&D-driven business on that concept. I mean, the article itself details the trouble that Eli Lilly, AstraZeneca, and others are facing with their patent expirations. What sort of trouble would they be in if they'd said "No, no, we shouldn't make such profits off our patented drugs. That would be indecent." Even with those massive profits, they're in trouble.
And that brings up another point: we also get the "Drug companies only spend X pennies per dollar on R&D". That's the usual response to pointing out situations like Lilly's; that they took the money and spent it on fleets of yachts or something. The figure given in the article is 16 cents per dollar of revenue, and it's prefaced by an "only". Only? Here, go look at different industries, around the world, and find one that spends more. By any industrial standard, we are plowing massive amounts back into the labs. I know that I complain about companies doing things like stock buybacks, but that's a complaint at the margin of what is already pretty impressive spending.
To finish up, here's one of the places I'm quoted in the article:
I asked Derek Lowe, the chemist and blogger, for his thoughts on the principle of delinking R&D from the actual manufacture of drugs, and why he thought the industry, facing such a daunting outlook, would reject an idea that could turn fallow fields of research on neglected diseases into profitable ones. "I really think it could be viable," he said. "I would like to see it given a real trial, and neglected diseases might be the place to do it. As it is, we really already kind of have a prize model in the developed countries, market exclusivity. But, at the same time, you could look at it and it will say, 'You will only make this amount of money and not one penny more by curing this tropical disease.' Their fear probably is that if that model works great, then we'll move on to all the other diseases."
What you're hearing is my attempt to bring in the real world. I think that prizes are, in fact, a very worthwhile thing to look into for market failures like tropical diseases. There are problems with the idea - for one thing, the prize payoff itself, compared with the time and opportunity cost, is hard to get right - but it's still definitely worth thinking about. But what I was trying to tell Brian Till was that drug companies would be worried (and rightly) about the extension of this model to all other disease areas. Wrapped up in the idea of a research-prize model is the assumption that someone (a wise committee somewhere) knows just what a particular research result is worth, and can set the payout (and afterwards, the price) accordingly. This is not true.
There's a follow-on effect. Such a wise committees might possibly feel a bit of political pressure to set those prices down to a level of nice and cheap, the better to make everyone happy. Drug discovery being what it is, it would take some years before all the gears ground to a halt, but I worry that something like this might be the real result. I find my libertarian impulses coming to the fore whenever I think about this situation, and that prompts me to break out an often-used quote from Robert Heinlein:
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as "bad luck."
+ TrackBacks (0) | Category: Drug Development | Drug Prices | Why Everyone Loves Us
May 9, 2013
Vytorin's been discussed several times around here. The combination of Zetia (ezetimibe), the cholesterol absorption inhibitor discovered at Schering-Plough, with Merck's simvastatin looked as if it should be a very effective cholesterol-lowering medication, but the real-world data have been consistentlypuzzling. There's a big trial going on that people are hoping will clarify things, but so far it's had the opposite effect. It's no exaggeration to say that the entire absorption inhibitor/statin combination idea is in doubt, and we may well learn a lot about human lipidology as we figure out what's happened. It will have been an expensive lesson.
So in the midst of all this, what does Merck do but trot out anotherezetimibe/statin combination? Liptruzet has atorvastatin (generic Lipitor) in it, instead of simavastatin (generic Zocor), and what that is supposed to accomplish is a mystery to me. It's a mystery to Josh Bloom over at the American Council for Science and Health, too, and he's out with an op-ed saying that Merck should be ashamed of itself.
I can't see how he's wrong. What I'm seeing is an attempt by Merck to position itself should the ongoing Vytorin trial actually exonerate the combination idea. Vytorin, you see, doesn't have all that much patent lifetime left; its problems since 2008 have eaten the most profitable years right out of its cycle. So if Vytorin turns out to actually work out, after all the exciting plot twists, Merck will be there to tell people that they shouldn't take it. No, they should take exciting new Liptruzet instead. It's newer.
If anyone can think of a reason why this doesn't make Merck look like shady marketeers, I'd like to hear it. And (as Bloom points out) it doesn't make the FDA look all that great, either, since I'm sure that Liptruzet will count towards the end-of-the-year press release about all the innovative new drugs that the agency has approved. Not this time.
Update: John LaMattina's concerned about that last part, too.
+ TrackBacks (0) | Category: Cardiovascular Disease | Why Everyone Loves Us
April 29, 2013
There's been a lot of rumbling recently about the price of new cancer drugs (see this article for a very typical reaction). It's a topic that's come up around here many times, as would be only natural - scrolling back in this category will turn up a whole list of posts.
I see that Bernard Munos has weighed in on the topic in Forbes. He's not being Doctor Feelgood about it, either:
All this adds up to a giant pushback against the astronomical drug prices that are becoming commonplace. It seems that price tags of $100,000 or above are becoming the norm. Of 12 cancer drugs approved in 2012, 11 cost more than that. As more drugs are offered at that level and their sponsors get away with it, it seems to set a floor that emboldens drug companies to push the envelope. They are badly misjudging the brewing anger.
The industry’s standard defense has been to run warm-hearted stories about the wonders of biomedical innovation, and to point out that drugs represent only 10% of healthcare costs. Both arguments miss the point. Everyone loves biomedical innovation, but the industry’s annual output of 25 to 35 new drugs is a lousy return for its $135 billion R&D spending. . .
That's a real problem. We in the industry concentrate on our end of it, where we wonder how we can spend this much for our discovery efforts and survive. But there are several sides to the issue. From one angle, as long as we can jack up the prices high enough on what does get through, we can (in theory) stay in business. That's not going to happen. There are limits to what we can charge, and we're starting to bang up against them, in the way that a Martingale player at a roulette table learns why casinos have betting limits at the tables. It's not a fun barrier to bump into.
And there's the problem Munos brings up, which is one that investors have been getting antsy about for some time: return on capital. The huge amounts of money going out the door are (at least in some cases) not sustainable. But we're not spending our money as if there were a problem:
Perhaps the mood would be different if the industry was a model of efficiency, but this is hardly the case. Examples of massive waste are on display everywhere: Pfizer wants to flatten a 750,000-square-foot facility in Groton, CT, and won’t entertain proposals for alternative uses. Lilly writes off over $100 million for a half-built insulin plant in Virginia, only to restart the project a few years later in Indiana. AstraZeneca shutters its R&D labs at Alderley Park and goes on to spend $500 million on a new facility in Cambridge.
Munos is right. We have enough trouble already without asking for more. Don't we?
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February 11, 2013
John LaMattina takes off after PhRMA's effectiveness here at Forbes. His two points are release of clinical trial data and openness about consultant payments to physicians. And I agree with him on both of those - as I've said here many times, we're not going to regain anyone's trust until we stop giving people reasons to think that we're trying to hide things from them.
The problem, though, as LaMattina shows, is PhRMA (the biggest industry association) doesn't seem especially interested in taken on these issues. Are they stupid, or short-sighted? Possibly. But when I see something like this going on, my assumption is to assume that the people involved are rational actors, who have made an informed decision. And that means that I'm somehow not looking at things the same way that they are.
My guess is that PhRMA's sees the public perception of the drug industry as a comparatively minor problem. The thing is, even if everyone liked the drug industry just fine, sales of prescription drugs would be about the same. They're not purchased because people have good feelings about the companies; they're not all that discretionary. People take medicines grudgingly, for the most part, because they're trying to correct something that's gone wrong.
So what's PhRMA's major concern? Regulatory and legislative affairs. Our industry is absolutely, crucially dependent on government's attitude towards it. We are regulated heavily at every point once we start to close in on an actual drug. So if you're trying to spend your time and effort in the most cost-effective way, you will go to Congress, to the regulatory agencies, to anyone at any level in government who can make and modify the rules that you have to live under. And you will spend your time and money making sure that the rules you like stay in force, that ones that you like even better are on the table, and that ones you don't like get slowed or watered down.
It's true that doing this would be somewhat easier if everyone had a better opinion of us. That's especially true for avoiding the regulations and laws that you don't like; that would be helped if you could go to the people involved with a big groundswell of public support behind you. But trying to influence the public to the point where that would reliably affect legislation is a very large undertaking. The same amount of effort (and money) will have far more impact if applied directly to the legislators and regulators themselves, rather than trying to use public opinion as a lever on them. It's just not cost-effective. This is especially true if you've already worked yourself into a situation where your industry is unpopular; trying to reverse that becomes a bigger and bigger proposition, which makes the alternatives look even more effective. And this is, after all, the way that every other interest group (well, every effective one) works in a highly regulated environment. What else would one expect?
That's my answer, then, to the question of why PhRMA doesn't do more to improve the industry's image. It's not a priority. Thoughts?
Notes: LaMattina's post is also partly a reponse to Ben Goldacre's book "Bad Pharma". I have been meaning to take that one on, but it's also a large undertaking. Book-length arguments are often best addressed at book length, unfortunately. But I do plan to do a big roundup on the subject.
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December 20, 2012
John LaMattina (ex-head of Pfizer's global R&D) has a new book out about the industry, called Devalued and Distrusted. He tells Pharmalot that he got the idea to write a sequel to his earlier book, Drug Truths, when he appeared on the "Dr. Oz" show:
. . .and out of the blue last year, I got a call from The Dr. Oz show and they had a guest who wrote a book that was about America being overdosed. And when I got there, I saw a banner that says ‘four secrets drug companies don’t want you to know.’ I realized that never thought to ask the title of the show. . .It was a pretty long half hour and there were pretty much the standard attacks on industry – inventing diseases, prescribing drugs you don’t need. When I left, I clearly got the impression that the message needs to get out more. I was the only one from industry and there were all sorts of attacks. And everybody takes for granted that everything they say is absolutely right. So I decided to write a balanced book that deals with some of these issues.
Good luck to it, to him, and to us. I hope it reaches some of the people who need to hear it (which is one reason I'm highlighting it here), but I think that the ignorance out there (some of which is willful) is thick, deep, and dense. People feel differently about their health (and their health care) than they do about most other things in their lives, and there are always people ready to exploit that difference. Drug companies do so, with what I continue to think are net positive results, although there are entries on both sides of that ledger. And the people who go on about Evil Pharma. . .well, in many cases, they too have something to sell. A book or newsletter of their own, their services as a consultant or a guest on the next TV show, ads from their web site, a line of nutritional supplements and herbal wonder pills, what have you.
It's human nature to enjoy having enemies, too - something to define yourself against. It would be good to have the drug companies serve that role less often, though, and the best way to do that, I think, is still to try to help people to understand what it's like to actually discover and develop a drug. (LaMattina's been trying to get that across, too). But not everyone wants to hear about that, or will believe it when they do. There's some part of the population that believes (sometimes quite correctly) that there's something wrong with their health, and moreover, some of them believe (sometimes quite incorrectly) that this must be someone else's fault. Likely as not, some of these people will tell you, it was Big Pharma, who either made them sick in the first place, made them sicker once they took their drugs, or is to blame for not providing any drugs for them to take at all.
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December 14, 2012
John LaMattina takes on Marcia Angell and her recent interview. It sounds like he made it farther into the podcast than I could:
“The drug companies do almost no innovation nowadays….. All they have to do is the late development. And that’s the clinical trials. Now that is an expensive part of the process. But it is not an innovative part of the process.”
. . .innovation doesn’t only occur in discovery research labs. Translating laboratory science into meaningful clinical science is quite challenging. Yet, many of the new drugs that are now being approved to treat various cancers have been developed through innovative paradigms and experimental methods developed by scientists and physicians in the pharmaceutical industry. For Angell to dismiss this so blithely is insulting.
"Insulting" is the word, and I have little doubt that this is a deliberate feature of Angell's take on the drug industry. Language like this gets attention. It brings in page views; it sells books. It gets you speaking engagements. As far as I can see, you bring in Marcia Angell to watch her attack pharmaceutical companies - that's her niche.
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December 5, 2012
You'll have seen the headlines about off-label promotion of drugs by pharma companies. No, not the ones that decry it as a shady marketing technique, punishable by huge fines. I mean the ones about how a federal court has ruled that it's completely legal.
This came as a surprise, at least to me. The U. S. Court of Appeals, in United States v. Caronia ruled explicitly that "government cannot prosecute pharmaceutical manufacturers and their representatives under the (Food, Drug and Cosmetic Act) for speech promoting the lawful, off-label use of an FDA-approved drug." That does go up against the previous belief that if it's off-label, it isn't lawful. So how did the court get here, and what happens next?
The case concerns Alfred Caronia, a sales rep for Orphan Medical, who was prosecuted for off-label promotion of Xyrem (the sodium salt of gamma-hydroxybutyrate, GHB) in 2005. (The company has since been acquired by Jazz Pharmaceuticals of Dublin). He appealed his conviction on First Amendment grounds, and this argument seems to have rung the bell with the appeals court. Here's a writeup at the FDA Law Blog:
The Court explained that FDA’s construction of the FDCA legalizes the outcome of off-label use by doctors, but “prohibits the free flow of information that would inform that outcome.” The Second Circuit concluded that “the government’s prohibition of off-label promotion by pharmaceutical manufacturers ‘provides only ineffective or remote support for the government’s purpose.’”
There's some case law that backs up this decision, namely Sorrell v. IMS Health Inc.. The Supreme Court decision, for those of you who are truly hard-core about this stuff, is here. In that one, the court found that a Vermont law that restricted physicians from selling information on their prescription history violated the First Amendment as well. From this earlier post at the FDA Law Blog, it appears that a lot of the maneuvering during this latest case was about whether Sorrell applied here or not. That post also makes it clear that the FDA's own statements on the legality of off-label promotion are, to put it gently, unclear.
Well, this ruling certainly clears it up. For now. Here's the 82-page decision itself, with a vigorous dissent from the third judge on the appellate panel. But I can tell you that I'm not reading it yet. That's because I expect the FDA to try to take this to the Supreme Court, and it looks (to my non-lawyer eyes) like just the sort of thing they'd grant certiorari to. So I don't think this story is done - but for now, off-label promotion cannot be prosecuted.
And that's a big change indeed. This whole issue has been a black eye for the industry over the years, because (for one thing) the FDA made it clear, over and over, that it believed the practice was illegal, and that companies (and individuals) could be prosecuted for it. In that atmosphere, a company that went ahead was doing so in knowing violation of the rules as they were understood. No drug company, as far as I know, ever tried to make a First Amendment court case out of an FDA fine for off-label promotion (if anyone knows of any examples, send 'em along). Instead, they argued about whether it had happened or not, how much of it there really was, then paid the whacking fines, and then (likely as not) went out and did it some more. And they did it not because they were free-speech activists, but because that's where a lot of big money was to be found. Not the sort of thing that covers you with glory, for sure.
So it's not like this latest ruling is going to rehabilitate many reputations in the marketing departments. It's more like "Great! Turns out to be legal after all! Who knew?"
+ TrackBacks (0) | Category: Business and Markets | Regulatory Affairs | Why Everyone Loves Us
December 3, 2012
I have tried to listen to this podcast with Marcia Angell, on drug companies and their research, but I cannot seem to make it all the way through. I start shouting at the screen, at the speakers, at the air itself. In case you're wondering about whether I'm overreacting, at one point she makes the claim that drug companies don't do much innovation, because most of our R&D budget is spent on clinical trials, and "everyone knows how to do a clinical trial". See what I mean?
Angell has many very strongly held opinions on the drug business. But her take on R&D has always seemed profoundly misguided to me. From what I can see, she thinks that identifying a drug target is the key step, and that everything after that is fairly easy, fairly cheap, and very, very profitable. This is not correct. Really, really, not correct. She (and those who share this worldview, such as her co-author) believe that innovation has fallen off in the industry, but that this has happened mostly by choice. Considering the various disastrously expensive failures the industry has gone through while trying to expand into new diseases, new indications, and new targets, I find this line of argument hard to take.
So, I see, does Alex Tabarrok. I very much enjoyed that post; it does some of the objecting for me, and illustrates why I have such a hard time dealing point-by-point with Angell and her ilk. The misconceptions are large, various, and ever-shifting. Her ideas about drug marketing costs, which Tabarrok especially singles out, are a perfect example (and see some of those other links to my old posts, where I make some similar arguments to his).
So no, I don't think that Angell has changed her opinions much. I sure haven't changed mine.
+ TrackBacks (0) | Category: Business and Markets | Drug Development | Drug Industry History | Drug Prices | Why Everyone Loves Us
October 11, 2012
GlaxoSmithKline took an unusual step today: they announced that they're opening up clinical trial data:
"GSK is fully committed to sharing information about its clinical trials. It posts summary information about each trial it begins and shares the summary results of all of its clinical trials – whether positive or negative – on a website accessible to all. Today this website includes almost 4,500 clinical trial result summaries and receives an average of almost 10,000 visitors each month. The company has also committed to seek publication of the results of all of its clinical trials that evaluate its medicines – regardless of what the results say – to peer-reviewed scientific journals.
Expanding further on its commitments to openness and transparency, GSK also announced today that the company will create a system that will enable researchers to access the detailed anonymised patient-level data that sit behind the results of clinical trials of its approved medicines and discontinued investigational medicines. To ensure that this information will be used for valid scientific endeavour, researchers will submit requests which will be reviewed for scientific merit by an independent panel of experts and, where approved, access will be granted via a secure web site. This will enable researchers to examine the data more closely or to combine data from different studies in order to conduct further research, to learn more about how medicines work in different patient populations and to help optimise the use of medicines with the aim of improving patient care."
I very much applaud this step, and I very much hope that the rest of the industry follows suit. We're getting a lot of flack - and we deserve it - for the way that we handle clinical trial data, with accusations of cherry-picking, data-burying, and all the associated sins. (Ben Goldacre has a book out on the drug industry, which I'm going to read more of before posting on, and he's taken the industry to task on this very point in it). The only cure for this will be to open the books as much as possible - saying "Trust us" will not cut it, and (unfortunately), neither will trying to say "None of your business".
Here's a look at this idea from John Carroll at FierceBiotech. So, Pfizer, Novartis, Merck, all the rest of you? What's the response?
+ TrackBacks (0) | Category: Clinical Trials | Why Everyone Loves Us
August 9, 2012
The British Medical Journal says that the "widely touted innovation crisis in pharmaceuticals is a myth". The British Medical Journal is wrong.
There, that's about as direct as I can make it. But allow me to go into more detail, because that's not the the only thing they're wrong about. This is a new article entitled "Pharmaceutical research and development: what do we get for all that money?", and it's by Joel Lexchin (York University) and Donald Light of UMDNJ. And that last name should be enough to tell you where this is all coming from, because Prof. Light is the man who's publicly attached his name to an estimate that developing a new drug costs about $43 million dollars.
I'm generally careful, when I bring up that figure around people who actually develop drugs, not to do so when they're in the middle of drinking coffee or working with anything fragile, because it always provokes startled expressions and sudden laughter. These posts go into some detail about how ludicrous that number is, but for now, I'll just note that it's hard to see how anyone who seriously advances that estimate can be taken seriously. But here we are again.
Light and Lexchin's article makes much of Bernard Munos' work (which we talked about here), which shows a relatively constant rate of new drug discovery. They should go back and look at his graph, because they might notice that the slope of the line in recent years has not kept up with the historical rate. And they completely leave out one of the other key points that Munos makes: that even if the rate of discovery were to have remained linear, the costs associated with it sure as hell haven't. No, it's all a conspiracy:
"Meanwhile, telling "innovation crisis" stories to politicians and the press serves as a ploy, a strategy to attract a range of government protections from free market, generic competition."
Ah, that must be why the industry has laid off thousands and thousands of people over the last few years: it's all a ploy to gain sympathy. We tell everyone else how hard it is to discover drugs, but when we're sure that there are no reporters or politicians around, we high-five each other at how successful our deception has been. Because that's our secret, according to Light and Lexchin. It's apparently not any harder to find something new and worthwhile, but we'd rather just sit on our rears and crank out "me-too" medications for the big bucks:
"This is the real innovation crisis: pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures. Although a steady stream of significantly superior drugs enlarges the medicine chest from which millions benefit, medicines have also produced an epidemic of serious adverse reactions that have added to national healthcare costs".
So let me get this straight: according to these folks, we mostly just make "minor variations", but the few really new drugs that come out aren't so great either, because of their "epidemic" of serious side effects. Let me advance an alternate set of explanations, one that I call, for lack of a better word, "reality". For one thing, "me-too" drugs are not identical, and their benefits are often overlooked by people who do not understand medicine. There are overcrowded therapeutic areas, but they're not common. The reason that some new drugs make only small advances on existing therapies is not because we like it that way, and it's especially not because we planned it that way. This happens because we try to make big advances, and we fail. Then we take what we can get.
No therapeutic area illustrates this better than oncology. Every new target in that field has come in with high hopes that this time we'll have something that really does the job. Angiogenesis inhibitors. Kinase inhibitors. Cell cycle disruptors. Microtubules, proteosomes, apoptosis, DNA repair, metabolic disruption of the Warburg effect. It goes on and on and on, and you know what? None of them work as well as we want them to. We take them into the clinic, give them to terrified people who have little hope left, and we watch as we provide with them, what? A few months of extra life? Was that what we were shooting for all along, do we grin and shake each others' hands when the results come in? "Another incremental advance! Rock and roll!"
Of course not. We're disappointed, and we're pissed off. But we don't know enough about cancer (yet) to do better, and cancer turns out to be a very hard condition to treat. It should also be noted that the financial incentives are there to discover something that really does pull people back from the edge of the grave, so you'd think that we money-grubbing, public-deceiving, expense-padding mercenaries might be attracted by that prospect. Apparently not.
The same goes for Alzheimer's disease. Just how much money has the industry spent over the last quarter of a century on Alzheimer's? I worked on it twenty years ago, and God knows that never came to anything. Look at the steady march, march, march of failure in the clinic - and keep in mind that these failures tend to come late in the game, during Phase III, and if you suggest to anyone in the business that you can run an Alzheimer's Phase III program and bring the whole thing in for $43 million dollars, you'll be invited to stop wasting everyone's time. Bapineuzumab's trials have surely cost several times that, and Pfizer/J&J are still pressing on. And before that you had Elan working on active immunization, which is still going on, and you have Lilly's other antibody, which is still going on, and Genentech's (which is still going on). No one has high hopes for any of these, but we're still burning piles of money to try to find something. And what about the secretase inhibitors? How much time and effort has gone into beta- and gamma-secretase? What did the folks at Lilly think when they took their inhibitor way into Phase III only to find out that it made Alzheimer's slightly worse instead of helping anyone? Didn't they realize that Professors Light and Lexchin were on to them? That they'd seen through the veil and figured out the real strategy of making tiny improvements on the existing drugs that attack the causes of Alzheimer's? What existing drugs to target the causes of Alzheimer are they talking about?
Honestly, I have trouble writing about this sort of thing, because I get too furious to be coherent. I've been doing this sort of work since 1989, and I have spent the great majority of my time working on diseases for which no good therapies existed. The rest of the time has been spent on new mechanisms, new classes of drugs that should (or should have) worked differently than the existing therapies. I cannot recall a time when I have worked on a real "me-too" drug of the sort of that Light and Lexchin seem to think the industry spends all its time on.
That's because of yet another factor they have not considered: simultaneous development. Take a look at that paragraph above, where I mentioned all those Alzheimer's therapies. Let's be wildly, crazily optimistic and pretend that bapineuzumab manages to eke out some sort of efficacy against Alzheimer's (which, by the way, would put it right into that "no real medical advance" category that Light and Lexchin make so much of). And let's throw caution out the third-floor window and pretend that Lilly's solanezumab actually does something, too. Not much - there's a limit to how optimistic a person can be without pharmacological assistance - but something, some actual efficacy. Now here's what you have to remember: according to people like the authors of this article, whichever of these antibodies that makes it though second is a "me-too" drug that offers only an incremental advance, if anything. Even though all this Alzheimer's work was started on a risk basis, in several different companies, with different antibodies developed in different ways, with no clue as to who (if anyone) might come out on top.
All right, now we get to another topic that articles like this latest one are simply not complete without. That's right, say it together: "Drug companies spend a lot more on marketing than they do on research!" Let's ignore, for the sake of argument, the large number of smaller companies that spend all of their money on R&D and none on marketing, because they have nothing to market yet. Let's even ignore the fact that over the years, the percentage of money being spent on drug R&D has actually been going up. No, let's instead go over this in a way that even professors at UMDNJ and York can understand it:
Company X spends, let's say, $10 a year on research. (We're lopping off a lot of zeros to make this easier). It has no revenues from selling drugs yet, and is burning through its cash while it tries to get its first on onto the market. It succeeds, and the new drug will bring in $100 dollars a year for the first two or three years, before the competition catches up with some of the incremental me-toos that everyone will switch to for mysterious reasons that apparently have nothing to do with anything working better. But I digress; let's get back to the key point. That $100 a year figure assumes that the company spends $30 a year on marketing (advertising, promotion, patient awareness, brand-building, all that stuff). If the company does not spend all that time and effort, the new drug will only bring in $60 a year, but that's pure profit. (We're going to ignore all the other costs, assuming that they're the same between the two cases).
So the company can bring in $60 dollars a year by doing no promotion, or it can bring in $70 a year after accounting for the expenses of marketing. The company will, of course, choose the latter. "But," you're saying, "what if all that marketing expense doesn't raise sales from $60 up to $100 a year?" Ah, then you are doing it wrong. The whole point, the raison d'etre of the marketing department is to bring in more money than they are spending. Marketing deals with the profitable side of the business; their job is to maximize those profits. If they spend more than those extra profits, well, it's time to fire them, isn't it?
R&D, on the other hand, is not the profitable side of the business. Far from it. We are black holes of finance: huge sums of money spiral in beyond our event horizons, emitting piteous cries and futile streams of braking radiation, and are never seen again. The point is, these are totally different parts of the company, doing totally different things. Complaining that the marketing budget is bigger than the R&D budget is like complaining that a car's passenger compartment is bigger than its gas tank, or that a ship's sail is bigger than its rudder.
OK, I've spend about enough time on this for one morning; I feel like I need a shower. Let's get on to the part where Light and Lexchin recommend what we should all be doing instead:
What can be done to change the business model of the pharmaceutical industry to focus on more cost effective, safer medicines? The first step should be to stop approving so many new drugs of little therapeutic value. . .We should also fully fund the EMA and other regulatory agencies with public funds, rather than relying on industry generated user fees, to end industry’s capture of its regulator. Finally, we should consider new ways of rewarding innovation directly, such as through the large cash prizes envisioned in US Senate Bill 1137, rather than through the high prices generated by patent protection. The bill proposes the collection of several billion dollars a year from all federal and non-federal health reimbursement and insurance programmes, and a committee would award prizes in proportion to how well new drugs fulfilled unmet clinical needs and constituted real therapeutic gains. Without patents new drugs are immediately open to generic competition, lowering prices, while at the same time innovators are rewarded quickly to innovate again. This approach would save countries billions in healthcare costs and produce real gains in people’s health.
One problem I have with this is that the health insurance industry would probably object to having "several billion dollars a year" collected from it. And that "several" would not mean "two or three", for sure. But even if we extract that cash somehow - an extraction that would surely raise health insurance costs as it got passed along - we now find ourselves depending on a committee that will determine the worth of each new drug. Will these people determine that when the drug is approved, or will they need to wait a few years to see how it does in the real world? If the drug under- or overperforms, does the reward get adjusted accordingly? How, exactly, do we decide how much a diabetes drug is worth compared to one for multiple sclerosis, or TB? What about a drug that doesn't help many people, but helps them tremendously, versus a drug that's taken by a lot of people, but has only milder improvements for them? What if a drug is worth a lot more to people in one demographic versus another? And what happens as various advocacy groups lobby to get their diseases moved further up the list of important ones that deserve higher prizes and more incentives?
These will have to be some very, very wise and prudent people on this committee. You certainly wouldn't want anyone who's ever been involved with the drug industry on there, no indeed. And you wouldn't want any politicians - why, they might use that influential position to do who knows what. No, you'd want honest, intelligent, reliable people, who know a tremendous amount about medical care and pharmaceuticals, but have no financial or personal interests involved. I'm sure there are plenty of them out there, somewhere. And when we find them, why stop with drugs? Why not set up committees to determine the true worth of the other vital things that people in this country need each day - food, transportation, consumer goods? Surely this model can be extended; it all sounds so rational. I doubt if anything like it has ever been tried before, and it's certainly a lot better than the grubby business of deciding prices and values based on what people will pay for things (what do they know, anyway, compared to a panel of dispassionate experts?)
Enough. I should mention that when Prof. Light's earlier figure for drug expense came out that I had a brief correspondence with him, and I invited him to come to this site and try out his reasoning on people who develop drugs for a living. Communication seemed to dry up after that, I have to report. But that offer is still open. Reading his publications makes me think that he (and his co-authors) have never actually spoken with anyone who does this work or has any actual experience with it. Come on down, I say! We're real people, just like you. OK, we're more evil, fine. But otherwise. . .
+ TrackBacks (0) | Category: "Me Too" Drugs | Business and Markets | Cancer | Drug Development | Drug Industry History | Drug Prices | The Central Nervous System | Why Everyone Loves Us
June 22, 2012
OK, it's time to haul the marketing guys back in again. Via Pharmalot, I see that Merck, in its capacity now as Merck Schering-Plough, is promoting Claritin via a tie-in with the kid's movie "Madagascar 3". That is certainly the first time I've ever heard of a drug company co-promoting with a children's movie (or, actually, any movie at all, although I've probably missed an example or two).
And if these reports are true, the promotion is rather extensive, in an eye-rolling cringe-inducing way:
". . .customized Madagascar 3 packaging for both types of Claritin; a “Free Movie Ticket Offer” promotion with a Claritin purchase at Walgreens; the Claritin Facebook page offers a free, downloadable Madagascar Inspired Circus Activity Guide and a Madagascar themed “Circus Stackers” game; eight activity guides for free download from Facebook, and product packaging that included “5 Free Stickers” of Madagascar characters.
Merck also initiated “Children’s Claritin Mom Crew” members to hold Madagascar-themed viewing parties. Mom Crew members are bloggers who have been selected by Merck to be product endorsers, the letter states. [The Public Health Advocacy Institute at Northeastern], in fact, says it ran a Google search using the terms “Claritin mom crew Madagascar.” Of the first 40 search results, 31 were unique accounts of Children’s Claritin Madagascar viewing parties held by Claritin Mom Crew members from across the country.
Well, I just did that same search, and believe me, it's no longer the case. The Pharmalot post is now the first search result, and most of the others are unfavorable publicity in the same vein. But there certainly are accounts from the (excuse me while I hold my nose) "Claritin Mom Crew" in the results, although I'm having a lot of trouble believing that these are real blog posts that emerged from spontaneous human action. This really smells like a planned campaign, with close attention paid to phrasing, linking, and other search engine optimization techniques. For one thing, I note that every mention of this thing is carefully capitalized, and there's even a standard Twitter hashtag.
But maybe my ideas of "spontaneous human action" need to be a bit broader. There's been a long-standing technique of spreading endorsements via compensated blog posts (money, coupons, discounts, affiliate percentages), and there are surely many here's-what-I-do-with-my-kids sites that exist partly (or wholly) to reap the benefits from all these promotions. I note that at least one of these blogs is now feeling the backlash from all the negative publicity in this case, and they're probably not alone. (Roll with it, I say - after all, think of all the extra traffic you're getting!)
But this whole promotion is a rotten idea, although I suppose that you'd have to be a marketing whiz for that not to at least cross your mind. How anyone could have planned it and launched it without realizing that this backfire reaction was exactly what would surely happen is beyond me. And sure, maybe they're going to sell some more children's Claritin, briefly. But how much more, compared to all the negative PR? Compared to headline after headline that makes Merck look like the sort of organization that has no problem using cartoon character tie-ins to sell histamine receptor antagonists to kids?
Hey, why not? After all, Merck - or at least their marketing department - clearly is the sort of organization that has no problem with that at all. Own it guys - stand up and be proud. I'm sure you can manage it.
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June 28, 2011
Over at Forbes, Matthew Herper has a provocative comment from a former Merck executive, Peter DeVillbiss. He's wondering when and how drug companies lost the public standing that they used to have (remember, Merck used to be the "most admired company in America", just to give you one example). His theory (which I know is shared by some of the readership here) is that direct-to-consumer advertising was a terrible mistake, bringing in lots of profits while ruining the reputation of the drug companies. His thought experiment:
If there was a regulatory mandate for all pharma companies to cease direct-to-consumer advertising for prescription drugs and vaccines, what would happen? It is not clear to me that this would be a death knell for the industry. I think it’s reasonable to assume that revenues would fall, but the big question is whether costs would fall more? This could never happen on a voluntary basis because of game theory but if it were mandated and applied across the board, I’m not so sure that pharma wouldn’t be better off in a few ways.
Check out the post, and the comments that it's inspired. I'll get a few points out of the way - for one thing, DTC advertising has, in fact, probably enriched the drug industry a great deal. No one's claiming that it's been a money sink, just a reputational disaster. Another thing to remember is that advertising budgets are supposed to bring in more money to the company than you'd have if you didn't run ads - that is, they're supposed to pay for themselves and plenty more besides. So if we can skip the "Pharma spends more on ads than R&D!" part of the argument, that'll be fine. Ads make money; I'd rather focus on what else they do. Thoughts?
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June 22, 2011
The NIH has, it appears, been getting quite sensitive about conflicts of interest. There have been some rather ugly scenes involving ghostwritten articles (and entire books), and NIH director Francis Collins has said that the agency's guidelines are in the process of being revised.
You'd have thought that the existing ones would have banned that sort of thing, anyway. And in fact, it seems as if many scientists at the NIH already find the rules too restrictive. From the original paper that looked into this:
Eighty percent of respondents believed the NIH ethics rules were too restrictive. Whereas 45% of respondents believed the rules positively impacted the public's trust in the NIH, 77% believed the rules hindered the NIH's ability to complete its mission.
The problem, as so often happens, is whether your goal is to look good or to do your job, and you don't want to solve that conflict by redefining your job as just to look good all the time.
The reason I'm talking about all this is that I've heard of instances where people from NIH have refused (or felt as if they have had to refuse) invitations to give talks in industrial settings, because they feared conflict-of-interest problems. This seems perverse, especially for an agency that's talking about getting heavily into translational drug research. That'll have to lead to numerous contacts with industry, I think, in order to be much good at all. So how will the NIH manage that if the drug industry is seen as contaminating their Purity of Essence?
+ TrackBacks (0) | Category: Academia (vs. Industry) | Why Everyone Loves Us
June 7, 2011
I found this article in The American Scholar via Arts and Letters Daily, entitled "Flacking for Big Pharma". As you might have possibly guessed from the title, it's a broadside against the advertising practices of the drug industry, and particularly against its interactions with physicians and the medical journals.
And I'll say up front that the piece is not, in fact, completely wrong. It's probably not even mostly wrong. There really are big problems in these areas, such as too-aggressive promotion, minimization of side effects, too many payments to "key opinion leaders", too many studies that don't see the light of day, and so on. And these things really do lower the respect that people have for the drug industry - assuming, by this point, that there's much respect left. But overall, this article is sort of a summary version of Marcia Angell's book, for people who would like to hate the drug industry but find themselves pressed for time. And as such, it manages to get some important things wrong in the process of getting some things right.
For example, it makes much of subgroup analysis of clinical trials, but as a way for drug companies to pull the wool over readers' eyes. I wonder how much this really happens, though, since overzealous data mining of a trial that wasn't powered to generate such conclusion is (you'd think) a well-known pitfall by now. Perhaps not, though. But the example given in the article is BiDil:
BiDil proponents published studies that supported their claim of a racially mediated genetic anomaly that was addressed by BiDil, making it an ideal drug for blacks but not for whites.. . .
NitroMed won FDA approval of a new trial that included only 1,050 black subjects, with no white subjects to provide comparison data. Furthermore, BiDil was not tested alone, but only in concert with heart medications that are already known to work, such as diuretics, beta-blockers, and angiotensin-converting enzyme (or ACE) inhibitors. The published results of the trial were heralded as a success when subjects taking the drug combinations that included BiDil enjoyed 43 percent fewer heart-failure deaths.
. . .excluding whites was a medically illogical but financially strategic move because it eliminated the possibility that the drug would test well in whites, thereby robbing NitroMed of its already thin rationale for calling BiDil a black drug. The “black” label was crucial, because BiDil’s patent covering use in all ethnic groups expired in 2007, but the patent for blacks only allows NitroMed to profit from it until 2020. BiDil is a case study in research methodology “flaws” that mask strategies calculated to make a dodgy drug look good on paper, for profit.
But this doesn't appear to be correct. First off, as the article itself mentioned earlier, the BiDil combination was originally tested (twice) in racially mixed (in fact, I believe, mostly white) trial groups. Secondly, the 1,050-patient trial in black patients was done with other therapies because to do otherwise would be unethical (see below). And what you wouldn't realize by reading all this is the BiDil, in fact, was a failure. No one's making piles of profits on BiDil until 2020, especially not NitroMed. You wouldn't even know that NitroMed itself gave up trying to sell BiDil three years ago, and that the company itself was acquired (for a whopping 80 cents a share) in 2009.
Now, about those placebo-controlled trials. This article makes much of a British Medical Journal satire from 2003 on how to make a drug look good. But it's confused:
A placebo, such as a sham or “sugar” pill, has no active ingredient, and, although placebos may evoke some poorly understood medical benefits, called the “placebo effect,” they are weak: medications tend to outperform placebos. Placebo studies are not ethical when a treatment already exists for a disorder, because it means that some in the study go untreated. However, if you care only that your new drug shines in print, testing against placebo is the way to go.
Well, which is it? We can't, in fact, run placebo-controlled trials just to "shine in print" when there's a standard of care, you know. You can only do that when there's no standard of care at all. And in those cases, what exactly should we use as a comparison? Using nothing at all (no pills, nothing) would, in fact, make our drugs look even better than they are, because of that placebo effect. This is a specious objection.
And when there's a standard of care that a new drug will be added to (as was the case with BiDil), then you actually do have to run it with those therapies in place, at least when you get to Phase III. The FDA (and the medical community) want to know how your drug is going to perform in the real world, and if patients out in that real world are taking other medications, well, you can't pretend that they aren't.
In another section, the article makes much of the Merck/Elsevier affair, where Elsevier's "Excerpta Medica" division set up some not-really-journals in Australia (blogged about here). That was, in fact, disgraceful (as I said at the time), but disgraceful apparently isn't enough:
. . .Elsevier, the Dutch publisher of both The Lancet and Gray’s Anatomy, sullied its pristine reputation by publishing an entire sham medical journal devoted solely to promoting Merck products. Elsevier publishes 2,000 scientific journals and 20,000 book-length works, but its Australasian Journal of Bone and Joint Medicine, which looks just like a medical journal, and was described as such, was not a peer-reviewed medical journal but rather a collection of reprinted articles that Merck paid Elsevier to publish. At least some of the articles were ghostwritten, and all lavished unalloyed praise on Merck drugs, such as its troubled painkiller Vioxx. There was no disclosure of Merck’s sponsorship. Librarian and analyst Jonathan Rochkind found five similar mock journals, also paid for by Merck and touted as genuine. The ersatz journals are still being printed and circulated, according to Rochkind, and 50 more Elsevier journals appear to be Big Pharma advertisements passed off as medical publications. Rochkind’s forensic librarianship has exposed the all-but-inaccessible queen of medical publishing as a high-priced call girl.
Fifty journals? Really? As far as I can tell, that figure comes from this analysis at the time, and seems to be mostly nonce publications, one-off conference proceedings, and the like. There is a whole list of "Australasian Journal of So-and-Sos", which would be the same reprint advertorials as the other Excerpta Medica stuff, but do these still exist? (Did all of them on the list, in fact, ever actually publish anything?)
You'd get the impression that Elsevier is (or was, until Big Pharma came along) an absolute shining pinnacle of the medical establishment - but, with apologies to the people I know who work there, that is unfortunately not the case. They're big, and they're very far from the worst scientific publishers out there, but some of their titles are, in fact, not adding much to the total of human knowledge. Nor has the conduct of their marketing department always been above reproach. But no, this has to be built up to look even worse than it is.
The irritating thing is that there's plenty to criticize about this industry without misrepresenting reality. But does that sell?
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May 27, 2011
When we last spoke about the Avastin-and-breast-cancer story here, the FDA had rescinded its provisional approval for that indication, and a number of people were shouting that here it was, health care rationing based on price, right in front of us. As I said at the time, I think that those worries were misplaced: the reason Avastin was approved for metastatic breast cancer was that it seemed to work (a little). But when the numbers were firmed up with more studies, it turned out that it didn't. The whole point of a provisional approval is that it can be rolled back if things don't work out they way that they looked at first.
Now Genentech is coming back to the FDA next month asking for approval again. Here's an op-ed in the New York Times that I think does a good job of laying out the case against the whole idea:
Genentech presented progression-free survival as a surrogate for better quality of life, but the quality-of-life data were incomplete, sketchy and, in some cases, non-existent. The best that one Genentech spokesman could say was that “health-related quality of life was not worsened when Avastin was added.” Patients didn’t live longer, and they didn’t live better.
It was this lack of demonstrated clinical benefit, combined with the potentially severe side effects of the drug, that led the F.D.A. last year to reject the use of Avastin with Taxol or with the other chemotherapies for breast cancer.
In its appeal Genentech is changing its interpretation of its own data to pursue the case. Last year Genentech argued that the decrease in progression-free survival in its supplementary studies was not due to the pairing of Avastin with drugs other than Taxol. This year, however, in its brief supporting the appeal, Genentech argues that the degree of benefit may indeed vary with “the particular chemotherapy used with Avastin.” In other words, different chemotherapies suddenly do yield different results, with Taxol being superior. The same data now generate the opposite conclusion.
Another problem, as the piece says, is that the whole cancer drug approval process has a tendency to slip into ancedotal form: tearful patients testify that the drug saved their lives. But the plural of anecdote is still not data, and never will be. In oncology, there's really not much way of being sure about any individual patient's response. There are so many different types of cancer, and they occur in so many different kinds of people. The only way to say anything useful is in a well-designed clinical trial setting.
Now, that doesn't mean that you just have to round up thousands of people with all kinds of cancer and let things rip. It's perfectly acceptable - in fact, very useful - to screen the patients that go into the trials so that you're sure that they, as far as can be told, all have the same sort of disease. But you have to do that up front to really trust the conclusions. Data-mining, running things in reverse, is tricky, and if you're going to do it, it should be used to tell you how to run your next trial, not to argue for approval. Only when you've run these kinds of experiments can you say with any certainly that a cancer therapy is useful.
But that's a hard sell, compared to someone who is convinced that they're alive because of cancer drug X (or is convinced that a loved one would be alive, if they'd only been able to get it). If you're trying to persuade a crowd (or a mob), that would be the way to go: Aristotle's appeal to pathos. But keep in mind that Aristotle (and the rest of the Greeks) looked down on that technique, and they were right. Logos, used properly, is what we're after here, mixed in with the ethos of a disinterested observer who's trying to find the truth.
And this gets to the moral dilemma at the heart of the modern drug industry: are we trying to find drugs that work? Or are we trying to sell drugs, whether they work or not? Roche/Genentech has every right to make its case and to petition the FDA for whatever decision they want. But they (and every other drug company out there) owe the rest of us, and the rest of the world, something while they're doing it: to present all the solid data they have, and to let the numbers speak for themselves. But if the numbers can't persuade, then a company should go back and get some more before trying again.
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May 24, 2011
Via Matt Herper, here (PDF) is an interesting survey from Quintiles, the large clinical outsourcing company, on how different groups perceive the value of new drugs.
The first problem is that not everyone can agree on what's valuable. Surveying managed-care people and physicians, the number one factor mentioned is cost. Biopharma respondents mentioned cost, but were more weighted toward outcomes (which, for example, was a factor in only 10% of the physician responses). Patients. . .well, patients mentioned cost, but not as much as the doctors or insurance people, and they hardly noted outcomes at all (single digits). "Not sure" was a front-runner.
When things were asked in a less free-form way, though, with a list of answers to choose from, patient outcomes and safety were always the top two factors among all four groups - followed by quality of life, followed by cost. An interesting discrepancy, I have to say. When asked if they agree with the statement that "All in all, the money patients spend on prescription medication is worth it", 84% of the biopharma people agree, as do 80% of the patients. Doctors were 70/30, but managed care people were 56/44. (These are all mixtures of "somewhat agree" and "strong agree", by the way).
And when asked to rank various groups according to how much value they add to health care, doctors and medical staff come out number one, no matter who's asked. "Scientists and medical researchers" come in second - except in the case of the physicians, it's a very distant second indeed. (They rank themselves so highly that there's very little left over for anyone else: 81% versus a bunch of single digits). But, interestingly, "Biopharmaceutical companies" get ranked at 11% by people in biopharma, 5% by patients, and at 1% by physicians and managed care.
So where do all these scientists and medical researchers, who are ranked much higher, actually work? Why, at pure, untainted institutes, one guesses - in spotless white coats, their minds on higher things, somewhere far away from the business of actually making and selling drugs. . .
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May 5, 2011
I wrote a couple of years ago about corporate anthems, and my own horrifying experience with one. One of the comments mentioned Pfizer's "Excel and Exceed", which was said to have been pulled from YouTube, "possibly out of sheer embarrassment".
Well, it's back, courtesy of a disgruntled Pfizer employee. Some of you may well have already seen this one, but if you haven't, here's the work of someone with bad feelings about the company, time on their hands, and (most importantly) a copy of the uplifting theme song. I particularly like the Exubera inhaler jokes (bird feeder, etc.) But as for the music, well, you've been warned.
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March 24, 2011
I wanted to do some follow-up on the Makena story - the longtime progesterone ester drug that has now been newly FDA-approved and newly made two order of magnitude more expensive. (That earlier post has the details, for those who might not have been following).
Steve Usdin at BioCentury has, in the newsletter's March 21st issue, gone into some more detail about the whole process where KV Pharmaceuticals stepped in under the Orphan Drug Act to pick up exclusive marketing rights to the drug. The company, he says, "arguably has played a marginal role" in getting the drug back onto the market.
Here's the timeline, from that article and some digging around of my own: in 1956, Squibb got FDA approval for the exact compound (progesterone caproate) for the exact indication (preventing preterm labor), under the brand name Delalutin. But at that time, the FDA didn't require proof of efficacy, just safety. There were several small, inconclusive academic studies during the 1960s. In 1971, the FDA noted that the drug was effective for abnormal uterine bleeding and other indications, and was "probably effective" for preventing preterm delivery. In 1973, though, based on further data from the company, the agency went back on that statement, and said that there was now evidence of birth defects from the use of Delalutin in pregnant women, and removed any of these as approved uses. In the late 1970s, warning language was further added. In 1989, the agency said that its earlier concerns (heart and limb defects) were unfounded, but warned of others. By 1999, the FDA had concluded that progesterone drugs were too varied in their effects to be covered under a single set of warnings, and took the warning labels off.
In 1998, the National Institute of Child Health and Human Development launched a larger, controlled study, but this was an example of bad coordination all the way. By this time, Bristol-Myers Squibb had requested that Delalutin's NDAs be revoked, saying that they hadn't even sold the compound for several years. This seems to have also been a move, though, in response to FDA complaints about earlier violations of manufacturing guidelines and a request to recall the outstanding stocks of the drug. So the NICHD study was terminated after a year, with no results, and the drug's NDA was revoked as of September, 2000.
The NICHD had started another study by then, however, although I'm not sure how they solved their supply problems. This is the one that reported data in 2003, and showed a real statistical benefit for preterm labor. More physicians began to prescribe the drug, and in 2008, the American College of Obstetricians and Gynecologists recommended its use.
So much for the medical efficacy side of the story. Now we get back to the regulatory and marketing end of things. In March of 2006, a company called CUSTOpharm asked the FDA to determine if the drug had been withdrawn for reasons of safety or efficacy - basically, was it something that could be resubmitted as an ANDA? The agency determined that the compound was so eligible.
Meanwhile, another company called Adeza Biomedical was moving in the same direction (as far as I can tell, they and CUSTOpharm had nothing to do with each other, but I don't have all the details). Adeza submitted an NDA in July 2006, under the FDA's provision for using data that that applicant had not generated - in fact, they used the NICHD study results. They called the compound Gestiva, and asked for accelerated approval, since preterm delivery was accepted as a surrogate for infant mortality. An advisory committee recommended this in August of 2006, by a 12 to 9 vote. (Scroll down to the bottom of this page for the details).
The agency sent Adeza an "approvable" letter in October 2006 which asked for more animal studies. The next year, Adeza was bought by Cytec, who were bought by Hologic, who sold the Gestiva rights to KV Pharmaceuticals in January 2008. So that's how KV enters the story: they bought the drug program from someone who bought it from someone who just used a government agency's clinical data.
The NDA was approved by the FDA in February 2011, along with a name change to Makena. By this time, KV and Hologic had modified their agreement - KV had already paid up nearly $80 million, with another $12.5 million due with the approval, and has further payments to make to Hologic which would take the total purchase price up to nearly $200 million. That's been their main expense for the drug, by far. The FDA has asked them to continue two ongoing studies of Makena - one placebo-controlled trial to look at neonatal mortality and morbidity, and one observational study to see if there are any later developmental effects. Those studies will report in late 2016, and KV has said that their costs will be in the "tens of millions". So they paid more for the rights to Makena than it's costing them to get it studied in the clinic.
That only makes sense if they can charge a lot more than the generic price for the drug had been, of course, and that's what takes us up to today, with the uproar over the company's proposed price tag of $1500 per treatment. But the St. Louis Post-Dispatch (thanks to FiercePharma for the link) says that the company has now filed its latest 10-Q with the SEC, and is notifying investors that its pricing plans are in doubt:
The success of the Company’s commercialization of Makena™ is dependent upon a number of factors, including: (i) the Company’s ability to maintain certain net pricing levels for Makena™; (ii) successfully obtaining agreements for coverage and reimbursement rates on behalf of patients and medical practitioners prescribing Makena™ with third-party payors, including government authorities, private health insurers and other organizations, such as HMOs, insurance companies, and Medicaid programs and administrators, and (iii) the extent to which pharmaceutical compounders continue to produce non-FDA approved purported substitute product. The Company has been criticized regarding the list pricing of Makena™ in a number of news articles and internet postings. In addition, the Company has received, and expects to continue to receive, letters criticizing the Company’s list pricing of Makena™ from several medical practitioners and several advocacy groups, including the March of Dimes, American College of Obstetricians and Gynecologists, American Academy of Pediatrics and the Society for Maternal Fetal Medicine. Further, the Company has received one letter from a United States Senator and expect to receive another letter from a number of members of the United States Congress asking the Company to reduce its indicated pricing of Makena™, and the same Senator, together with a second Senator, has sent a letter to the Federal Trade Commission asking the agency to initiate an investigation of our pricing of Makena™.
The Company is responding to these criticisms and events in a number of respects. . .The success of the Company is largely dependent upon these efforts and appropriately responding to both the media and governmental concerns regarding the pricing of Makena™.
Personally, I'm torn a bit by the whole situation. I think that people and companies have the right to charge what the market will bear for their goods and services. But at the same time, I find myself also very irritated by KV in this case, because I truly think that they are taking advantage of the regulatory framework. As I said in the last post, it's not like they took on much risk here - they didn't discover this drug, didn't do the key clinical work on it, and don't even manufacture it themselves. Their business plan involves sitting back and collecting the rent, but that's what the law allows them to do.
In the end, if political pressure forces them to back down on their pricing, this will come down to a poor business decision. Companies should, in fact, charge what the market will bear - but KV may have neglected some other factors when they calculated what that price should be. Before setting a price, you should ask "Will the insurance companies pay?" and "Will Medicare pay?" and "Will people pay out of their own pocket?", but you should also ask "Will this price bring down so much controversy that we won't be able to make it stick?"
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March 11, 2011
The situation with KV Pharmaceuticals and the premature birth therapy Makena has been all over the news in the last couple of days. Briefly, Makena is an injectable progesterone formulation, given to women at risk of delivering prematurely. It went off the market in the early 1990s, because of side effect concerns and worries about overall efficacy, but since 2003 it's made an off-label comeback, thanks largely to a study at Wake Forest. This seemed to tip the risk/benefit ratio over to the favorable side.
Comes now the FDA and the provisions for orphan drugs. There is an official program offering market exclusivity to companies that are willing to take up such non-approved therapies and give them the full clinical and regulatory treatment. The idea, which is well-intentioned, as so many ideas are, was to bring these things in from the cold and give them more medical, scientific, and legal standing as things that had been through the whole review process. And that's what KV did. But this system says nothing about what the price of the drug will be during the years of exclusivity, in the same way that the approval process for new drugs says nothing about what their price will be when they come to market.
KV has decided that the price will now be about $1500 per patient, as opposed to about $15 before under the off-label regime. The reaction has been exactly what one would expect, and why not? Here, then are some thoughts:
Unfortunately, this should not have come as a surprise. It seems to have, though. The news stories are full of quotes from patients, doctors, and insurance companies saying that they never saw this coming. Look, though, at what happened recently with colchicine. Same situation. Same price jump. Same outrage, understandably. As long as these same incentives exist, any no-name generic company that comes along to adopt an old therapy and bring it into the modern regulatory regime can be assumed to be planning to run the price up to what they think the market will bear. That's why they're going to the trouble.
KV seems to have guessed correctly about the price. You wouldn't think so, with a hundred-fold increase. And the news stories, as I say, are full of (understandably) angry quotes from people at the insurance companies who will now be asked to pay. But (as that NPR link in the first paragraph says), Aetna, outraged or not, is going to pony up. It's going to cost them $20 to $30 million per year, most of which is going to go directly to KV's bottom line, but they're going to pay. And the other big health insurance providers seem to be doing the same. Meanwhile, the company has announced a program to provide low-cost treatment to people without insurance. From what I can see, it looks like basically everyone who had access to the drug before will have it now, the main difference being that the payers with deeper pockets will now be getting hammered on by KV. This is not a nice way to run a business, and it's not something I would sleep well on after having done myself. But there it is.
How much is regulatory approval worth, anyway? That seems to be what we're really arguing about. After all, patients are getting the same drug, in the same formulation, dosed the same way as before. But now it's **FDA Approved**. For new substances, I think regulatory approval is worth quite a bit. There are all kinds of things that can go wrong. But how about drugs that have been dosed in humans for years? And already run through the equivalent of Phase II trials by other people? The main thing that's being added is some confirmation that yes, the dose that everyone's been using is about right, and yes, the effects that are being seen are, in fact, real. And that's not worthless, not at all - but how much is it worth, really? The agency itself seems to place a pretty high value on it - seven years of market exclusivity, to be exact, and we can see by example just what that goes for on the market.
This does the drug industry no good, either. We have a bad enough reputation as it is, wouldn't you think? What's irritating, to someone like me who works at a "find a new drug" type of company, is that these no-name generic outfits (KV in this case, URL Pharma for colchicine) are doing pretty much what critics of the industry think that we all do, all the time. That is, walk up to situations where other people have done a lot of the work, a good amount of it with public/NIH money, and step right in and profit. Now it's true that these companies have to basically run Phase II/Phase III trials to take the data to the FDA, and that's a significant amount of money. But their risks in doing so have been watered down immensely by the history of these drugs in the medical community. When a research company closes its eyes, holds its breath, and jumps into the clinic with a new molecule, that's one thing. And that's where those 90% failure rates come from. But the failure rate of drugs that have been used for years in human patients already, and already studied under clinical conditions, is not anything like 90%. Is it zero per cent? Has anyone failed yet, taking one of these old medications back to the FDA? Even once?
The company picked its target carefully. I will say this, that KV's trials have presumably clarified the question of whether progesterone therapy actually does help. You'd think that the 2003 study would have answered that, and as it turned out, it had. A review of the field in 2006 concluded that it was a worthwhile therapy, from a cost/benefit standpoint, as did another review in 2007. (Mind you, that wasn't at any $1500 a throw, was it?) But a Cochrane review from last year concluded that there still wasn't enough evidence to recommend the whole idea. And progesterone therapy doesn't seem to help with twin or tripletpregnancies or with some other gestational problems. No, the 2003 study seemed fairly strong, and has the greatest relevance to public health, so that's what the company went for. From one viewing angle, the system worked.
My take, though, is that as long as the regulatory environment is set to value FDA's stamp of approval for old drugs this highly, that people will continue to take advantage of it. You subsidize something; you're going to get it. Personally, I don't think that the balance is right, but I'm open to suggestion about what to do about it. A shorter period of market exclusivity would just mean, I think, that the prices go up even higher once a drug gets re-approved. Just throwing up our hands and letting all that old stuff stand is a possibility, but there may well still be some of these things that aren't as effective as we think, or aren't being dosed right, and we have to decide what the cost is of letting those situations stand.
Update: see also Alex Tabarrok's thoughts on the effects of the Orphan Drug Act in general.
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March 10, 2011
Taking on questions from all comers about the drug industry, here I am over at Reddit's "Ask Me Anything" section. Have a look if you like - the questions vary greatly, is all I'll say. . .
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March 8, 2011
One of the readers in the comments section to the last post noticed Rebecca Warburton trying to clarify that absurd $43-million-per-drug R&D figure. You'll find her response in the comments section to the Slate piece that brought this whole study so much attention. Says Warburton:
. . .Our estimate of $59 million is the median development (the “D” in R&D) cost per average drug, not just NMEs (new chemicals) and does not include basic research costs, for which there is no reasonable estimate available.
But that explanation won't wash, as some of the readers over at Slate noticed as well. If you read the Light and Warburton article itself, you find the authors talking about nothing but "R&D" all the way through. In the one section where they do start to make a distinction, they brush aside expenses for basic research, on the grounds that drug companies hardly do any:
Companies under pressure from quarterly reports have difficulty justifying long searches for breakthrough drugs to investors. . .Little company R&D is devoted to basic research. Although industry association reports, based on unverified numbers from its members, claim that companies invest on average 17–19 per cent of sales in R&D, the most authoritative data come from the long-standing survey by the US National Science Foundation (2003). Its data document that pharmaceutical firms invest 12.4 per cent of gross domestic sales on R&D. Of this, 18 per cent, or 2.4 per cent of sales, went to basic research. More detailed reports from the industry indicate the percentage of R&D going to basic research is even smaller, about 9.3 per cent (or 1.2 per cent of sales) (Light, 2006). Thus the net corporate investment in research to discover important new drugs is about 1.2 per cent of sales, not 17–19 per cent.
So no, claiming that the $43 million figure is only supposed to represent the "D" part of R&D is disingenuous. There's another line from this paper, quoting Marcia Angell, that I think gets to one of the roots of the problem with the way these authors have characterized drug research. Angell is quoted here with approval - everything she and Merril Goozner have to say is quoted with approval:
It is also unclear how far back one should go to count up the costs of discovery, given that often there are several strands of research that are pieced together. In Angell’s view, the critical step in ‘discovering’ a new drug is understanding how the disease works and finding one or two good targets of vulnerability in the defences of a disease for intervention. Basic research ‘is almost always carried out at universities or government research labs, either in this country or abroad’ (Angell, 2004, p. 23).
And there you have it. The critical step is understanding how the disease works, you see, and finding one or two good targets. By that definition, the vast amount of money that gets spent in the drug industry is then non-critical. This is a viewpoint that can only be held by someone who has never tried to discover a drug, or never held a serious conversation with anyone who has.
Let's poke a few holes in that worldview. First off, if we waited to "understand" diseases before trying to develop drugs for them, we'd hardly have a damned thing on the drugstore shelves. Look at Alzheimer's - the medical community is still having fist-waving arguments about its cause, while drug companies continue to sink piles of money into trying to treat it. (Almost all of which has gone down the tubes, I might add, and I helped flush some of it through myself, earlier in my career).
Then you have to find one or two good targets. Peachy! Where do you find those thingies, anyway? And how do you know that they're good targets? I wish that Marcia Angell, Donald Light, or Rebecca Warburton would let the rest of us in on those secrets. As it is, we have to take chances on some pretty tenuous stuff, and often the only way to find out if a target really has any connection to human health is to. . .well, to discover a drug candidate that hits it. And develop it, and get it through tox, and into humans, and through Phase I, and into Phase II, and more likely than not these days, into Phase III before you really find out if, you know, it was actually a good target. We pass on those results to the rest of the world at that point. But that doesn't count as research, apparently.
And how about the drugs that have been developed without good mechanisms or targets at all? Metformin, ezetimibe, rosiglitazone and pioglitazone: none of these had any detailed mechanisms worked out for them while the money was being spent to develop them. These are the sorts of things we do around here in between having meetings to decide what color the package should be, and right after we do that thing where we all jump around in rooms knee-deep in hundred-dollar bills. Exhausting stuff, that money-wading.
But what I'd really like to ask Light and Warburton about is this: if you do think that the Tufts/diMasi estimate is crap, why did you feel as if the antidote was more crap from the opposite direction? Honestly, I'd think that intelligent people of good will might be more interested in decreasing the total amount of crap out there instead. . .
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March 7, 2011
Note: a follow-up post to this one can be found here.
I've had a deluge of emails asking me about this article from Slate on the costs of drug research. It's based on this recent publication from Donald Light and Rebecca Warburton in the London School of Economics journal Biosocieties, and it's well worth discussing.
But let's get a few things out of the way first. The paper is a case for the prosecution, not a dispassionate analysis. The authors have a great deal of contempt for the pharmaceutical industry, and are unwilling (or unable) to keep it from seeping into their prose. I'm tempted to reply in kind, but I'm supposed to be the scientist in this discussion. We'll see how well I manage.
Another thing to mention immediately is that this paper is, in fact, not at all worthless. In between the editorializing, they make some serious points, and most of these are about the 2003 Tufts (diMasi) estimate of drug development costs. This is the widely-cited $802 million figure, and the fact that it's widely cited is what seems to infuriate the authors of this paper the most.
Here are their problems with it: the Tufts study surveyed 24 large drug companies, of which 10 agreed to participate. (In other words, this is neither a random nor a comprehensive sample). The drugs used for the study numbers were supposed to be "self-originated", but since we don't know which drugs they were, it's impossible to check this. And since the companies reported their own numbers, these would be difficult to check, even if they were made available drug-by-drug (which they aren't). Nor can anyone be sure that variations in how companies assign costs to R&D haven't skewed the data as well. We may well be looking at the most expensive drugs of the whole sample; it's impossible to say.
All of these are legitimate objections - the Tufts numbers are just not transparent. Companies are not willing to completely spread their books out for outside observers, in any industry, so any of these estimates are going to be fuzzy. Light and Warburton go on to some accounting issues, specifically the cost-of-capital estimate that took their estimated cost for a new drug from 400 million to 800 million. That topic has been debated around this blog before, and it's important to break that argument into two parts.
The first one is whether it's appropriate to consider opportunity costs at all. I still say that it is, and I don't have much patience for the "argument from unfamiliarity". If you commit to some multi-year use of your money, you really are forgoing what you could have earned with it otherwise. You're giving it up - it's a cost, whether you're used to thinking of it that way or not. But the second part of the argument is, just how much could you have earned? The problem here is that the Tufts study assumes 11% returns, which is just not anywhere near realistic. Mind you, it's on the same order of fantasy as the returns that have been assumed in the past inside many pension plans, but we're going to be dealing with that problem for years to come, too. No, the Tufts opportunity cost numbers are just too high.
Then there's the tax situation. I am, I'm very happy to say, no expert on R&D tax accounting. But it's enough to say that there's arguing room about the effects of the various special tax provisions for expenditures in this area. And it's complicated greatly by different treatment in different part of the US and the world. The Tufts study does not reduce the gross costs of R&D by tax savings, while Light and Warburton argue otherwise. Among other points, they argue that the industry is trying to have it both ways - that cost-of-capital arguments make R&D expenditures look like a long-term investment, while for tax purposes, many of these are deductible each year as more of an ordinary business expense.
Fine, then - I'm in agreement, on general principles, with Light and Warburton when they say that the Tufts study estimates are hard to check and likely too high. But here's where we part company. Not content to make this point, the authors turn around and attempt to replace one shaky number with another. The latter part of their paper, to me, is one one attempt after another to push their own estimate of drug R&D costs into a world of fantasy. Their claim is that the median R&D cost for a new drug is about $43 million. This figure is wrong.
For example, they have total clinical trial and regulatory review time dropping (taken from this reference - note that Light and diMasi, lead author of the Tufts study, are already fighting it out in the letter section). But if that's true why isn't the total time from discovery to approval going down? I've been unable to find any evidence that it is, and my own experience certainly doesn't make me think that the process is going any faster.
The authors also claim that corporate R&D risks are much lower than reported. Here they indulge in some rhetoric that makes me wonder if they understand the process at all:
Reports by industry routinely claim that companies must test 5000-10000 compounds to discover one drug that eventually comes to market. Marcia Angell (2004) points out that these figures are mythic: they could say 20,000 and it would not matter much, because the initial high-speed computer screenings consume a small per cent of R&D costs. . .
The truth is, even a screen of 20,000 compounds is tiny. And those are real, physical, compounds, not "computer screenings". It's true, though, that high-throughput screening is a small part of R&D costs. But the authors are mixing up screening and the synthesis of new compounds. We don't find our drug candidates in the screening deck - at least, not in any project I've worked on since 1989. We find leads there, and then people like me make all kinds of new structures - in flasks, dang it, not on computers - and we test those. Here, read this.
The authors go on to say:
Many products that 'fail' would be more accurately described as 'withdrawn', usually because trial results are mixed; or because a company estimates that the drug will not meet their high sales threshold for sufficient profitability. The difference between 'failure' and 'withdrawal' is important, because many observers suspect that companies withdraw or abandon therapeutically important drugs for commercial reasons. . .
Bring out some of those observers, then! And bring on the list of therapeutically important drugs that have been dropped out of the clinic just for commercial reasons. Please, give us some examples to work with here, and tell me how the disappointing data that the companies reported at the time (missed endpoints, tox problems) were fudged. Now, I have seen a compound fall out of actual production because of commercial reasons (Pfizer's Exubera), but that was partly because it didn't turn out to be as therapeutically important as the company convinced itself that it would be.
And here's another part I especially like:
Company financial risk is not only much lower than usually conveyed by the '1 in 5000' rhetoric, but companies spread their risks over a number of projects. The larger companies are, and the more they merge with or buy up other companies, the less risk they bear for any one R&D project. The corporate risk of R&D for companies like Pfizer or GlaxoSmithKinen are thus lower than for companies like Intel that have only a few innovations on which sales rely.
Well, then. That means that Pfizer, as the biggest and most-merged-up drug company in the world, must have minimized its risk more than anyone in the industry. Right? And they should be doing just fine by that? Not laying people off right and left? Not closing any huge research sites? Not wondering frantically how they're going to replace the lost revenue from Lipitor? Not telling people that they're actually ditching several therapeutic areas completely because they don't think than can compete in them, given the risks? Not announcing a stock buyback program, because they apparently (and rather shamefully) think that's a better use of their money than putting it back into more R&D? I mean, how can Intel be doing better than that? It's almost like chip design is a different sort of R&D business entirely.
Well, this post is already too long, and there's more to discuss in another one, at least. But I wanted to add one more argument from economic reality, an extension of those little questions about Pfizer. If the cost of R&D for a new drug really were $43 million, as Light and Warburton would have it, and the financial and tax advantages so great, why isn't everyone pouring money into the drug industry? Why aren't VC firms lining up to get in on this sweet deal? I mean, $43 million for a drug, you should be able to raise that pretty easily, even in this climate - and then you just stand back as the money gushes into the sky. Don't you?
Why are drug approval rates so flat (or worse?) Why all the layoffs? Why all the doom and gloom? We're apparently doing great, and we never even knew.
+ TrackBacks (0) | Category: Business and Markets | Clinical Trials | Drug Development | Drug Industry History | Drug Prices | Why Everyone Loves Us
March 1, 2011
The Genentech/Roche drug Avastin has been in the news a lot lately, mostly about cost/benefit analysis for its uses in oncology. It's nobody's idea of a cheap drug even for those indications where it shows results. But there's one therapeutic area where it's actually the bargain alternative.
That's AMD, wet age-related macular degeneration. Stopping the growth of those leaking blood vessels in the eye is the standard therapy for the condition, so a VEGF-targeted therapy is just the thing. Lucentis is the anti-VEGF antibody that's approved for that use; it showed very impressive results in the clinic, and seems to perform just as well in the real world.
But Lucentis is expensive. And while it's different from Avastin, it's really not that different. It is, in fact, an opthalmic-delivery-optimized version of the same general antibody, and was developed by the same folks at Genentech. Avastin itself isn't packaged in units small enough for AMD therapy, but if you have a practice with a number of patients, well. . .by the time you split it out, an Avastin injection is about $50, versus nearly $2000 for Lucentis. In fact, a great many physicians in the US (possibly a majority) use Avastin off-label in just that fashion. A UK study last fall shored up that practice with some data, and a number of other studies are underway.
One of these, conducted by the NIH, should be reporting soon. And that's putting Roche/Genentech in an odd position. They have not supplied drugs for the trial, for one thing. Last fall the New York Times reported that rebates are now being offered to opthamologists if they'll use Lucentis, which many have interpreted as a preemptive maneuver to deal with the likely NIH results.
This is a mess, no doubt about it. While Genentech did indeed spend the time, money, and effort to develop Lucentis as a separate therapy, there seems to have been an active effort to avoid finding out if Avastin wouldn't have been just as good. The market does provide perverse incentives like this sometimes - this is an instance where I think that the NIH is doing exactly what it should be doing by running the head-to-head trial.
But I don't think that Roche is going to like the results. And they could find themselves arguing, simultaneously, that Avastin should not be used for AMD, even though it's cheaper than the alternatives and may well be just as effective, while Avastin should be used for metastatic breast cancer, even though it's more expensive than the alternatives and may well not be effective at all. And while the company will surely argue that the numbers are not what they appear, and that there are other numbers that say differently, and that it's all quite complex, they're going to be unable to escape the downward slice of Occam's razor: that in every case, they're arguing for the exact position that maximizes their revenue.
This is what companies do, of course. We shouldn't expect any less. But that doesn't mean that the revenue-maximizing path is always the right one, either.
+ TrackBacks (0) | Category: Clinical Trials | Drug Prices | Why Everyone Loves Us
January 10, 2011
Thanks to Jim Edwards at Bnet, we have an example of some of the worst pharma sales techniques imaginable. A lawsuit alleging that Gilead Pharmaceuticals had been illegally pushing off-label indications for their angina medication Ranexa (ranolizine) was dropped recently, which brought a lot of court papers into view. According to the whistle-blower who filed the suit, a director of sales force training at the company said that their mission to, and nothing will do except a direct quote, "sell gobs of dope" and "get those pills into people's mouths any way you can."
The drug's supposed to be used only for refractory angina, but the suit alleges that Gilead's sales people were targeting the larger cardiovascular market. "I do not care what you do to sell the drug," a sales manager is quoted as saying. "I don't see anything and I don't hear anything. Just get those scripts."
Now, I realize that these are papers from only one side of this case. And as it turns out the Department of Justice actually did not get involved in the suit, which is probably why it's been dropped (for now). Furthermore, even if these allegations are true, they may well reflect the culture of CV Therapeutics, the company selling Renexa when Gilead bought them in 2009.
But this should really be an alarm bell for the management at Gilead. If they have people in their sales organization with this worldview, then it's only a matter of time before some of them do enough, say enough, present enough, and write down enough evidence to allow a successful whistle-blower case. And if that's what's going on, then such a suit would be richly deserved. This sort of stuff is idiotic, and it's wrong, and it's a big reason why the public opinion of our industry has been relentlessly sliding down over the years.
+ TrackBacks (0) | Category: Business and Markets | Regulatory Affairs | Why Everyone Loves Us
December 2, 2010
You've heard, no doubt, of the problem of ghostwritten articles associated with the drug industry. But now there's a report of an entire ghostwritten book. It is (was, since it came out over ten years ago) a guide for family physicians on psychiatric pharmacotherapy, and its authors - scratch that, I mean the names on the cover - are the current chairman of the psychiatry department at Miami and the former chairman at Stanford.
Now, it's not like these two would have been likely to sit down and write the book themselves under normal conditions, either. Had they been so minded, they would surely have farmed out the work to lesser colleagues. Textbook writing like this is not an exalted activity. But from what this article says, it does look as if a medical writing firm working with SmithKline did the actual grunt work, and that it was the company that had final approval over the page proofs.
I have no idea if the content of the book is accurate or not, but that's really only a secondary point. Signing your name as an author to something written by someone else, for their own interests, is unethical. That's the point.
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September 24, 2010
So now Avandia (rosiglitazone) looks to be withdrawn from the market in Europe, and heavily restricted here in the US. This isn't much of a surprise, given all the cardiovascular worries about it in recent years, but hindsight. Oh, hindsight: all that time and effort put into PPAR ligands, back when rosi- and pioglitazone were still in development or in their first few years on the market. Everyone who worked on metabolic diseases took a swing at this area, it seems - I spent a few years on it myself.
And to what end? Only a few drugs in this class have ever made it to market, and all of them were developed before we even knew they they hit the PPAR receptors at all. The only two that are left are Actos (pioglitazone) and fenofibrate, which is a PPAR-alpha compound for lack of any other place to put it. Everything else: a sunk cost.
Allow me to rant for a bit, because I saw yet another argument the other day that the big drug companies don't do any research, no, it's all done at universities with public funds, at which point Big Pharma just swoops in and makes off with the swag. You know the stuff. Well, I would absolutely love to have the people who hold that view explain the PPAR story to me. I really would. The drug industry poured a huge amount of time and money into both basic and applied research in that area, and they did it for years. No one has to take my word for it - ask any of the academic leaders in the field if GSK or Merck, to name just two companies, managed to make any contributions.
We did it, naturally, because we expected to make a profit out of it in the end. The whole PPAR story looked like a great way to affect metabolic disorders and plenty of other diseases as well: cancer, inflammation, cardiovascular. That is, if we could just manage to understand what was going on. But we didn't. Once we all figured out that nuclear receptors were involved and got busy on drug discovery on that basis, we didn't help anyone with any diseases, and we didn't make any profits. Big piles of money actually disappeared during the process, never to be seen again. You could ask Merck about that, or GSK (post-rosiglitazone), or Lilly, or BMS, or Bayer, and plenty of other players large and small.
No one hears about these things. We're understandably reluctant to go on about our failures in this industry, but the side effect is that people who aren't paying attention end up thinking that we don't have any. Nothing could be more mistaken. And they aren't failures to come up with a catchy slogan or to find a good color scheme for the packaging - they're failures back at the actual science, where reality meets our ideas about it, and likely as not beats them down to the floor.
Honestly, I don't understand where these they-don't-do-any-research folks get off. Look at the patent filings. Look at the open literature. Where on earth do you think all those molecules come from, all those research programs to fill up all those servers? There are whole scientific journals that wouldn't exist if it weren't for a steady stream of failed research projects. Where's it all coming from?
Note: previous posts about PPAR drug discovery can be found here, here, and here. Previous posts (and rants) about research in the drug industry (and academia, and the price of it all) can be found here, here, here, here, here, here, here, here, and here.
+ TrackBacks (0) | Category: Diabetes and Obesity | Drug Industry History | Regulatory Affairs | Why Everyone Loves Us
September 17, 2010
Here's an uncomplimentary look at the whole concept of "Key Opinion Leaders" in drug marketing. I think this part gets at the real reason many people agree to do this (and a lot of other things besides):
"It strokes your narcissism," says Erick Turner, a psychiatrist at the Oregon Health and Science University. There is the money, of course, which is no small matter. Some high-level KOL's make more money consulting for the pharmaceutical industry than they get from their academic institutions. But the real appeal of being a KOL is that of being acknowledged as important. That feeling of importance comes not so much from the pharmaceutical companies themselves, but from associating with other academic luminaries that the companies have recruited. Academic physicians talk about the experience of being a KOL the way others might talk about being admitted to a selective fraternity or an exclusive New York dance club. No longer are you standing outside the rope trying to catch the doorman's eye, waiting hungrily to be admitted. You are one of the chosen.
Although, as the piece makes clear, it's more about the life of not-quite-key opinion leaders. As with every club, there are inner rooms and outer rooms. . .
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May 5, 2010
You don't often get to see so direct an exchange of blows as this: Steve Nissen, of cardiology and drug-safety fame, published an editorial about GlaxoSmithKline and Avandia (rosiglitazone) earlier this year in the European Heart Journal. And GSK took exception to it - enough so that that the company's head of R&D, Moncef Slaoui, wrote to the editors with a request:
". . .(the editorial) is rife with inaccurate representations and speculation that fall well outside the realm of accepted scientiﬁc debate. We strongly disagree with several key points within the editorial, most importantly those which imply misconduct on the part of GSK and have identiﬁed some of these issues below. On this basis, GSK believes that it is necessary for the journal to withdraw this editorial from the website and refrain from publishing it in hard copy, until the journal has investigated these inaccuracies and unsubstantiated allegations.
Instead of doing that the EHJ invited Nissen to rebut GSK's views, and ended up publishing both Slaoui's letter and Nissen's reply, while leaving the original editorial up as well. (Links are PDFs, and are courtesy of Pharmalot). Looking over the exchange, I think each of the parties score some points - but I have to give the decision to Nissen, because the parts that he wins are, to my mind, more important - both for a discussion of Avandia's safety and of GSK's conduct.
For example, Slaoui disagreed strongly with Nissen's characterization of the company's relations with a coauthor of his, Dr. John Buse. Nissen referred to him as a prominent diabetes expert who had been pressured into signing an agreement barring him from publicly expressing his safety concerns, but Slaoui countered by saying:
The document that Dr Buse signed was not an agreement barring him from speaking but was a factual correction regarding data, which did not bar him from speaking at all. In fact, Dr Buse subsequently communicated his views regarding the safety of rosiglitazone to FDA.
Nissen's reply is considerably more detailed:
The intimidation of Dr John Buse by GSK was fully described in a report issued by US Senate Committee on Finance.3 The Senate Report quotes an e-mail message from Dr Buse to me dated 23 October 2005 following publication of our manuscript describing the risks of the diabetes drug muraglitazar. In that e-mail, Buse stated: ‘Steve: Wow! Great job on the muraglitazar article. I did a similar analysis of the data at rosiglitazone’s initial FDA approval based on the slides that were presented at the FDA hearings and found a similar association of increased severe CVD events. I presented it at the Endocrine Society and ADA meetings that summer. Immediately the company’s leadership contact (sic) my chairman and a short and ugly set of interchanges occurred over a period of about a week ending in my having to sign some legal document in which I agreed not to discuss this issue further in public. I was certainly intimidated by them but frankly did not have the granularity of data that you had and decided that it was not worth it’. In an e-mail to GSK, Dr Buse wrote: ‘Please call off the dogs. I cannot remain civilized much longer under this kind of heat’
This, to me, looks like a contrast between legal language and reality, and in this case, I'd say reality wins. The same sort of thing occurs when the discussion turns to the incident where a copy of Nissen's original meta-analysis of Avandia trials was faxed to GSK while it was under review at the NEJM. Nissen characterizes this as GSK subverting the editorial process by stealing a copy of the manuscript, and Slaoui strongly disagrees, pointing out that the reviewer faxed it to them on his own. And that appears to be true - but how far does that go? GSK knew immediately, of course, that this was a manuscript that they weren't supposed to have, but it was then circulated to at least forty people at the company, where it was used to prepare the public relations strategy for the eventual NEJM publication. I don't think that GSK committed the initial act of removing the manuscript from the journal's editorial process - but once it had been, they took it and ran with it, which doesn't give them much ethical high ground on which to stand.
Many other issues between the two letters are matters of opinion. Did enough attention get paid to the LDL changes seen in Avandia patients? Did the lack of hepatotoxicity (as seen in the withdrawn first drug in this class) keep people from looking closely enough at cardiac effects? Those questions can be argued endlessly. But some of GSK's conduct during this whole affair is (unfortunately for them) probably beyond argument.
+ TrackBacks (0) | Category: Cardiovascular Disease | Clinical Trials | Diabetes and Obesity | Toxicology | Why Everyone Loves Us
April 15, 2010
Protip: making slides that refer to your company's drug as "snake oil" and illustrate its use with a cartoon of witches standing around a cauldron is perhaps unwise. Particularly when you're in Marketing. Particularly when you also include unapproved uses for your drug on the slides. Worth noting, Pfizer.
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April 14, 2010
We all hear about the new drugs that have just been approved, and we all keep track of the drugs that are coming off patent. But what about the really old ones, the drugs that made it to the market long before today's regulatory framework? There have long been medicines that are generally recognized as reasonably safe and effective, but have never been through much of the modern process.
The FDA has, for the last few years, been trying to catch up on these things, and has offered exclusivity to any manufacturers who are willing to run clinical trials on older medicines. But this hasn't always worked out the way that it was intended - witness the case of colchicine, a well-known natural product drug that's used for some inflammatory diseases (and used to be a chemotherapy agent, too). The Wall Street Journal has a good story on this.
URL Pharma, a generic manufacturer, took the time and trouble to get fresh data on colchicine for gout attacks, and was granted a three-year marketing exclusivity period. So far, so good - but they then turned around and ran the price up by a factor of fifteen. They also filed suit against other small companies that were selling colchicine in the generic market, with the result that other domestic sources of the drug might dry up (four of the other companies are fighting back in court).
So is this the advent of evidence-based medicine, coming to an area that had little of it before, and therefore a good thing? Is it an abuse of the system by a company that saw an opportunity to suddenly acquire pricing power? Is it just what the FDA should have expected, given that three years of marketing rights have to make up for the cost of the clinical work, with the profits likely to disappear immediately afterwards? I think it's going to be hard to have it both ways. If you expect companies to go back and fill in the clinical profile of older drugs, you do need give them some incentive to do it. But then what's to keep them from pounding that incentive in good and hard, as seems to be happening here?
I'm not sure how to split that difference, especially not with any general rule, because each case will probably be different. The new clinical trials might, in fact, uncover something really useful that was previously unknown - or they might just confirm that the way the drug was being dosed was, in fact, just the way it should be dosed. One of those seems more deserving of compensation than the other, but there's no way of knowing which result you're going to get a priori. I have an aversion to telling a company how much it can charge for a drug, but it's not like URL Pharma discovered colchicine, or had to do any of the risky early-stage work on it. I can justify some pricing moves (although not all of them) by companies that are doing discovery research, because so much of that doesn't lead to anything marketable. (Take, for example, virtually everything I've worked on my whole career). But a generic company that's coming in to dot the Is and cross the Ts on the FDA paperwork is something else again.
Perhaps if the FDA really feels that backfilling the regulatory work on drugs that no one owns in particular is important enough, they should fund the work themselves. But that opens up issues of its own, too.
+ TrackBacks (0) | Category: Business and Markets | Drug Industry History | Drug Prices | Why Everyone Loves Us
January 13, 2010
I'd like to take the time this morning to deal with two conspiracy theorists, and I'll take them in order of increasing foil-hat thickness. First up is Joe Collier, an emeritus professor who writes a blog for the British Medical Journal. He notes the recent study that suggested that cell phone emissions could have a beneficial effect in rodent models of Alzheimer's. I didn't give that any play on this blog - too many other things going on, and I don't find any rodent models of Alzheimer's particularly trustworthy to start with. But the study also showed (apparently beneficial) effects on normal rodents, and is certainly worth following up on.
But Collier takes this result and runs with it:
So what happens next? Faced with the prospect, albeit remote, of losing a lucrative market, I predict that the industry will want to quash the electromagnetic treatment theory as soon as possible. To this end, I would expect that the industry propaganda machine will go into overdrive in an attempt to undermine the credibility and findings of Arendash, and to overwhelm the decision makers (ultimately the funders) so that the use of drugs is maintained. The power of industry as an information generator and distributor is unmatched, and industry will use all its persuasive skills. . .
And so on, and so on. The problem (well, one problem) with this line of reasoning is that it could also be extended to other new drugs for Alzheimer's. If the industry wanted to keep selling the existing Alzheimer's drugs at all cost, why would we go to the trouble of trying to develop better ones? We are, you know - I have no idea how much money has vanished down that particular pipe, but it sure has been a lot, and I've helped flush some of it through myself. But we're not the monolithic "drug industry" over here. We're a bunch of companies climbing all over each other trying to make money, take each others' market share, and get to the clinic faster than the other guys down the road. That's what keeps things moving - everyone who's done industrial drug discovery has read a new press release or seen a new patent filing and heard the footsteps coming up from behind.
So I have a counterprediction for Collier. The South Florida study will, in fact, be followed up on. It's interesting enough. And if there's something to it, someone will find a way to optimize the effect and make money off it. And the drug industry will not mobilize to squash it, either - honestly, we have enough to do trying to get our own stuff to work. I haven't seen a single statement from a drug company about this study so far myself, and if Joe Collier has, I'd invite him to produce it.
Next! OK, now we move on to something that seems to be getting some more headlines in the past week or two, and that people have been e-mailing me about. One Wolfgang Wodarg, a German doctor and SPD politician, has been telling everyone that the handling of the H1N1 flu epidemic should be investigated because, he says, it's all a "fake pandemic" whipped up by the drug companies. (You can get all the Wodarg you need, and more, at his web site). Stories in the more excitable press make him sound like the head of all the health agencies of Europe, but people are confusing the Council of Europe (where Wodarg heads a subcommittee) with the EU, among other things they're mixing up.
The World Health Organization is now fielding questions about whether they oversold the epidemic, but it's a sure bet that (if it taken off more drastically) they'd be fielding even more about why they weren't prepared for it. At any rate, if you think that the Monolithic Drug Industry can simultaneously push around the WHO, the CDC, and the public health agencies of every other country in the world, I invite you to think again. If we could do all that, we'd at least be in good enough financial shape that we wouldn't be laying thousands of people off and doing ridiculous mergers out of desperation.
Wodarg, for his part, seems to have been sounding all kinds of alarms for a long time now. Back in the fall, he was telling everyone that the vaccine was going to give them cancer, for example. In case anyone's wondering, I treat his suggestions with the contempt that they appear to richly deserve.
+ TrackBacks (0) | Category: Alzheimer's Disease | Infectious Diseases | Snake Oil | Why Everyone Loves Us
November 9, 2009
There's a long, detailed article up over at Bloomberg on the recent run of huge fines for off-label promotion of drugs. Pfizer, Lilly, Bristol-Meyers Squibb, and Schering-Plough all get mentioned in great detail.
And there's a key point from the whole depressing thing: the reason that marketing departments do this kind of thing is that it makes money. Even after you pay a billion dollars in fines, you can still come out ahead, and you might not even have to pay the fines. It's just being put down as a cost of doing business - it's a speeding ticket, and it's being weighed against the cost of driving under the legal limit.
But there's no way that our industry will gain - or regain - respect as long as we operate this way. Have the people involved priced that out as well?
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October 15, 2009
A couple of articles have come together and gotten me to thinking. Back during the summer, long-time medicinal chemist Mark Murcko published a short editorial in Drug Discovery Today comemmerating the Apollo 11 moon landing's 40th anniversary:
"People like me, who are old enough to actually remember the events of July 1969, are instantly assailed with powerful and reflexive emotions when we think back to the effect Apollo had on us: the excitement, awe and wonder. My family, like so many others, was obsessed with space exploration. The walls of our den were covered with NASA photos, diagrams and technical bulletins – anything we could get them to send us. Models of rockets hung from the ceiling by fishing line. . .We soaked it all in, and the events of that day remain a seminal memory of my childhood. It was glorious; nothing could possibly be more exhilarating.
And yet...there are some interesting parallels to what all of us, engaged in the roiling tumult of biomedical research, do here and now. Our mission – to invent new therapies that transform human health and alleviate suffering – captures the imagination as profoundly as did Apollo. Our efforts once were regarded with the same admiration as the NASA breakthroughs (and while public perceptions may be different today, our mission has not wavered). We are attempting, one could argue, even more complex technical achievements. . . ."
And just the other day I came across this piece in The New Atlantis entitled "The Lost Prestige of Nuclear Physics". (Via Arts and Letters Daily). Its thesis, which I think is accurate:
"The story of nuclear physics is one of the most remarkable marketing disasters in intellectual history. In the space of a few decades, the public perception of the atom’s promise to serve humanity, and the international admiration that surrounded the many brilliant people who unraveled the mysteries of matter, had collapsed. So pronounced was the erosion of attitudes toward nuclear physics that, by the late 1990s, several European physicists felt it necessary to establish an organization called Public Awareness of Nuclear Science for the explicit purpose of improving the public image of their discipline."
Of course, in that case, there was that little matter of the atomic bomb and the subsequent arms race) to contrast against the excitement of the scientific discoveries and their peaceful uses. One might argue that for the general public, it was all very admirable to be able to figure out the forces that kept atoms together, but when these forces turned out to have such alarming and immediate real-world consequences, the backlash was profound. And while I sympathize with the nuclear physicists, I have to only wish them luck in their attempts to regain a good public image. That's because those consequences are still very much with us, as a glance at the news will show.
But the fall from grace of drug research has been almost as profound, and we've never developed an equivalent of nuclear weapons, have we? In our case, I think the problem has been that we're a business. We bill people for our discoveries when they work. And as I've argued here, people will always have a much more emotional response to any issue that affects their physical health, and can quickly come to resent anyone that charges them money to maintain it. (Doctors, though, benefit from the one-on-one patient relationship. People hate hospitals, hate health insurance companies, and hate drug companies, but still respect their own physicians). This, as manifested by complaints about drug prices, uneasiness about hard-sell advertising, and suspicion about our motivations and our methods, seems to be what's sent public opinion of us into the dumper.
But in the end, Murcko has a point. We really are doing something good for humanity by working on understanding diseases and trying to find treatments for them. Not everything about the process is optimal, for sure, but can anyone argue that the broad effort of pharmaceutical research has been a bad thing? The problem is, it's easy to look around, and slide from there into self-pity. But moaning about how no one appreciates us is a waste of time. The best cure is, as far as I can see, to give people reasons to realize what we're worth.
People who've been pulled back from the brink of death from infectious disease or cancer already have those reasons. But there are so many terrible unmet medical needs still out there, which means that there's plenty of room for us both to do good and to show that we can do good. Yes, it will cost a lot of money to do that, which means that what cures will come will also cost money. But with the partial exception of air to breath, most of the necessities of life tend to involve money changing hands. That's not a disqualification.
So to the readers out there in the industry - go do some good work today. Don't spend too much time in your more useless meetings. Stand up in front of your fume hood or sit down in front of your keyboard and do something worthwhile. It's a worthwhile job, even if some people don't realize that yet.
+ TrackBacks (0) | Category: Drug Industry History | Drug Prices | Why Everyone Loves Us
September 2, 2009
Forest Labs has done very, very well with Lexapro (escitalopram) over the years. They're a comparatively small company, and their collaboration with Lundbeck (also a comparatively small company) in the antidepressant field has been the biggest event in their history.
Lexapro is the pure enantiomer of the earlier Lundbeck drug Celexa (citalopram), and it's been a very successful follow-on. (For a nasty spat over generic production of citalopram, see here). I'm generally not too keen on the follow-up-with-the-single-enantiomer strategy, I have to say. In general, I think it's slowly disappearing from the world as regulatory agencies look down on racemic mixtures. (I've never worked on a program myself where we seriously considered taking a racemate to the clinic - we always assumed that we'd end up developing a single enantiomer).
The New York Times has an article out detailing some of Forest's marketing plans, as revealed in documents before a Senate committee. Some of what the article has to say I agree with, and some of it I have to raise an eyebrow at, and we'll get to both of those. First off, in an area as large and competitive as antidepressants, I don't think that anyone should be surprised at what was in Forest's plan: lots and lots of lunches for physicians' offices, plenty of continuing medical education lectures (with plenty of food), and so on. One line shows that the company budgeted $34.7 million dollars to pay 2,000 physicians to deliver about 15,000 talks on the drug to their colleagues.
The Senate seems to be shocked at all this - well, pretending to be shocked, because no national politician can ever really be surprised at any way that money is used to influence anyone's decisions. But I'm not shocked, either. Leaving aside (just for a moment) the question of whether drugs should be promoted this way, the fact is that they are promoted this way, and have been for a very long time. And breaking down that lecture figure, that means a bit over $2,000 per lecture, and we don't know if that figure is supposed to cover just the honoraria for the speakers, or the whole cost of the lectures. Even if we assume the former, that comes to nearly eight lectures per physician per year, giving each of them about $17,000, pre-tax. Compared to the cost of advertising in the medical journals, general-interest magazines, or especially on television, that probably represents an excellent return for the money.
And Forest has been spending plenty of it. The article mentions that Vermont, for example, found that Forest (despite their size) was outspent in that state only by Lilly, Pfizer, Novartis, and Merck. Considering that those companies have many more drugs to sell than Forest does, that's an impressive figure. Of course, the only reason you spend money on marketing is to make even more of it back in sales, and they've certainly been doing that, too.
There are several questions here, and perhaps it's best to take them one by one. First off, is Lexapro worth what people (and insurance companies) are paying for it? The snappy economic answer is that of course it is, since that's the price that's willingly being paid, but let's talk utility instead. It does seem to be a good drug, arguably better than many of the others. It's been run head-to-head with Cymbalta (duloxetine), which is no poor performer itself, and shown to be superior And earlier this year, a Lancet article analyzed 117 controlled trials and found that there were clear clinical differences between the various antidepressants, and that Lexapro and Zoloft (sertraline) stood out as better than the rest.
The article recommended starting with the latter in new patients, I should note, and sertraline's now generic. I think that Forest's battle in the market is both against their similarly expensive competitors (where I think that they can claim to have an edge) and against cheap sertraline, where they may well not. (Update: and against their own (now generic) racemate - I'm digging into that comparison, and it'll be the subject of a follow-up post.) That said, depression is a famously heterogeneous field, and patients often have to try several drugs before somethings works, for reasons that are unclear. So yes, overall, I think that Lexapro is a useful drug, and that patients are getting benefit for their money.
The New York Times article is rather disingenuous on this point, by the way - you'd never know from it that there were differences between antidepressants, since they treat Lexapro and Prozac as interchangable, and you'd never know that there was evidence that Forest's drug might well be near the top of the list.
Next question: is Lexapro worth what Forest is spending to promote it? That question also splits into two, economically, depending on what we mean by "worth". As in the price question, from a strictly accounting perspective, we have to presume that Forest is seeing a financial benefit from their marketing activities; marketing does not run at a loss, not for long, it doesn't. And from a utility/societal benefit perspective, if Lexapro really is superior to most of their competitors, then I think the company is justified in making that case as loudly as they can.
Now we get to the tough one: are Forest's marketing activities appropriate or ethical? The arguing can now commence, because this is where we try to figure out what "as loudly as they can" actually means. I think the industry would be better off if there were less of an arms race in the marketing area. (Update: just to pick one benefit, it would make us look, in general, less sleazy, which is not to be underestimated). Even though marketing doesn't run at a loss, the return from it could be still higher if it were less expensive to do. Huge sales forces are expensive, and one of the reasons the sales forces are so big is that the competition's sales forces are so big, and so on. It's hard for any one company to climb down from its position, just from a game-theory point of view, so the most likely way for this to happen is through across-the-board restrictions on marketing, as enforced by the FDA, the FTC, or by physicians themselves. (I should mention, though, that there has been a voluntary retreat in the area of brand-covered swag). We're already seeing this pendulum swing back in the last few years, and it's fine with me if the process continues for a while longer. Doctors are perfectly free to close their doors in the faces of drug reps, and if I were in their position, I'd be tempted to do just that in many cases.
So if we come back around to that Times headine, it reads "Document Details Plan to Promote Costly Drug". And to that, I can say yes, it's a costly drug, set as high as the company thinks that people will pay for it, and to a level that they think they can make the most money with before its patent expires. And yes, Forest has a plan to maximize those profits, and if I were a shareholder (I'm not), I'd be righteously steamed if they didn't. And they did indeed write that plan down, so there are plenty of documents. I'd rather, myself, that the plan looked different than it does, and that's the way the world seems to be heading. But no matter what regulations come into force, there will always be plans to promote things that cost money.
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August 14, 2009
I do a lot of talking around here about how the general public doesn't really have a good idea of what goes on inside a drug company. But a conversation with a colleague has put me to thinking that this might be largely our own fault.
Consider the public face that our industry projects. Look at the press releases and the advertisements - what's the impression that you get? That there is a defined process for discovering drugs, for one thing, and what's more, that we are the master of it. Now, I know that we don't always send out that message. There are attempts to tell people about how many compounds have to be made, how many projects end up failing. But for the most part, we don't press-release that stuff.
No, the press releases are for the investors, and for them, we want to project that we're productive, confident, resourceful. . .in short, that we've got things under control. The last thing Wall Street wants to hear about is that you don't always know which drug targets are the right ones to work on, that you're not quite sure of the best way to prosecute them, and that (despite continuing efforts) these conditions look to obtain for quite a while to come.
And this attitude is one of the things that seeps out into the general public consciousness. That, I think, is why you get people who are convinced that we could cure a lot of these diseases, but that we just don't - you know, for all sorts of evil and profitable reasons. They've bought into our hype. If we haven't cured the common cold, that must be because we make a lot more money selling people stuff for it, not because antiviral drug development is flippin' difficult. (Especially for something like the common cold, but that's another story).
Now, to some extent, there is a defined process for discovering drugs - well, several defined processes. It's just that it doesn't work all that well, not on the absolute scale. No one could look at clinical failure rates of around 90% and say that we've got everything covered. Weirdly, that's one of the things that gives me hope for the industry, that even small improvements would make a big difference. What if only 80% of all the compounds we took into the clinic crashed and burned? That would be great! It would double our success rate!
But when I mention that 90% problem to people outside the drug industry, they usually have no idea. All they hear about are the successes. Perhaps it would do us some good to mention the failures once in a while?
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August 11, 2009
Novartis has had trouble for years with animal rights activists, and now things are getting nastier than ever:
Novartis CEO Daniel Vasella says the people who burned down his holiday home and defiled his family's graves are not criminals but "terrorists" beyond dialogue.
In an interview with the SonntagsBlick newspaper, the 55-year-old chief executive said the attacks have changed his life and that more needs to be done to rein in the animal-rights extremists believed responsible for the "wicked" acts.
Last week Vasella's home in Austria was set on fire. In July his mother's urn was stolen and his dead 19-year-old sister's grave was desecrated. Crosses bearing his name and that of his wife were placed in a Chur cemetery. Workers' cars have been torched and angry graffiti sprayed on walls. . .
"How far do things have to go before you can speak of terrorism?" Vasella told the newspaper.
I'd say that's far enough, definitely. If that's not being done with intent to terrorize, then what? One idiotic part of the whole business is that the protesters seem to be trying to get Novartis to stop working with Huntingdon Life Sciences, the British animal testing company. (Similar tactics have been used elsewhere). But Novartis says that they currently have no relationship at all with HLS, and haven't for several years.
Mere statements of dull fact, though, won't make a dent in the self-righteousness of the sorts of people who think that spray-painting gravestones is a blow for justice.
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August 6, 2009
As much as I defend the industry I work in, I have to talk about things that we do that I don't think are so defensible. Another one of those has come up thanks to the New York Times and PLoS Medicine, who obtained a pile of records from a current court case.
This article has the details. Wyeth seems to have contracted with a medical writing outfit (DesignWrite) to produce and place a number of review articles covering hormone therapy for menopausal women. (Wyeth, of course, was the main player in that market). The articles seem to have been entirely written by the staff at DesignWrite - authors are listed as "TBD", and then academics were recruited to serve as lead authors and to submit the papers to journals.
No mention was ever made in the published papers of the medical writing group's role, nor of Wyeth's (who were paying them for this service). As far as the readers could see, these were the standard sorts of review articles that show up in the medical literature all the time. And that's the part that bothers me. For all I know, these articles were reasonable reviews of the field - I'm no great expert in the field, so I can't judge if they're truly fair summaries. But even if they are, the readership of a journal is entitled to know that a drug company was the impetus behind them, and they're also most certainly entitled to know the actual authors (as opposed to the people who would appear to have been the authors, but just signed off on the stuff).
I think that drug companies are entitled to promote their products. But full disclosure should be the the standard to try to reach in any market: put it all out on the table, and let physicians make their own decisions. It doesn't help, not one bit, to get papers into the journals this way - because when a company goes to such lengths to hide its participation, it almost looks as if it has something to hide. . .
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March 23, 2009
Last week's discussions around here about the merits (and demerits) of pharma-industry research seem to be coming at what's either a really good or a really bad time. Take a look at this Washington Post article on the handling of clinical data at AstraZeneca.
These details have come up during a large array of lawsuits over Seroquel (quetiapine). And if they're as represented in this article, it doesn't make AZ's marketing folks look very good, and (by extension) the rest of the industry's. We shouldn't be doing this sort of thing, on general principle. But if that's not enough, and it probably isn't, here's a more practical concern: does it take much imagination or vision to think that, with all kinds of health care reform ideas in the air, this sort of behavior might just make Congress want to reform our industry really good and hard?
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March 20, 2009
So, in light of the Reuben scandal of forged data about pain management in surgery patients, the question naturally comes to mind: how much role did industry play? I’ve seen articles (and had comments here) to the effect that industry-sponsored research is worthless: discount it, can't trust it, bought and paid for, and so on.
The problem is, you can't completely shake that accusation. Industries (and not just the drug industry, by any means) are willing to pay for results that tell them what they want to hear. And while at times that's crossed over into outright fraud, many times it's just that you can set up all kinds of studies, in all kinds of ways, and get all kinds of answers. Run enough of them, and you can choose the ones you like and pretend the others aren't there.
The whole idea of scientific research is that you don't operate like this, of course, and eventually these things do get settled out. If the drug industry really did make sure that only happy results came out, we'd never have catastrophic clinical trial failures, and never have any drugs recalled from the market. And things like the (Nobel-worthy) H. pylori story behind stomach ulcer formation never would have seen the light of day if the industry were capable (on the other hand) of burying everything it didn't want to hear about.
But there are biases, real and potential, and they always have to be looked out for. One error, though, is to assume that these biases can be eliminated by turning to academic research instead. That's the point of a recent Op-Ed in the Washington Post by David Shaywitz, who's worked both sides of the business:
Part of the problem is that we've been conditioned to trust university research. It is based, after all, on the presumably lofty motives of its practitioners. What's not to like about science carried out by academics who have nobly dedicated their lives to understanding the unknown, furthering knowledge and serving humanity?
. . .University researchers are in a constant battle for recognition and the rewards associated with success: research space, speaking engagements, funding and autonomy. Consequently, while academic research is often described as "curiosity-driven," the reality is messier, as (curiously) many researchers tend to pursue the trendiest technologies and explore topics that happen to be associated with the most generous levels of research support.
Moreover, since academic success is determined almost exclusively by the number and prestige of research publications, the incentives to generate results are exceedingly powerful and can encourage investigators to see patterns that may not exist, to disregard contradictory observations that might be important, to overvalue data that might be preliminary or unreliable, and to embrace conclusions that deserve to be viewed with far greater skepticism.
Shaywitz goes on to make the same point I did above - that the system is ultimately self-correcting - but is calling for people to recognize that academic research is also done by human beings, with all that entails. John Tierney at the New York Times had taken up this topic last fall, and wondered about what would happen if enough researchers decided to stop taking industry funding because they were tired of having their integrity questioned.
Tierney's responded to the Shaywitz piece now as well. The comments from his readers are all over the place each time. Some of them are (correctly, to my mind) going along with the idea that research always comes in with various potential biases and agendas, and should be judged case-by-case no matter the source. There are, naturally, some who aren't buying anything that might get industrial research off the hook.
"In industry sponsored comparative studies of medical treatments, the sponsor’s product always comes out on top," says one commenter there. But that's not true. I can give you plenty of examples right off the top of my head. For sure, we try to run studies that will show a benefit for our therapies - but we also have to pin these down to the real world for people (and the FDA) to have a better chance of trusting the results. We're not going to set up a trial that we have good reason to think will fail: life is too short, and the supply of funds is not infinite. You target the diseases (and the patients) that you think will benefit the most (and show the most impressive results, naturally).
And that's a bias to consider right there: we don't set up our trials randomly, so keep that in mind. But no one sets up drug trials randomly, anywhere. There's always a reason to do something so expensive and time-consuming - you should always keep that in mind, weigh it in your calculations, and decide from there.
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March 12, 2009
Smack in the middle of the biotech district of Cambridge, at one of the busy intersections, is a whopping billboard. It’s one of those that rotate vertical segments between three faces, and for some weeks now, all three of them have proclaimed loudly “Stop Biotech Greed!” Variations on the theme include how much money biotech companies make, how the state should stop trying to encourage the industry and spend its money somewhere else, and so on. I’m sure the folks at Biogen enjoy seeing this thing switching between messages all day long; it’s right across from one of their buildings.
I wasn't at all sure who was funding this, because that billboard would presumably take more cash to lease than many activist groups have on hand. I do see occasional hand-made flyers against a proposed biological lab that Boston University wants to build, an issue that’s been fermenting around here for some time, but this was the first blast of anti-industry sentiment that I’d noticed. A quick look around provided the answer, though: the message is from the International Brotherhood of Electrical Workers, and the bottom of the dispute seems to be that several building project are going on that employ non-union electricians. And since a significant amount of the new construction in this area has to do with biotech and associated fields, well. . .
I suppose that they figured that attacking "biotech greed" will play better than a billboard saying "Hire Our Members Or We'll Insult You Again".
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April 18, 2008
File this under “does no one any good”. As many of you will have seen, JAMA just published a report on various studies that Merck has conducted and published over the years on Vioxx. The conclusion was that the company basically wrote the papers, and then went shopping for well-known academic names as authors. No, this one isn’t going to be good for anyone involved.
There seems little doubt that this practice does go on. I’ve never been in a position to see it happen, but it’s been reported for years. There are whole companies whose business is “scientific writing and communication”, and some of these seem to be in the business of turning studies into manuscripts, with no mention of their work in the final version. (The JAMA article found evidence of this sort of thing as well).
Scientific authorship is a messy business, true, and there are a lot of journal articles whose entire list of authors might have trouble with a pop quiz on the details of the paper. It is, in my mind, perfectly acceptable for one or two people on the author list to do most of the writing, with everyone else contributing suggestions and revisions. That’s how every paper I’ve been on (or written) has been done. But the worst of these Merck cases look like a search for a lead author or co-author, which is just unacceptable.
At least one of the authors named in the article is disputing its conclusions. Stephen Ferris of NYU says that he was no figurehead, and calls the JAMA paper “egregious” for having done no follow-up with the people it names. I suspect that there will be others in his category – the JAMA offices are getting a lot of testy e-mails this week, I’m sure. Of course, even the guilty are going to be sending them, since no one wants acquiesce to the label of “paid shill for publication”.
And that’s the problem. I can believe that the JAMA authors (Joseph Ross of Mt. Sinai et al.) could have cast their net too widely as they dug through the piles of discovery documents from the Vioxx litigation. But, unfortunately, I can’t believe that all their examples are mistaken. Enough chicanery goes on with authorship in purely academic settings – I can well believe that it happens in industry/academic collaborations.
But that’s the problem right there: the idea behind such a collaboration is, at least partly, to lend credence to the study’s results. Rightly or wrongly, industry studies on marketed drugs are perceived as needing the help. It’s the money involved, of course. When an industrial group publishes a paper on cell physiology or on a new method for cleaning up palladium-catalyzed reactions, no one doubts the results. But when it’s something that might have a direct and immediate effect on millions of dollars in revenue, doubts naturally set in. They always will, even if the research is beyond reproach.
And that’s why this ghostwriting business just makes the problem worse. I haven’t seen anyone suggesting that the Merck studies themselves are bogus – they had damn well better not be – but by playing games with the external author list, the company invites suspicion. I’m willing to bet that many people outside our industry who have just read the headlines on this story have assumed that the results were cooked up, just like the authorship. This is not what the industry needs. It never has been, and we need it less now than ever.
If we’re going to win back the trust of the general public – which we’ve lost, in case anyone hasn’t noticed – we’re going to have to cut out the shortcuts, stop the doubletalk, and act as if what we’re doing (drug discovery) is something to be proud of. Sure, this is a business – we sell improved health for money, and since it sure costs money to do it, there’s nothing in that transaction to be ashamed about. So why are we acting as if the only way to do business is under the cover of darkness?
We’re not going to have much of a business if these practices keep going on. Want price controls, real industrial-strength ones? Want lots and lots of marketing restrictions? Want the FDA to raise the bar for approval to levels never before seen? Want flocks of lawyers beating their wings, circling around our every move? Just keep it up, just keep this stuff up. We’ll get all that and more.
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April 1, 2008
Ezetimibe, known as Zetia and as the key component of Vytorin, was invented by friends and colleagues of mine. It was the first drug I ever saw discovered after I joined the drug industry. The initial discovery of the whole compound class happened around the corner from my lab, and the compound that became ezetimibe itself was synthesized down the hall. So, no, I’m not taking the current news about it very well. The situation is still quite confused, but there looks to have been enough stupidity, greed, and plain bad luck involved to make anyone despair. Read on – but I should warn you, I’m probably just going to get madder and madder as the post continues.
As anyone unfortunate enough to be holding Merck or Schering-Plough stock already knows, both companies took a pounding yesterday after the American College of Cardiology issued its recommendation on the use of Vytorin (ezetimibe / simvastatin). This call was based on the now-infamous ENHANCE trial, which was just published in the New England Journal of Medicine. The main points of the study had already come out in January, of course, but a closer look at the data has done nothing to help explain its results: no improvement over existing therapy. Addition of the cholesterol absorption inhibitor to the statin appears to have done nothing to help clear arteries (based on measurement of intima-media thickness) over what could be done with the statin alone. Ezetimibe seems to have had no bad effects, fortunately, but no good ones, either.
The ACC’s verdict is that Vytorin should only be used as a last resort, and that patients currently taking it should strongly consider going back to plain statin therapy. Based on these study results, that seems like a reasonable recommendation. There’s a large outcome trial (IMPROVE-IT) underway comparing the two treatments, but we’re not going to see results from that one for another three years at the earliest. Until then, there doesn’t seem to be any reason to recommend Vytorin. (There may not be any reason to recommend it afterwards, either, but we’ll have to wait to see about that). Fortunately for everyone involved, no one seems to have been harmed, outside of the insurance companies who have paid out for Vytorin for the last few years – they not doubt have their own views on the subject.
It’s important to remember that this result is indeed a surprise, since the combination definitely does do a better job at lowering LDL. (As an editorial in the NEJM puts it, this "dramatically contradicts our expectations"). You’d think that extra LDL reduction would be associated with a better outcome, but one of the panelists at the ACC, Dr. Harlan Krumholz, points out (PDF) that hormone therapy lowers LDL as a side effect, but isn’t associated in that case with better atherosclerosis outcomes, either. Does that mean that there’s more to the effect of statins than just lowering LDL, too? That possibility has to be taken seriously. The non-lipid effects of inhibiting HMGCoA reductase, the statin target, may be part of the answer, although the authors of the NEJM paper are reluctant to make that their whole explanation.
What they suggest instead is disturbing. The study may have been doomed from the start. The ENHANCE subjects were not taken from the general population, but rather were patients with a genetic abnormality in LDL handling, familial hypercholesterolemia. The idea was that these patients would be even more likely to show a benefit from Vytorin. But as the NEJM authors make clear, this may at one time have been a good patient population to show benefits in, but now the great majority of people with this condition are treated with statins starting at an early age. This, naturally, has an effect on their arterial walls. So the subjects of this trial may have already had a head start on reducing their arterial thickness, which means there may well have been a limit on what any particular therapy could have accomplished. Instead of being a better group to demonstrate your LDL-lowering powers in, they could well be worse.
If that’s true, there is, in fact, a chance that the IMPROVE-IT trial could show a clear benefit for Vytorin, since it’s being run in a broader population. (Just watch the confusion if that happens). But what will that mean? The results will be far too late to help Merck and Schering-Plough, and will be a clear disservice to the patients that could have benefited from the drug before then. ENHANCE would then turn out to have been a huge mistake.
But not content with that, the companies have managed to make it into a complete disaster. The controversy has been whether Merck and Schering-Plough sat on the results of the trial or spent extra time trying to find a way to make them look more appealing. This has drawn the attention of Sen. Charles Grassley and an investigative committee, which is the sort of thing that no company can wish for. Yesterday Grassley released some of the text of his letters to the management of both companies, and these include quotes from e-mails sent by John Kastelein, the lead investigator on ENHANCE. They do not look good, not by any stretch of the imagination:
” Is it correct that SP has decided not to present at AHA, but to await the two other, completely unvalidated, endpoints, which analysis is going to take us straight into 2008??!!??
If this is true, SP must have taken this decision without even the semblance of decency to consult me as PI of the study. I can tell you that if this is the case, our collaboration is over…This starts smelling like extending the publication for no other [than] political reasons and I cannot live with that.”
In another e-mail, Kastelein expresses more frustration that the results would not be presented at that AHA meeting (as indeed they weren’t, in the end), and says that ”. . . you will be seen as a company that tries to hide something and I will be perceived as being in bed with you!”
Schering-Plough, for its part, says that these statements are taken out of context, but good grief, what other context could that possibly be? Kastelein has also backed off, saying that he wasn’t accusing the company of “deliberately withholding data for political reasons”, but again, it’s hard to read those excerpts in any other way. These days, no one should make statements in e-mail that they’re not comfortable seeing printed in the Wall Street Journal, which is where I got these.
And does it need to be said that this is exactly, I mean exactly the kind of thing that the drug industry does not need? Vytorin as a drug is easy to forgive – the combination makes perfect sense, and the fact that it didn’t show a good result in ENHANCE took everyone by surprise. (And, as mentioned above, it may in the end turn out to be a good therapy in the end). But the marketing of Vytorin is perhaps another thing – the companies really made a huge aggressive push to get as much of the cholesterol-lowering market as they could. That’s no sin by itself, unless business is a sin, but if you’re going to push that hard, you’d better make sure that you’re standing on something firm.
This trial definitely wasn't that sort of foundation, and the fallout from it has been made much, much worse by its handling. It's distressing to me that the management at Merck and Schering-Plough would even take the chance, in this climate, of being seen as data-massaging study-burying slime. What words do I find if that's what they turn out to be?
Ezetimibe was (and is) a wonderful scientific story in the drug discovery labs, and its development is a testament to some very dedicated and persistent people. What a pity that it's all come to this.
+ TrackBacks (0) | Category: Cardiovascular Disease | Clinical Trials | Press Coverage | The Dark Side | Why Everyone Loves Us
March 21, 2008
I wanted to follow up on the post the other day about Pfizer's attempts to open up the editorial files in various scientific journals. The decision on the New England Journal of Medicine motion hasn't come down yet, but two others have.
And Pfizer's lost both of them. The district court in Chicago rejected the company's arguments to compel JAMA and the Archives of Internal Medicine to open up their records on papers concerning Celebrex or Bexxtra. The ruling held (correctly, in my opinion) that the possible value of these documents to Pfizer's case was more than outweighed by the harm that would be done to the journals by allowing access.
And as this story at the Science web site mentions, the NEJM case may well be about to go the same way. According to the journal's attorneys, Pfizer narrowed its request to just the peer-review comments returned to the authors of the manuscripts. That seems, at least to me, to weaken the argument that these documents are of such great value to their legal case, while leaving the problem of breaching confidential peer review.
At least I think it does - I assume that Pfizer wants names attached to these things, unless they can use them in their case without attribution. Even so, that still doesn't sound like something that'll make people enthusiastic about reviewing such papers - the prospect of having their comments read off in open court. No, I think that argument that sank Pfizer's requests in Illinois still obtains, and that the Massachusetts court will rule the same way.
So if this whole issue goes away, we can relax until the next legal inspiration hits. In the interim, I still think that Pfizer should at least be vaguely ashamed of having taken this road. A confidential poll of the company's own scientists would surely find that a solid majority of them would be opposed to the whole idea of legal discovery of peer review documents. (I say that because I've hardly talked to a single chemist or biologist who didn't think the same way). That said, there aren't many companies that size whose business decisions would all survive after polls among the scientific staff. . .
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March 19, 2008
One of the less appealing ways that companies have tried to fill their drug portfolios over the years has been to look through their current drugs in search of one with a main active metabolite. That altered structure then becomes a clinical candidate for the next generation. I’ve said bad things before about Clarinex (desloratadine), son of Claritin (loratadine), the most famous example of this practice. That “des” prefix tells you that the newer drug is just the older one minus some part of its structure, in this case, minus a carbamate group that the liver clips off anyway. Even non-chemists can see the change, looking at the top parts of the structures in those Wikipedia articles.
Now comes Pristiq (desvenlafaxine), spawn of Effexor (you guessed it, venlafaxine). This one's also a simple metabolic change, OH from O-methyl. Wyeth has done very well with Effexor over the last few years, and they’re not ready to give up on that market share once it goes off patent this year. The timing of this new drug is, as they say, no coincidence. The Carlat Psychiatry Blog, not a place to go to find lots of warm feelings for the drug industry, has its “Top Five Reasons to Forget About Pristiq”. From the way things look, I have to agree with them; at the moment it’s hard to see much need for the stuff.
But there’s a good point made there by an investigator on the clinical trials, Dr. Michael Liebowitz of Columbia. He, quite reasonably, is waiting for the market to settle whether the drug is of any use or not: “If it is useful, then it will make money for the company, and if it is not, it won’t.” Update: there's more from Liebowitz on this topic, and on follow-on CNS drugs in general.
Exactly. I’m very much in favor of letting drugs stand or fall on their merits, if any. My first guess is that Pristiq is not much of an addition to the pharmacopeia – and if it isn’t, Wyeth deserves to lose the money they’ve put into it, since that, frankly, would have been the presumption from very early in the drug’s development. They took this drug forward at their own risk, and should profit or lose by it accordingly.
One thing I’ll say for the company, though: they actually seem to be running a head-to-head study between the two drugs. That’s good to see, and it’ll be quite interesting to see what case Wyeth can make, if any, after the data come in. At least they’re not just banging on tin cans and shouting “Now with the great taste of fish!” or something. Interestingly, as a comment on the Carlat blog points out, the company has already published data on one unimpressive trial with Pristiq, and I have to thank them for doing that, too. If there was ever a head-to-head efficacy study run between Claritin and Clarinex, I definitely missed it – I’m willing to be corrected, of course, but I’m pretty sure that there never was one).
So one-and-a-half cheers for Wyeth. I wish, in most cases, that companies would avoid the metabolite-drug idea. Alternatively, I wish that everyone’s drug pipeline was well stocked enough that such follow-ups didn’t look financially appealing. But if you’re going to have them, taking an honest look at their benefits is the only way to go.
+ TrackBacks (0) | Category: "Me Too" Drugs | Drug Development | The Central Nervous System | Why Everyone Loves Us
March 18, 2008
Do drug discovery and drug marketing belong in the same company or not? That question’s been asked in several forms, but two MIT professors are taking it about as far as it can go. Stan Finkelstein and Peter Temin have a book coming out (“Reasonable Rx: Solving the Drug Price Crisis”) which proposes decoupling the two by force.
By analogy to the way the electrical power industry was divided into generation and distribution sectors, they propose splitting up the pharmaceutical business into drug discovery firms and drug marketing firms. But wait, there’s more: they also would like to have an “independent, public, non-profit Drug Development Corporation” formed to act as an intermediary between the two:
“It is a two-level program in which scientists and other experts would recommend to decision-makers which kinds of drugs to fund the most. This would insulate development decisions from the political winds," (Finkelstein) said.
The MIT press release also talks up the other putative benefits of this plan, such as how it would “insulate drug development from the blockbuster mentality, which drives companies to invest in discovering a billion-dollar drug to offset their costs”. There’s a lot to talk about in this idea, but here are some of my first impressions:
1. The electric power analogy is probably specious. Generating electricity is, for the most part, a sure thing. If you build a big coal-fired generating plant, which we most certainly know how to do, it will generate electricity for you. And its output will be proportional to how fast the turbines spin. Research is most profoundly different, as many executives from other industries have found to their sorrow. You can turn the crank like crazy and have hardly anything come out the other end at all – ask Pfizer – and that’s because we do not have a very clear idea of how to discover drugs.
Another problem is that electricity is fungible. The electric power coming from one plant is exactly the same as that coming from another, and can be pooled and distributed in exactly the same way. Every drug, however, is different. The electric power industry would be rather changed in appearance if some kilowatts were ten times as profitable as the others, but only for a few years after the generating plant came on line, or if particular kilowatts were only of benefit to certain homes or businesses and had to be routed there specifically.
2. Where are these experts, exactly? I have an instinctive distrust of plans that call for a board of dispassionate technocrats to step in and do things that the market is supposedly doing by itself. It’s not that such things absolutely can’t work, but my default belief is that they won’t work as well as their planners hope. Finkelstein and Termin’s “DDC” proposal is just the sort of thing I worry about. I can see establishing something to make sure that less immediately profitable diseases get R&D directed to them, but running the whole industry like an NIH grant review board sound like a recipe for disaster.
3. To some extent, the industry is already divided in the manner proposed. But it's not done through review boards, it's done through business dealings. Many small firms don't have the resources to develop their own drug candidates, so they shop them to larger firms who can handle the clinical, regulatory, and marketing aspects of the process. This goes on all the time. It's been proposed (many times) that one or more large companies might shut their own research down completely and serve as a clearinghouse for the smaller ones in just this way, but no one has been willing to take the plunge. My guess is that there aren't enough good ideas out there for sale to keep a company going without having some of its own research in the game; I feel sure that the numbers have been run on this idea more than once.
Of course, these deals are made on the basis of who will make money, rather than how much society will benefit. But you'd be surprised at how often those two can overlap.
Where do the costs go? I suppose I'll have to read the book to get the details, but I'm not sure how money is supposed to be saved here. The cost of developing drugs doesn't look like it'll be changed much, since Temin and Finkelstein aren't coming in with any insights into human biochemistry or any new ways for us to predict efficacy or side effects. Profits, however, would surely be reduced: the the DDC that they propose would seem to exist to recommend that less profitable drugs be developed, for the good of society, rather than the ones that companies believe that they can make the most money from.
I note that the press release makes much of climate change and globalization, probably because in many circles these days you can't be taken seriously unless you mention those somewhere. This is done in the context of tropical diseases possibly making inroads into the US and other industrialized countries. But if that were to happen, research on these diseases would become much more profitable - which I realize is a crude way of looking at it, but the market doesn't have to be pretty to work. And I think the process would be slow enough to fit the timelines for drug discovery as it's practiced today - an example would be the burst of work on avian influenza in the last few years. A sudden epidemic would be bad news indeed, and might well catch the industry flat-footed, but that's going to be hard to avoid under any drug development regime.
+ TrackBacks (0) | Category: Business and Markets | Drug Development | Drug Prices | Why Everyone Loves Us
March 13, 2008
Today (March 13) at 3 PM EST, there's a hearing scheduled on a legal motion that could change the way scientific results are published in this country. Pfizer is being sued over injuries that plaintiffs believe came from their use of Celebrex, one of the world’s only remaining Cox-2 inhibitor drugs. (I saw a Celebrex tv ad the other day, a surreal thing which was basically a lengthy recitation of FDA-mandated side effect language accompanied by jazzy graphics). Everyone with a Cox-2 compound is being sued from every direction, as a matter of course. The company is, naturally, casting around for any weapon that comes to hand for its defense, as did Merck when that same sky began to come down on them.
But Pfizer’s lawyers (DLA Piper LLP of Boston) are apparently (your choice, multiple answers permitted) more aggressive, more unscrupulous, or more clueless than Merck’s. Among the points at issue are several papers from the New England Journal of Medicine. According to the motion, which I paid to download from PACER, two of the particularly contentious ones are this one on complications after cardiac surgery and this one on cardiac risk during a colon cancer trial. So Pfizer has served the journal’s editors with a series of subpoenas. They’re seeking to open the files on these manuscripts – reviewer comments, reviewer names, editorial correspondence, rejected submissions, the lot. What are they hoping to find? Oh, who knows – whatever’s there: ”Scientific journals such as NEJM may have received manuscripts that contain exonerating data for Celebrex and Bextra which would be relevant for Pfizer's causation defense” say the lawyers. The journal refused to comply, so Pfizer has now filed a motion in district court in Massachusetts to compel them to open up.
What's particularly interesting is the the journal has, to some extent, already done so. According to Pfizer's "Motion to Compel", the editors "produced a sampling of forms identifying the names of manuscript authors and their financial disclosures, correspondence between NEJM editors and authors regarding suggested editorial changes and acceptance and rejection letters". The motion goes on to say, though, that the editors had the nerve to ignore the broader fishing expedition, only releasing documents for authors specifically named in the subpoenas, not "any and all" documents related to Celebrex or Bextra. They also withheld several documents under the umbrella of peer review and internal editoral processes. Thus, the request to open up the whole thing.
I’ve never heard of this maneuver before. Staff members of the NEJM gave depositions in the early phases of the Merck litigation, since the journal was in the middle of the Vioxx fighting. (They’d “expressed concern” several times about the studies that had appeared in their own pages and passed through their own review process). But even then, I don’t think that Merck wanted to open up the editorial files, and you’d think that if anyone had something to gain by it, they would.
Pfizer’s motion seems to me more like a SLAPP, combined with standard fishing expedition tactics. Their legal team doesn’t seem to think that any of this will be a problem, at least as far as you can tell from their public statements. They say in their motion that they don’t see any harm coming to the NEJM if they comply – heavens, why not? Reviewers will just line up to look over clinical trial publications if they think that their confidentiality can be breached in case of a lawsuit, won’t they? And the rest of the scientific publishing world could look for the same treatment, any time someone published data that might be relevant to someone’s court case, somewhere. Oh, joy.
Pfizer’s motion states that ” The public has no interest in protecting the editorial process of a scientific journal”. Now, it’s not like the peer review process is a sacred trust, but it’s the best we’ve been able to come up with so far. It reminds me of Churchill’s comment about democracy being the worst form of government until you look at the alternatives. I realize that it’s the place of trial lawyers and defense teams to scuffle around beating each other with whatever they can pick up, but I really don’t think that they should be allowed to break this particular piece of furniture.
And I can’t see how the current review process won’t get broken if Pfizer’s motion is granted. The whole issue is whether the journal's editors can claim privilege - if so, they don't have to release, and if not, they most certainly do. This can't help but set a precedent, one way or another. If there's no privilege involved in the editorial process, a lot of qualified and competent reviewers will start turning down any manuscript that might someday be involved in legal action. (Which, in the medical field, might be most of them). The public actually does have an interest in seeing that there is a feasible editorial process for scientific journals in general, and I hope that the judge rules accordingly.
In the meantime, for all my friends at Pfizer and for all the other scientists there with integrity and good sense: my condolences. Your company isn’t doing you any favors this week.
(One of the first mentions of all this was on the Wall Street Journal’s Health Blog. The comments that attach to it are quite interesting, dividing between the hands-off-peer-review crowd and a bunch of people who want to see the NEJM taken down a few pegs. I can sympathize with that impulse, but there has to be a better way to do it than this. And there’s more commentary from Donald Kennedy, editor of Science, here (you can pretty much guess what he thinks about this great idea).
+ TrackBacks (0) | Category: Cardiovascular Disease | The Scientific Literature | Toxicology | Why Everyone Loves Us
January 10, 2008
Imagine that if you wanted to buy a car, you had to first visit a car consultant. This would be an expert who would place your order with a car dealer, after first looking over your transportation needs, financial status, and other factors. No one would be able to order a car on their own. Advertisements for cars would look similar to the ones we have today, except there would be a phrase at the end to “Ask your car consultant”. Much more advertising and promotion, though, would be directed at the consultants themselves, as you’d figure. A steady stream of representatives from the various automakers would come by, extolling the virtues of the latest models and leaving stacks of glossy literature, DVDs, etc., along with offers of free trips to come by for some test-drives.
Let’s move the analogy over to something a bit more realistic: mortgages. Given the current subprime meltdown, it wouldn’t surprise me much if someone, somewhere, has called for the creation of a class of mortgage advisors. Anyone looking to borrow money for a real-estate transaction would be required to go through at least a cursory visit with one. The advisor would look over your finances, explain the different mortgage options out there, and make sure that you understood what you were getting into if you had a particular offer in mind. In fact, the advisor would do more than that – if you didn’t meet certain criteria, they would not put you in touch with a lender. Some advisors would be more lenient than others, but you’d have to see one, and have them sign off on your mortgage, before you could legally borrow money.
Ads for low interest rates and creative refinances would still be around, but they’d always end with an urgent request to call your mortgage advisor immediately, before the great deal evaporated. And the bulk of the promotion money would, again, surely find it way to trying to influence the mortgage advisors themselves. Lenders would come in with figures showing how few people had defaulted with them, what percentage of the loans in a given market they underwrote, and so on. As gatekeepers in an important industry, they’d be much in demand.
Of course, in the world we live in, we trust adult consumers to be able to make decisions about which car to buy. The car companies lose no opportunity to try to make people think about the advantages of a new car, both emotional and tangible, and to suggest that it would be easy to purchase one. The car dealers themselves stress the same points, and add more details about how easy they are to deal with. People do get into bad leases or buy more car than they can really afford, but that’s considered largely the customer’s problem.
And (for now, anyway) we trust adult consumers to be able to decide for themselves if they’re ready to buy a house, which houses they might be interested in purchasing, and how they might wish to do so. This is a harder decision, since it involves a much greater commitment of time and money than purchasing a car, and there are many more options available. The existence of real estate agents and attorneys show that more people feel the need for and are (more or less) willing to pay for outside assistance in buying or selling the property itself, but there are as yet no licensed mortgage agents of the kind I describe above. That’s typically left up to the customer.
So we finally come to prescription drugs. Medical care is even more complicated than real estate – you can obtain licenses to sell properties or mortgages far more easily and with far less schooling than you need to obtain one to practice medicine, and that’s a good thing. You also cannot obtain new medicines, or any drugs for major diseases, without seeing a doctor first, both to make sure of the disease and to advise on its treatment. Consumers – and by this time, we use the word “patients” – are free to follow or not follow this advice, or to shop around until they find a doctor whose opinions they like better (if any), but they are not free to purchase and dose themselves (or others) with prescription drugs.
The difference is, as anyone will tell you, that health is an intensely personal category unto itself. A person’s health affects every aspect of their life, immediately and continuously, in a way that not even the roof over their heads can. Medical issues are unavoidably saturated with thoughts (and fears) of death or grave disability, and always have been. This has receded in places as medical science has reduced the incidence of some causes of death, but overall, this emotional entanglement is very much with us, and will be for a very long time. Look closely, and you’ll see it: as mentioned above, we have a whole special word for “customer of a physician”, because we don’t usually think of the relationship in business terms. “Patient” connotes someone who is in the care of someone else, whose fate rests partly or wholly in another’s hands.
The unusual quality of a medical transaction is understandable for another reason as well, since traditionally the course of a physical ailment has been uncertain, and the ability of medicine to do anything about it has been likewise in doubt. For most of human history, seeing a doctor has been very much like seeing a priest. It has not been looked at as a business interaction, and in most cases it had no hope of ever being one in the usual sense. (See Lewis Thomas’s The Youngest Science for more on that – he points out that almost everything his physician father prescribed in his day was a placebo of one kind or another).
The personal and emotional importance of disease (and of treatment) leads to behavior that is seen less often in other activities. People will spend terrifying amounts of their own money in the hopes of helping themselves or close family members, even in cases where the probability of success is tiny. Huge sums are spent in this country on people who are clearly near death. A person who would never dream of taking their savings to the racetrack and betting it all on a 50-to-1 longshot horse will take the same amount and put it down, with hardly a second thought, on a 500-to-1 chance of a successful medical treatment. This changed attitude extends further: medical personnel are often paid well for their efforts, but they can also give a great deal of themselves in the process, since lives are at stake. There’s an urgency, a justifiable sense of importance, which is hard for people in other professions to feel as often or as intensely.
So medicine, will probably always be special – at least, I don’t see that changing in the lifetime of anyone reading this. That complicates things, though, because (like it or not) money is involved. How could it not be? In fact, I’d say that this is one of the most obvious grinding points of friction between the worlds of private emotion and of commerce. Many people find the whole idea of medicine for profit unappealing and somehow unseemly. Since this is an area where altruism is more common (and more easily recognized) than usual, the contrast between selfless sacrifice and self-interested capitalism is especially disconcerting.
But the value people place on effective medical care, and the difficulties of discovering and providing it, ensures that large amounts of money will always be involved. Medical care works better than it used to, and it has reached that state through vast efforts, which deserve to be compensated. It’s true that when money changes hands, it can be an evil sign, as with charlatans cynically exploiting desperate people with snake-oil cancer treatments and the like. But it doesn’t have to be. We all work for a living; money does not have to stain everything it touches. Physicians deserve to be compensated for their work, proportional to its value and difficulty, and to their skills in performing it. And drug companies should be compensated for their efforts in discovering new drugs, also according to their value.
Not even the harshest critic of the industry would balk at that last statement, but that because we haven’t come down to numbers yet. If you believe that virtually all the work of drug discovery is done through federal funding, with the drug industry stepping in at the end to decide on the price and the packaging, then you will feel that this compensation should be rather minimal. (If you think that, you’re mistaken, but that’s another topic).
How, then, to decide how much a given drug therapy is worth? Any economist will tell you that the price of some good is, finally, what people are willing to pay for it. This principle works silently, for the most part, until someone offers to resell tickets for the big game for five times what they paid for them, or when the price of lumber and gasoline goes up after a hurricane comes through. At such points it stops seeming so reasonable to many observers (although nothing has changed, in terms of supply and demand). It also stops looking so reasonable to many people in the case of pharmaceuticals, but under completely normal conditions – no hurricane is necessary.
My industry realizes this (any fool realizes this). But it’s never known quite what to do about it. Pointing out that drug discovery is expensive has been a traditional argument, and it’s one that I’ve made myself. But that doesn’t address the underlying reasons for the uneasiness. Paying money for health care does not descend to the same mental category as paying money for car repairs just because someone has tried to make a case for the accounting involved. People don’t believe the numbers, anyway, but even the most believable numbers in the world would not do the trick.
Pointing out that these are, in some cases, life-saving therapies (important things, worth the price) is another tactic. That has a better chance of working, because it gets closer to the psychological core of the problem, but in the end it’s not effective, either. The more important, the more involved with matters of life and death something appears to be, the more uneasy people feel about paying market prices. The industry, if it stresses the power and efficacy of its drugs, risks looking like someone charging rent for the use of a fire hydrant.
And another tactic is to put a personal face on things – to show testimonials from people whose lives have been saved, or from researchers working hard to come up with new treatments. This also has a better chance of addressing the psychology of the problem, but also risks heightening the conflict between matters of emotion and matters of commerce. These appeals are a bid for sympathy, on at least one level, which means that they really can’t talk about money. That connection has to be made later, and the mixture is as incompatible as ever.
This is where I should come right out and say that I don’t have a solution to this problem. But I think that it’s worthwhile to consider why it exists, and where (to my mind) it’s coming from.
+ TrackBacks (0) | Category: Business and Markets | Drug Prices | Why Everyone Loves Us
January 6, 2008
Well, it's the first full working week of the year, so let's dive right into some controversy. There's an article on PloS Medicine on the amount that the drug industry spends on marketing. They at least try to avoid the problem of mixed administrative and marketing expenses, but the authors come up higher than the other estimates that have been arrived at. That's because they take the varying figures from the two major sources and decide to take the larger figure every time the two disagree.
The final tally? About $57.5 billion spent in 2004. Most of that is in detailing to physicians and the cost of free samples. Direct-to-consumer ads, although they get a lot of attention and collect a lot of flak, account for only 7% of the total. The authors lose no opportunity to point out that this figure is not only larger than the industry's own statements, but is just shy of twice the estimated industrial R&D expenditures for that year. And, of course:
". . .These numbers clearly show how promotion predominates over R&D in the pharmaceutical industry, contrary to the industry's claim. . .it confirms the public image of a marketing-driven industry and provides an important argument to petition in favor of transforming the workings of the industry in the direction of more research and less promotion."
Well, we do spend a lot on marketing, that's for sure. US pharmaceutical sales in 2004 were about $235 billion. If these latest figures are correct, then promotion was about 24% of sales. I don't know how that compares to other industries, but it wouldn't surprise me if it ran high. Several things lead to that - the drug industry is quite fragmented, for one thing, with even the largest companies having a fairly small market share. And patent terms mean that the bulk of the profits on new drugs have to be earned back relatively quickly before they go generic. The distribution channels in the prescription drug business lead to a concentration on the gatekeepers (physicians) as well.
But the authors of this paper have missed an important concept. As I've pointed out here before, the idea of spending money on marketing is that it brings in more money in return. If it didn't, why bother? Marketing campaigns are supposed to pay for themselves, and more besides. That doesn't always work, of course - Prizer sure didn't make back the money spent promoting Exubera - but the failures are made up for by the successes, or at least they'd better be.
So it's not like we have this huge pile of money (X) and choose to divide it up so that we spend 0.65X buying ads and 0.35X on research. Those ads are responsible for the size of the pile in the first place. If they didn't exist, X would be smaller. If the advertising is working, that whole 0.65X is being paid for by increased sales: why on earth would you spend more on advertising than you make in return for it, year after year? And some of that 0.35X comes from those increased sales, too: why on earth would you spend that huge amount on advertising and get only that same amount back in revenues, year after year?
No, as far as I can see, most of the "why don't you spend some of that money on research" question is founded on a misconception. It breaks down when you look at where "that money" comes from. I freely admit that it's not an aesthetically pleasing state of affairs. And maybe that's the root of the problem.
My industry would apparently prefer not to put it in such crude terms, but drug research involves money, and plenty of it. Advertising brings in more money, which is why it exists. The nature of our industry probably allows a higher profitable level of advertising, which is why we do so much of it. My industry may, in the long run, be doing itself no favors by avoiding this topic and encouraging the saintly-white-coated-researcher picture instead. We do help sick people, and we are glad of that (and I do have a white lab coat hanging in my lab across the hall). But helping sick people by discovering new drugs takes big piles of cash. That's how the world is.
+ TrackBacks (0) | Category: Business and Markets | Drug Prices | Why Everyone Loves Us
September 17, 2007
As I was mentioning the other day, the latest issue of Nature Medicine has the details on a story that doesn’t, on the face of it, do the industry any credit. About twenty years ago, there were reports out of China that a solublized form of arsenic was very effective in treating acute promyelocytic leukemia, a rare (and fatal) form of the disease. Arsenic had been used as a folk remedy for such conditions, as it has been for many others (often with much less justification!), but its most common compounds (like arsenic trioxide) are tremendously insoluble. The Chinese authors had found a way to make that one go into solution where it could be dosed, but didn’t disclose it in their publication.
That left the door open to someone else, namely a small company called PolaRx. They found a way to do the same thing with the oxide (as far as anyone can tell), and got a patent on its use in oncology. Over years, mergers, and reshuffles, the patent finally ended up in the hands of Cephalon, who now market the soluble arsenic trioxide. However, a course of treatment costs about $50,000, which means that for many patients around the world, the drug is totally out of reach.
Even across the entire world, there aren’t that many patients for this therapy, so the price would tend to be high no matter what. It’s worth remembering that production costs are not a major factor in the pricing of most drugs. We’re not indifferent in this business to how much it costs us to make something, far from it, but we try to keep that a small part of the price. So what does set the price? What sets the price is what sets most prices in this world: what the market will bear. A drug that only treats a small number of patients every year is going to cost a lot of money, no matter what it’s made out of. A company will not market a compound unless they can use its profits to help defray the costs of all the things that don’t make it to market at all.
Cephalon is charging what their market will bear, which is their right, but their market is the health insurance organizations of the industrialized world. That’s another thing to remember – drug companies aren’t selling direct to patients most of the time. They’re selling to insurance companies, and first-world health insurance will put up with a lot of things that no one else can or will. There’s a lot of room to talk (and to complain) about this (I think it distorts pricing signals something fierce), but all the complaints have to start with the realization that this is how things are now set up. Cephalon, for its part, says that it’s open to compassionate use of its drug – that is, providing it to people in need who absolutely cannot afford it. With any luck articles like the Nature Medicine one will help to get the word out about that, and we’ll see how well they follow through.
It’s tempting to blame the patent system for this whole situation – after all, the only reason the company can charge these prices is that they’re the only ones who can sell it, right? But perversely, this might actually show the need for more use of patents rather than less. As another piece in Nature has helpfully reminded people, patents not only grant a period of exclusivity. In return for that, you have to tell people how to replicate your invention.
The alternative, in countries that don’t follow this system, is usually secrecy, and I can’t help but think that this is why the original Chinese work didn’t disclose all the details. A strong patent system eliminates a lot of trade-secret grey areas: someone owns a discovery (for a predetermined period of time), no one owns it, or everyone owns it. There’s none of this “someone owns it until someone else finds out about it” stuff.
But my guess is that the Chinese lab, being used to a trade-secret (or government-secret) culture, reflexively held back their important details. If they wanted to make sure that no one could patent anything, they would have (or at least should have) put all the information out into the public domain, where it would have been prior art against anyone attempting to file on it. (But see below - would that have helped get it through clinical trials, or not?) It’s worth noting that if a patent had been filed back in the early 1990s, the drug would not only have come to the world’s markets faster, the patent would also be much closer to expiration by now, opening up its production. The US researcher who formed PolaRx and filed the patent, Raymond Warrell (now chairman of Genta), stands up for it in the Nature Medicine article, and like it or not, he has a point, too, saying that the patent stimulated interest in the compound: "Without the patent, it would have remained a curious Chinese drug, not available to anyone else." I should note that there may well be room to argue about the validity of the patent, from prior-art concerns, but no one (as far as I know) has seen fit to challenge it.
But I can say for sure that without intellectual property protection in the US and Europe, no drug company would have touched the compound. Without industrial input, the drug would have either never reached the market at all (arsenic trials were a hard sell at the FDA), or would have likely come on more slowly. (That ticking patent clock does keep an organization moving, I can tell you). And now its success in the market has other companies working on improved versions of the therapy. This is how our world works, and (for better or worse) there's no requirement that it be aesthetically appealing.
+ TrackBacks (0) | Category: Cancer | Drug Development | Odd Elements in Drugs | Patents and IP | Why Everyone Loves Us
July 31, 2007
Here's a little night-time journey through Genentech's Vacaville manufacturing site, through the eyes of someone who has no idea of what he's seeing. The problem is, he doesn't know that - he and his friend think that they have it all figured out:
"On the one hand this place makes drugs that save people's lives -- treatments for cancers and cystic fibrosis and asthma," she told me. "Heading out," I told her, as the construction worker walked across the campus towards the gate.
"And yet, on the other hand, this place is pure evil." We walked past large vats labeled "Poison" and huge machines that looked like they could crush us. Smoke belched from the top of the building and we could see more buildings and a parking lot in the distance.
"Companies like this are made up of dozens of people, each of whom, individually, are the sweetest guys. Nice, friendly people who just care about doing well at their work." As we approached the buildings, we saw that even now -- 2AM -- the place was alive. New cars were pulling into the lot and men and women were walking from building to building. The yellowed light on their white lab coats gave the whole thing a sinister air.
"And yet, together, they manage to pull off the most incomprehensible evils. . ."
Well, incomprehensible to Aaron Swartz and his friend, anyway. The essay is written as a feeble imitation of Hunter Thompson's "Fear and Loathing in Las Vegas
Swartz presents himself through the whole piece as a passive, puzzled observer. It all just seems too much for him - equipment he doesn't recognize, people doing things he doesn't understand for reasons that he can't quite work out. The Genentech scientist in the piece comes across as a much more human figure, although there's some attempt to make him a figure of fun. Which reminds me - if anyone out there works at the Vacaville site, or knows someone who does, I'd be interested in hearing from anyone who witnessed this tiny adventure from another perspective).
Aaron Swartz, by the way, was one of the early people behind the social media site Reddit, which is intermittently interesting. These days, though, it's more often a swamp of delusional conspiracy groupthink. If it were your only news source, you'd likely be convinced that (among many other unusual things) storm troopers were sweeping the streets, rounding up supporters of Ron Paul. Or, perhaps, that Genentech was run by creatures out of H. P. Lovecraft.
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July 9, 2007
One of the stories I missed while on hiatus has been Roche's recall of antiretroviral Viracept (nelfinavir) tablets. As readers may know, a problem with many batches of the drug became known in June. It's a mesylate (aka methanesulfonate) salt, but some of the tablets turned out to have ethyl mesylate in them as well, which is definitely sonething I'd go out of my way to avoid ingesting. A worldwide recall (except for North America, which is on a different supply chain) has been the result.
Methanesulfonate is a very happy anion, which is one of the reasons why methanesulfonic acid is used to make salts of basic drugs. The ions of these formulations tend to not be too tightly bound or paired, making the salt forms generally easier to dissolve. (The stronger the interactions between the ions, the harder it is for water to break up the party and dissolve them). But the contentedness of the sulfonate anion makes it a good leaving group when it's part of a covalent molecule. It would rather be off floating around with a negative charge on it again than be tied up in a regular bond, so sulfonate esters and the like tend to be pretty reactive.
Alkyl mesylate esters, then, are also pretty toxic. Just how toxic is the question, though. The stuff will react with nucleophiles wherever it finds them, and if that's some protein on the surface of a soon-to-be-shed epithelial cell, then no harm done. But there are many other situations that won't work out so well, going all the way up to DNA damage.
So how did this nasty stuff get in there in the first place? When I heard about the contaminant, my first thought was that someone had been washing out the reactors where the salt was formed with ethanol, and that appears to be exactly the case. Alcohol plus free acid under strong acid catalysis will give you ester, in what's literally one of the oldest reactions in the book. Roche appears to have been able to keep the contaminant down below regulatory levels normally, but someone's mind has been wandering over in Switzerland. In consequence, the fearsome Swiss reputation for purity and consistency takes a torpedo below the water line.
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June 3, 2007
Today's New York Times had a long front-page story from Janet Roberts and the paper's Scourge of the Drug Industry, Gardiner Harris. Titled "After Sanctions, Doctors Get Drug Company Pay", it details (through the example of one particular Minnesota psychiatrist) a practice of physicians who have had medical board problems continuing to get money for participating in clinical studies.
Dr. Faruk Abuzzahab has definitely had his run-ins with the medical authorities. And over the years he's also definitely had payments from various companies. It's not a story to make you feel warm and fuzzy, that's for sure. There are some things about it that puzzle me, though. For one thing, it appears that Abuzzahab is no bargain as a clinical investigator:
"Separately, the F.D.A. in 1979 and 1984 concluded that Dr. Abuzzahab had violated the protocols of every study he led that they audited, and reported inaccurate data to drug makers. He routinely oversaw four to eight drug trials simultaneously, often moved patients from one study to another, sometimes gave experimental medicines to patients at their first consultation, and once hospitalized a patient for the sole purpose of enrolling him in a study, the F.D.A. found. . .
A simple Google search reveals Dr. Abuzzahab’s 1998 medical board disciplinary file, which was reported at the time by a local newspaper and a TV station. In 1998, The Boston Globe featured Dr. Abuzzahab in a front-page article questioning the safety of psychiatric drug experiments. And in 1999, the NBC program “Dateline” did a segment about a woman who committed suicide while in a drug experiment he supervised.
In June 2006, the medical board criticized Dr. Abuzzahab, this time for writing narcotics prescriptions for patients he knew were using false names, a violation of federal narcotics laws.
Despite all this, drug makers continued to hire him. Dr. Abuzzahab’s résumé lists 11 publications or research presentations since 2000, when the medical board lifted its restrictions on his license."
Well, I haven't seen the guy's résumé, but a PubMed search shows only one paper since that year, and only one other since 1983. His publication record thins out drastically after the early 1980s; this is not someone who cares about blazing across the sky of the scientific literature.
What exactly does he care about, though? Money? According to the graphic that accompanies the story, Abuzzahab received $55,000 from several drug companies over an eleven-year period. That's better than a kick in the ankle, but it doesn't seem like enough cash to turn a busy psychiatrist's head, either. I've not had the opportunity to find out if I can be bought or not, fortunately, but I can tell you this: it would take more than five grand a year to do it.
And just what is it that GSK, Wyeth, J&J and the other companies who've paid him are hoping to get? The first thought is that they're hoping to influence his prescribing habits, because it doesn't sound as if the clinical data he's generating are worth all that much. Is that amount of money enough to do it? Presentations by a well-known and well-respected figure could also be expected to influence the scrip-writing of others, but Dr. Abuzzahab doesn't seem, in recent years, to have been that kind of person.
No, this sort of thing doesn't look good at all. The Times story gives a reader the impression that companies are disproportionately funding physicians with disciplinary problems, although there's no evidence to back that up. But the funding should be disproportionate in the other direction, which doesn't seem to be the case. Not good, not good at all.
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May 25, 2007
Insider, author of the Pharmagossip site, sent along this link to an article on Avandia at the Health Care Renewal site, flagged as "essential reading". After looking it over, I don't think I agree, and I thought it might be worthwhile to explain why.
The HCR piece quotes extensively from this New York Times article, headlined "Years Ago, Agency Was Warned of a Drug's Risks". Its focus is a letter that Dr. John Buse of UNC (now president-elect of the American Diabetes Association) sent to the FDA in 2000 on the possible cardiovascular risks of Avandia. Reading HCR's summary is a somewhat different experience than reading the original article, though - for one thing, you miss out on the part about how even now Dr. Buse isn't calling for Avandia to be be taken off the market. Rather than finding the Nissen New England Journal of Medicine paper to be the smoking gun he's been waiting for, he advocates waiting for the GSK cardiovascular risk study to be completed before making any decisions.
The HCR article has some good points in it, but to my ear they're phrased oddly. For example, it advocates a skeptical attitude toward the marketing claims made by drug companies, which is very good advice. But that's very good advice for evaluating the marketing claims of companies in every other industry, too. They're trying to sell you something. They will present their product in the most favorable light possible, whether that product is a car, a diabetes drug, or a burrito.
And that's the part that drives some people crazy, because it seems wrong to have potential life-saving drugs handled the same way as pickup trucks and enchiladas. They're not, though: the reason we can argue about drug company marketing is that drugs already have something that almost no other product has, which is a body of statistically valid comparison data. No data exist as to the long-term advantages and disadvantages of consuming a given brand of burrito versus its competition or versus an alternative meal. Cars are somewhat more data-rich, thanks to government and insurance company testing, and frequency-of-repair databases like those kept by Consumer Reports. But that's about the highest standard for comparison data outside of the drug industry, and you'll look in vain for P values and other tests of statistical significance, because there aren't any. In short, marketing claims in virtually every other industry can go relatively unchallenged, because there's little to measure them against.
So, that's why one of the things that I dislike about the Health Care Renewal piece is the hand-rubbing now-we've-got-'em tone that I detect in it. You don't have to go far to find it from plenty of other sources, either, which is why people like me are perhaps too touchy on the subject.
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April 11, 2007
Amgen's not getting a lot of good press these days. They're famously the House that EPO built, but (in a familiar story) they may have pressed their lead franchise too far. An excellent backgrounder can be found here at Nature Biotechnology. In short, the company was coining money in the renal market, and looked for new areas where EPO could be of use (and of profit). Chemotherapy-induced anemia looked like a winner, and Amgen aggressively promoted EPO's use in oncology. (Correction - the real extension was into cancer-associated anemia, not just that induced by chemotherapy. See the comments for more - DBL). But (as the editorial details), this whole strategy is backfiring disastrously.
First off, anemia doesn't appear to be a major cause of chemotherapy side effects. If that weren't bad enough, a series of clinical trials have shown that patients receiving standard therapy plus EPO do worse than usual. As of last month, all forms of EPO now have a new black-box label warning. Not ugly enough yet? OK, the company has admitted that it knew about some of this data but didn't talk about it for months. The SEC is investigating them for that decision, and Medicare is looking at whether the company has been overcharging. Their CFO just announced that he's "pursuing other interests".
A sample of the Nature B. editorial makes its point well:
"Amgen does not come out of this well. Although seeking new indications for existing medicines is clearly a valid strategy, the company appears to have miscalculated the balance between expansion and the risks to its existing business—and potentially opened itself to charges that it has recklessly endangered patients' lives. . .
Furthermore, Amgen has surely miscalculated strategically. Any benefits from the commercial push to extend Aranesp into new oncology markets are likely to bring relatively modest returns—Aranesp's 2006 sales in cancer-associated anemia, for example, were approx. $500 million. But the repercussions of failure will be felt not only in cancer but also potentially across all EPO markets. A proportion of the whole $7.1 billion Epogen and Aranesp franchise—nearly 50% of Amgen's total revenue in 2006—is thus under threat."
Amgen isn't the first drug company to have over-reached. Everyone's going to try to make the most of their existing drugs, especially when there aren't all that many things coming along to replace them. But readers with some classical background may well think of Croesus crossing the Halys every time they hear about this kind of thing. . .
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March 22, 2007
Jim Hu has a good post on some proposed new FDA rules for its advisory panel members. Some sort of changes have been coming for a while now - here's an op-ed that I wrote on the subject back in 2005. I argued that many of the best scientists and clinicians in a given field already work with the industry (which isn't such a bad thing when you think about it), and that restrictive requirements for serving on advisory panels could do more harm than good.
Well, here's the new proposal: the cutoff is $50,000 in the previous 12 months. At that or above, you won't be allowed on the panel. Between $1 (presumably) and $50,000, you can sit on the panel, but won't be allowed to vote. My guess is that that's going to have a pretty big impact if it goes through, and that we're going to see some very different committee rosters.
Or, of course, maybe we're going to see some new forms of relationships between drug companies and their consultants. That's what happens whenever efforts are made to regulate money in the political world, and it wouldn't surprise me a bit here. There are two ways to look at this: if you're suspicious of the FDA's motives (like, say, Rep. Maurice Hinchley of New York, who has a bill mandating these changes and more coming along), then you'll probably see the whole process as a form of organized bribery, wheel-greasing to get defective drugs past the regulatory authorities. Another way to look at it, though, is that outside experts have something that the drug companies need (expertise, and more importantly, expertise from another point of view than the one from inside the company), and that they're willing to pay for it. This may seem odd, but these consultants don't always tell us what we want to hear.
The tough part is when a drug is on the edge of getting approved or not - it has some good points, some bad ones, and the decision could go either way. That's when suspicions are raised that an extra $50,000 here and there is what tipped things over to approval. I don't see that happening, myself (although readers are invited to submit counterexamples). Many approvals can be honestly argued either way, because these medical questions are inherently one big grey area.
The media reaction to this story is rather more toward the former point of view, though. The Washington Post's take on the story is that ". . .the new guidelines implicitly acknowledge what critics have long said -- that it is possible to find enough qualified experts who do not have ties to drug and device manufacturers." And Gardiner Harris in the New York Times gives one sentence to someone at the American Enterprise Institute, while leaving plenty of space for words from Rep. Hinchley and my own representative, Rosa DeLauro, both of whom are good places to go for "corporate poisoners" quotes.
Well, this is the first act of a rather long session of political theatre. There are 60 days of public comment on this proposal, then more wrangling comes along after that. Then there are the bills in the House, which if things go on long enough will get thrown into the next election cycle, and on it goes. It's worth watching, but be ready for a protracted show.
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December 14, 2006
Glenn Reynolds gave the pharma industry a much-appreciated thank-you card over at Instapundit:
Only a moron would want to live in a society where people are ashamed to work for drug companies. And yet, I'm not surprised to see that resulting from the demagogy that abounds among politicians and "public interest" types who are not serving the public interest whatsoever.
I'm thinking of having that first sentence engraved on something expensive. Glenn's post prompted Dean Esmay to write a short post on the ethics of drug companies, though, and he's rather less positive. I suppose I shouldn't be surprised, given some of the things he's gone in for in the past. As usual, some of the problem is the difficulty that people have coming to terms with the fact that drug discovery is a for-profit industry.
One comment on his post came from Jerry Kindall, which is mostly favorable to the industry, but nonetheless contains this paragraph:
Drug discovery used to be a total crap-shoot but it's getting more and more targeted as the years go by thanks to ever more sophisticated computer modeling. They are now able to say "okay, this is the chemical receptor that we think we need to address, let's design a molecule that fits into it." This is essentially a nanotechnology, although not the type most people think of when they hear the term.
Ay, would that it were true. As my industry readers know, and as I've been ranting abouit here fairly often, drug discovery is just as much of a crap-shoot as it's ever been. And wouldn't it be great if "sophisticated computer modeling" helped that much? Instead, we get things like this. No, I think what's happening here is that we're being underestimated by our enemies and overestimated by our friends. . .
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June 14, 2006
When I meet people with no particular scientific background and they find out what I do for a living, it seems that there are several things that they're usually surprised about. For one thing, many people seem to think that doctors discover new drugs. Some of them don't even think about the drug companies or their role - and if they do, they imagine a lot of doctors working there. Actually, as my readers in the industry can confirm, the only time that physicians really get involved is when the drug is headed into the clinic and dosing in humans. There's not an M.D. in sight while we're validating drug targets, screening compounds, and working to fix their selectivity and activity. (And there's that noisy subset that think that all drugs are discovered in NIH-funded academic labs, but we'll leave that one alone for now).
Another surprise is when people find out that I've been doing this since 1989 without getting any drug on the market. I think that some folks are just being polite when I tell that that this isn't unusual, thinking to themselves that I must be some kind of hack. But the general public has, as far as I've been able to see, a very exaggerated idea of how quick and easy it is to find a drug. When I say that if I found a wonderful new compound tomorrow that it might be on the market in about 2015, they think I'm delusional. I wish I were.
There are others. I've met people who didn't realize that patents ran out eventually, that we don't find all our drugs by computer modeling, and that we always have to run clinical trials before we can sell something new. I have to think that the industry would be in better shape if people understood what drug discovery is like. I appreciate that various ads that companies have run over the years, but it's clear that most people mentally tune them out immediately. What's unclear is how this could be fixed, because I don't see how more advertising is going to do the trick.
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April 18, 2006
Looking back through the archives, I see that two or three years ago I spent a lot more time than I do now on the issues of drug reimportation and the industry's ability (or lack of it) to deal with Congress. I haven't written about these topics for a while, and by golly, there's a reason:
"After years of pumping millions of dollars into election campaigns, the pharmaceutical industry is reaping the benefits of a vastly improved political climate on Capitol Hill.
The increases in donations have moderated since the last decade as the industry has won passage of long-cherished legislative objectives or fended off challenges that it deemed a threat to its way of doing business.
In the last year, drug companies have won protection from lawsuits involving production of a pandemic flu vaccine. They have been invited to join President Bush in mapping a government strategy to fight a pandemic and have been sought out to assist in producing vaccines against flu and bioterrorism.
At the same time, legislative measures aimed at the industry - notably, bills that would permit importing cheaper prescription drugs from abroad - appear stalled, with little likelihood they will come up soon. . ."
The article goes on to say that the 2004 increases in drug prices (8.4%) were the lowest since 1982, a fact that seems to have been very slightly underreported. It also makes much of the passage of the Medicare drug benefit, which is something that I'm still quite ambivalent on. The provision which prohibits selection based on price worries me, since I'd rather have pricing signals than not. Of course, the flip side of that is that negotiating with Medicare would be a real Godzilla-versus-Megalon situation, and I worry that allowing the program to negotiate prices on individual drugs would be a backdoor route to general price controls. A middle ground would be allowing price discrimination between drugs in the same therapeutic category - just like private insurance does.
On the larger scale, part of this easing of the pressure on the drug industry is probably just other issues (Iraq, energy prices) coming along to take up the slack. Political outrage obeys conservation laws just like anything else. Somehow, I don't think it's safe to put the clip-on horns back in the costume box just yet.
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February 8, 2006
I haven't said anything about the recent film "The Constant Gardener". Truth be told, I had no desire to call any more attention to it. True to John le Carre's source novel, the story involves a brutal, corrupt international pharmaceutical conspiracy, which destroys the lives of poor Africans and kills critics who get in its way. As someone who's worked in the industry, I found that pretty hard to take. The dress code at the drug companies doesn't mandate white robes, but they sure aren't any blacker than the ones for any other business.
I see, though, that Jean-Pierre Garnier of GSK finally was moved to say a few words about the film. (And no, he didn't call it the feel-good popcorn flick of the year). He wasn't as harsh as I would have been:
"None of the scenario elements and plots in this movie have any relation to reality. . .It is a nice piece of fiction, let's enjoy it. It's entertainment, but it's not what we are all about."
I can't imagine that he found it very entertaining. It's hard to enjoy yourself when you've just paid money to see the way you earn your living depicted as evil and destructive. Positive reviews of the film have mostly either ignored its politics (and concentrated on the Acting) or praised it for its "mature" "socially conscious" approach to teaching us all our lessons. Spare me.
I believe that it was Ben Stein who once said that only in Hollywood could you have a setup of a murdered drug dealer in a dangerous neighborhood, with the villian turning out to be a wealthy businessman from the suburbs. Portraying an industry, which is actually saving and trying to save millions of people from suffering, as an assortment of amoral killers is the same formula. It's isn't new, and it isn't shocking. It isn't brave, and it isn't true.
(Note: if you're a subscriber the The Atlantic Monthly, this column by Clive Crook on the depiction of capitalism in the movies is worth a look).
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July 21, 2005
So, you're wondering, no doubt, if steely-eyed drug discoverers, those hardy scientific pioneers, are perhaps just the tiniest bit embarrassed when their company issues a press-release like this one?
"Schering-Plough Plans Tutti-Frutti Clarinex", runs the headline. And the answer is, yes, the research divisions generally cringe at the sight of such marketing brainstorms. That's partly because these line extensions always seem a little beneath everyone's dignity ("Now with the great taste of fish!") And it's partly because the drug discovery folks realize that if they'd come up with more new things for Marketing to sell, their companies wouldn't be reduced to this kind of thing.
The devil does indeed find work for idle hands. And those hands are capable of most anything, even. . .tutti-frutti Clarinex.
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November 2, 2004
I assume that anyone reading this blog today must be looking for something else besides election news or leaked exit poll numbers. How about some drug industry stuff? That I have, but it isn't good. Monday's Wall Street Journal brought a disturbing story about some leaked e-mails and internal memos from Merck and its troubles with Vioxx.
This piece, by Anna Wilde Matthews and Barbara Martinez, led to Merck's stock taking a terrible beating in today's trading, and it's pretty damned easy to see why. If these items are correct, and I've no reason to think that they aren't, Merck is in even bigger trouble than I thought. And believe me, that's really saying something.
It appears that prominent people inside the company not only thought early on that Vioxx had cardiovascular liabilities, but then did everything they could to divert attention and keep the drug on the market for as long as possible. Says the Journal story:
A Merck internal marketing document reviewed by The Wall Street Journal, addressed to "all field personnel with responsibility for Vioxx," provided an "obstacle handling guide." If a doctor said he was worried that Vioxx might raise the risk of a heart attack, he was to be told that the drug "would not be expected to demonstrate reductions" in heart attacks or other cardiovascular problems and that it was "not a substitute for aspirin." This wasn't a direct answer.
One training document is titled "Dodge Ball Vioxx" and consists of 16 pages. Each of the first 12 pages lists one "obstacle," apparently representing statements that might be made by a doctor. Among them are, "I am concerned about the cardiovascular effects of Vioxx" and "The competition has been in my office telling me that the incidence of heart attacks is greater with Vioxx than Celebrex." The final four pages each contain a single word in capital letters: "DODGE!"
There's more, including incidents of Merck coming down hard on academic researchers who presented negative appraisals of the drug. They seem to have gone way over the line - at least, what should be the line - in trying to protect their blockbuster drug. It's ugly and it's disappointing, because I always had a high opinion of the company. This is just the kind of thing that gives my industry a sleazy reputation, and it infuriates me to see how much of it can be deserved.
Naturally, Merck says that the statements in the article are taken out of context. Perhaps some of them are, but it would have to be a pretty unusual context for this stuff not be be what it looks like. And what it looks like is blood in the water for the lawyers, who will now go even more beserk than usual. Who could blame them? Who knows what other things might turn up in discovery proceedings, if goodies like this are already available?
No, I already thought that Merck was in major trouble, but this is going to be one for the record books. Merck is going to be out many, many billions of dollars, far more than they ever made from Vioxx itself. I don't see how the company gets out of this without terrible damage, with most of it done to the cheers of an angry crowd. It's sad, because in many ways Merck has been a great company that's done a lot of good in the world. But not always, and not this time.
Merck has a lot of very bright, very competent, very hard-working researchers. But trouble that's coming is going to lay waste to the good and the bad, the innocent and the guilty. Who will be spared?
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September 7, 2004
Update: (Much) more on this topic here.
Readers are already asking me if I've read Marcia Angell's new book, "The Truth About the Drug Companies." I think that some of you are trying to do me in, hoping I'll completely throw a piston rod or something. It's a real possibility. Angell's take on my industry profoundly irritates me. Here's Janet Maslin's New York Times review of the book from yesterday. She finds the book to be "tough, persuasive, and troubling" although she says that Angell is "likely to be on the receiving end of some angry rebuttals."
I'm glad to pitch in on that worthy effort, but I'm going to try to do it in a larger (and larger-paying!) forum. The thing is, the drug industry deserves some criticism. I've handed out a bit myself. Maslin's review points out Angell's angry words about Claritin/Clarinex and Prilosec/Nexium - hey, join the flippin' club, Marcia. But in this kind of book, the worthwhile stuff gets buried in all the flying horse manure.
To pick just one road apple, Angell is a great fan of the "All The Drug Companies Do Is Rip Off NIH" line - which, I can tell you, most folks in the drug industry have never heard of. (And you should see the expressions on their faces when they do.) There are people who call for drug companies to immediately give up every penny they've made on any marketed drug that had anything to do with an NIH grant. I've spoken about this before, and I'm sure that I will again, but for now, I have just one question:
Can we get reimbursed for all the ones that didn't work?
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July 1, 2004
The marketing practices mentioned in the last posting sound a lot like radio-station payola - paying to get a song on the air. There was an interesting defense of this practice mounted recently over at Marginal Revolution (see the first three postings here.
Is there a difference in this case? (I mean, short of the "we're-talking-about-people's-lives-here" argument, which can be valid but ends things before you have a chance to do any potentially useful thinking.) I think there is, and it has to do with market efficiency.
Whether a song becomes a hit or not is based on a relatively quick aesthetic call by a large audience: "I like that." The pro-payola argument (or at least the non-anti-payola one!) is that you can't force a song to be a hit by paying for airplay - all you can do is pay enough to give it a chance to become one. There are historical examples of songs and artists that likely wouldn't have had a chance without someone opening their wallets.
But paying doctors to prescribe certain drugs is a different sort of market perturbation. For one thing, there's not such a good feedback mechanism as there is with listener choice. It takes a while before you can tell if most medications are working or not, days or weeks. And even then, it may not be apparent to the patient. Blood pressure therapies don't make you feel much different at all, even when they're lowering life-threatening hypertension. And most chemotherapy (to pick an extreme case) makes you feel absolutely worse, immediately and continuously, even if it's managing to put your cancer into remission.
And songs are more clearly differentiable, making their market more efficient. Listeners can pick out a new song by an established artist quickly, and if it's someone they've never heard before, they'll notice that, too. But the differences between, say, the different statins are more subtle. You won't feel your HDL increasing a bit more with one of them versus the other - heck, unless they look at a large statistical sample, physicians won't notice that, either. And there's the large question, in this case and others, of whether that real difference is enough to have a real clinical effect. No one's in doubt for very long about whether a song has accomplished what it's trying to do.
In radio payola, you're trying to seed a large market and hope that something will then take off through the free choice of the consumers. But who are the consumers in the prescription drug market? There are areas where direct-to-patient marketing works, in which case it's clear that the patients are regarded as the real consumer. The hope is that they'll storm their doctors offices clamoring for the latest therapy (much to the irritation of the doctors involved, I think!)
But in many other fields, it's the physician that's clearly the consumer and the target of advertising. Schering-Plough appears to have been paying for their interferon to be prescribed for hepatitis patients, among other things, and there's never been much (any?) direct-to-patient advertising there. One physician can write for a large number of patients, so the temptation for well-targeted payola is strong. And wrong.
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June 28, 2004
In case anyone has me pegged as a reliable apologist for the pharmaceutical industry, I'd like to direct you to this article in the Sunday New York Times. It details marketing practices (in this case, from Schering-Plough) that, if reported accurately, amount to little more than programmatic bribery of physicians. I can't defend this stuff, nor do I want to.
I have a brief message for anyone involved in this kind of thing. We're having a rough enough time in the industry already, don't you think? As you're doing your job, ask yourself if your work is the sort of thing you'd care to have spread all over the business pages of the newspaper. It had better be.
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March 29, 2004
I've had some e-mail from a colleague who says that GlaxoSmithKline is running an ad somewhat similar to the one that I sketched out last week. It ends, he tells me, with the phrase ""Who pays for medicinal research? Pharmaceutical companies do." Sounds like they've taken the results of that opinion survey to heart. Perhaps it'll help. I have to say that I haven't seen the spot (but I don't watch much television, so I might not be a good data point.)
Wonder where and when it's running? Any sightings out there? Perhaps we can assemble a reverse demographic. The ad buys might be rather revealing about where GSK thinks that they can do the most good. Do you target the people whose opinion might be most open to changing, or for those whose opinion would do you the most good if it changed? Generally speaking, those aren't the same groups.
And secondly, my mention of Jazz Pharmaceuticals' ferocious fund-raising round brought a response from someone who actually does venture capital work for a living. And if the whole thing seemed a bit odd to me, well, here's how it seemed to him:
It's ridiculous. The guys who funded that company are going to have their heads handed to them by their limited partners when that deal blows up.
Even IF they successfully in-licensed and developed a couple of drugs, how are they going to make back their money? The guys who bought in got LESS than half the company. You want to see at least 15-20% returns on VC money, or it's not worth the risk. It will have to go public at over $1 billion in the next 3 years to even come close to hitting a decent return for these guys. If they have to wait for 6-8 years (more typical), it'll have to go public over $2 billion. That's what they're betting on. I'd rather buy a lottery ticket.
While I'm on the subject of Jazz, another reader from Big Pharma sent this along:
I agree that it's going to be risky and expensive going this route as a start-up with CNS therapeutics. However, I think you could reasonably argue that this is now more or less the situation (and for all the therapeutic areas) at Bristol-Myers Squibb. All of their recent drugs have been in-licensed, I don't think their Lead Discovery has produced a drug for them in at least 10 years. . .
He's got a point, and BMS has company. There are other companies that have just one or two products of their own to show for that same stretch of time. I'll name Pfizer and Schering-Plough just for starters. The problem with running an inlicensing operation these days is that there are too many people trying to play the same game. Pipelines are so thin that any outfit with a real candidate can hold out for an insanely good offer (remember the crazy sums that BMS laid out for things like Erbitux?) So where is Jazz going to find these great drug candidates? And how much are they going to have to pay?
| Category: Business and Markets | Why Everyone Loves Us
March 23, 2004
Here comes a fine snapshot of the shape that my industry is in with the public. The Sunday-supplement magazine Parade did a cover story last weekend on medical research, and they commissioned a survey to go along with it. Here's the PDF of the results, obtained in a collaboration with ResearchAmerica, an academic/industrial advocacy group.
One question that particularly caught my eye was "Who do you think pays for most of the medical research done in this country?" 59% answered that the government does (and thus the taxpayers), and 9% said that the pharmaceutical companies do. The Parade article correctly pointed out, though, that industry actually does over half of the research by itself. Looking at that response, I can't help but see the footprint of the idea that I was dealing with here a couple of weeks ago, that NIH does all the drug discovery and we drug companies just swoop down, flap away with the swag in our talons, and feast on the profits.
Another answer that I found grimly enjoyable was to the question "How long do you think it takes, on average, to bring a new drug to market?" 29% of the sample answered 1 to 4 years, and 40% answered 5 to 9. Would that it were so! The record in my experience is just short of 11 years from discovery to regulatory approval. I know it's occasionally done faster, in special cases, but it sure runs slower a lot of the time, too. Makes me wish that they'd asked people to ballpark how much it costs, too. . .
I should note that the responses, overall, were very favorable toward medical research. People want more money spent on it, they support tax and regulatory reforms which would make it easier to perform, and so on. They just have no idea of who does it, or how long it takes.
So, what would it take to get the word out? I can just about sketch out a commercial in my head, just sitting here at home. No smiling senior citizens, no dogs, no athletes or running children. Just something like this:
CLOSEUP of some solution stirring in a round-bottom flask: "John Doe had an idea in his lab for a new medicine. . ."
MONTAGE of white-coated researchers pouring, pipetting, wheeling carts, etc.: ". . .and for once, this one seemed to work. His company got interested, and they made more of it. . .
PAN past a pilot-plant reactor sluicing out product: ". . .a lot more. His compound was tested over and over. Tested for how well it could treat its disease, tested for safety a dozen different ways to see if it could really be a drug. . ."
DISSOLVE to a physician dispensing a service formulation to a volunteer: ". . .and for the first time in John's career, something he invented made it all the way into patients."
TIME-LAPSE DISSOLVES of roomfuls of people fading in and out: "Then the real work started. Small groups of people, then hundreds, then thousands tried his compound in different ways, at different doses. It took years, and it took hundreds of millions of dollars. . ."
CLOSEUP of a pill rattling out of a container in slow-motion: ". . .to find out - that this wasn't going to be the one. Not quite."
DISSOLVE to head shot of researcher slowly flashing wry, determined smile: ". . .but John was still in his lab. Still working. And one day he had an idea. . ."
SUPERIMPOSE a closeup of another solution stirring in a flask, and fade to lettering: America's Pharmaceutical Companies: Where the Drugs Come From. "America's Pharmaceutical Companies. We'll never stop. We promise."
OK, I'm a professional chemist, not a professional PR man. But tell me, would an ad like that really do a worse job of informing people than the stuff we're already doing?
| Category: Drug Prices | Why Everyone Loves Us
February 29, 2004
Some interesting mail has come in after last week's post on comparative clinical trials. Reader C.B. that I spoke about here some time ago, but should have raised again:
"It seems to me that something else is being left out: not all patients respond the same way to any particular drug. . . Suppose that drugs X and Y are equally efficacious when given to the appropriate patient, but the population more responsive to X is smaller than that benefiting from Y. A simple comparative trial would suggest that Y was more effective because it assumes a single type of patient. On the basis of the results, people who should get X would only be allowed Y. . ."
It's true, there are a number of cases like this, and this is one of the traditional arguments for multiple drugs in a given class. I've made it myself. Given the state of the art, it's nearly impossible to untangle these things. In almost all cases, we have no idea why some people respond better to a particular therapy; it's trial and error. Clinically, these things are bottomless pits, so I think that comparative trials are going to be most useful in areas where a large number of patients respond to both drugs under study.
But we're in the process of inventing ourselves out of this situation. That's why all that money is being poured into pharmacogenomics - and quite rightly, although the end result is that many drugs are going to have their potential market size whacked into a rather more compact shape. The great thing about pharmacogenomics is that we're finally going to know who should take our latest drug, and we'll be able to find them and sell it to them. The terrifying thing, from the marketing standpoint, is that we're simultaneously going to find another group of patients, a potentially larger group with the same disease, who will never take that drug at all. It's going to be a better world, but one in which some business models (cancer therapy!) are going to have to change.
And in a similar vein, reader R. D. writes:
"I have yet to see someone make a rational case for why me-toos are bad. At most, the argument seems to be that if pharma would just stop spending all its time coming up with me-toos, we could get around to curing cancer and parkinsons and stuff. I think that's bunk. You and I both know that any pharma that could come up with cures for things like cancer or parkinsons could start their own mint. The reason they haven't is because it's HARD, not because they prefer to make less money by painting their old pills purple and trying to convince everyone that they're new and improved."
Purple? What on earth can you be talking about? No, the argument he's talking about is one that (in this form) I don't have too much time for, either. The me-too drugs are there to keep the coffers full to pay for the research that doesn't work out, and to tide companies over the dry spells. I can see the objections to the areas where there are six and eight therapies all piled up on top of each other (for example, does the world really need Crestor?) But if Crestor makes money, some of that's going to pay for something new.
And the reason for that touches on another favorite whipping boy: marketing and promotion costs. Keep in mind the inverse relationships between advertising costs, novelty, and the chances of success. A new drug that does something no one's ever seen for a major disease previously thought untreatable - isn't that what makes everyone happy? How much, comparatively, would have to be spent to market such a therapy? There's no competition - it would sell itself! But what are the chances that any of us are going to find and develop such a wonder?
(OK, some of you are saying "Viagra! First on the market, first in the category, promotion out the wazoo!" But keep in mind: no one was sure that men would actually go to their doctor and admit their symptoms - thus the advertising blitz. And Prizer knew, with all the other companies working on PDE subtypes, that competition would be coming soon. They needed all the brand recognition that they could buy.)
Meanwhile, contrast a first-ever wonder drug with, say, the umpteenth statin. It's a crowded field, and you have to spend like crazy to make headway. The thing was a bit lower-risk to develop, since you knew that the rationale was there. But your cost-of-sales figures are going to be uglier, and nothing's ever going to help them.
My point is that a company needs both of these kinds of drugs. You can't hope to live only on the first kind, because they happen so seldom and so unpredictably. And no one's trying to live only on the second kind, either, because you've traded higher costs their for relative security. Everybody developing one of the first class wishes they had some of the second to tide them over. And everyone with drugs in the second class is looking for one from the first.
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February 26, 2004
I've already had some reader mail (see here) about this article in today's New York Times. It starts out looking like a real pharma-bashing exercise. Up to a point, it is - and up to a point, it's deserved, too. But in the end it's a more subtle piece, not that you'd guess that from the opening paragraphs. (I have my own solution to the problem the article raises, and it will bring joy to no one. Read on.)
The issue is comparability of drugs, especially drugs with the same broad mechanism of action. Look at all the statins or antiinflammatories on the market: is there one that's better than the others? Of course, if you listen to the companies that make them and promote them, the answer is clear. Their product is best! But, as in any other industry, that's not the most reliable guide.
The article uses the example of two marketed forms of the protein erythropoetin, one from Amgen, and one from Johnson and Johnson. J&J's product is about one-third the cost of Amgen's. Is there any reason to pay for the more expensive option? Medicare has asked the National Cancer Institute to run a study to answer that question, but (as the Times points out early and often) there is a provision in the latest Medicare legislation that keeps the program from even using such evidence of functional equivalance in its payment decisions. As you'd imagine, Amgen is arguing that this provision makes the planned Medicare/NCI comparison study a moot point. Why compare?
This would seem like an easy call: the drug companies are slamming the door on something that might cut into profits. Hey, I work here, and I'm sure that that was the motivation, too. But I should add the standard comparisons to other industries at this point, though, and note that car makers are not required to prove that their latest models actually work better than the older ones, or better than the competition's. Nikon doesn't have to run head-to-head trials with Canon, nor Gateway with Dell.
I like those examples, but I realize that there are some other considerations. For one thing, we're talking about public funds here, right? Partly, yes, although the managed-care corporations have a big interest in this, too. I'd add that the government spends a lot of money on goods and services that are not required to be comparison tested (but are selected on the basis of lowest bid.) We'll get back to that topic in a couple of paragraphs. The other big factor is that my car and computer comparisons are discretionary purchases. Health care is treated differently. It's an emotional issue, a life-and-death issue, and it's always going to be held to a different standard than other businesses.
So, let's test! But as the article makes clear, it's not as easy to test these things as you'd think:
. . .Rarely are such studies able to answer all the most important questions. The National Cancer Institute has been mulling the appropriate design for the Aranesp-Procrit trial for nearly two years and will probably need another year before starting the test. . . In the end, more than one trial may be needed, Dr. Feigal (of NCI) said.
Dr. Feigal declined to estimate the cost or size of the eventual trial or trials, but similar tests have cost millions of dollars. Indeed, for comparative trials to be the size needed to measure true differences between drugs, they generally need to be large, lengthy and expensive.
Indeed they do. The article goes on to talk about the hypertension drug comparison study that got such play in the media a few months ago - not least from the New York Times itself. It hasn't settled the question, though. There are still real doubts about which therapy is most effective (for one thing, because patients in the study didn't take more than one type of drug, although in the real world this is a common mode of treatment.) This was a huge study already, and adding arms to assess combination therapies would have bulked it up considerably.
Still, I'm in favor of doing some head-to-head tests, because I think that there are several therapies out there that don't offer much for their price. (I'm looking at you, Nexium!) Here's my proposal - and yes, I'm going to go ahead and treat the drug industry unlike any other. If a company wants to bring out a me-too therapy, it will be required to show evidence of whatever factor differentiates it from the existing agents. The company gets to choose the battlefield: more efficacy? Quicker onset? Fewer follow-up visits to the doctor? Whatever. Pick a reason you're going to promote the drug, and come up with data to back it up. I think we'd end up with fewer me-toos on the market, but we'd lose fewer of them than many critics might think. Many times, drugs that look the same can indeed act differently. Admittedly, it would take some careful clinical work to bring some of the differences out, though.
This change would require a major shift at the FDA. For existing therapeutic modes, you'd need to switch at some point from placebo-controlled trials to competition-controlled trials. Perhaps you could run an initial test-the-water placebo control (after all, these are drugs that have a high chance of working), and from then on you run versus the competition. There are complications - which competitor, for example. But it's possible to do, and it's an idea that has been talked about for a long time.
And who's going to pay for all this? Well, you are (if you're a patient, that is.) Believe me, we're going to pass those costs on, and pronto. Raise the regulatory barrier, pay more money: it's a law of nature. And the lost revenue from the me-too drugs, which have higher chances of success (but still aren't sure things!) will be passed on, too. I think that there are still savings to be realized here - but they're not going to be as big as they seem.
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February 23, 2004
I've been involved in the comments section of another blog, a discussion of pharmaceutical prices which took off from the posts over here. Things have taken a turn that I didn't expect, so I thought I'd run it past the readers of this site. There's a specific misapprehension that I'm running into, one that I've never quite seen before. Am I right to be puzzled? Read on.
Things got underway when the blogger Prometheus 6 picked up a link to my recent drug and research cost pieces from Sebastian Holsclaw's site. (There are a number of comments over there, which are rather easier to deal with than the ones we're coming to.) P6 started off with a blast at the concept of using imputed interest rates to calculate drug costs. We both reference Marginal Revolution on that one, but he's not buying it.
The discussion then split up into a couple of issues. The first was the whole imputed interest / opportunity cost issue, which ended up in another post. Sebastian Holsclaw reappeared to take P6 to task in the comments section, but I don't think that anyone is going to convince anyone else on this issue. This part is worth reading if you want to see some of the difficulties people can have when discussing economics (no doubt my fellow Corantean Arnold Kling gets this kind of thing all the time.)
The other issue arose from P6's final contention in that initial post above. He finished up his take on research costs by saying that "Most of the money spent was federal money." That, as you can imagine, set me off pretty quickly in his comments section. Here's some of what I wrote:
"As for your second question, there are a lot of people claiming that most new drugs are really straight from the NIH, or some such. This is not true. Even if you get an idea for a drug target right out of a paper in the Journal of Biological Chemistry, from an academic lab funded 100% by government grants. . .even then, you're still looking at, on average, that 800 million dollar figure to find a drug and develop it. The amount spent in grant money pales, imputed interest rate and all.
To pick a recent example, the University of Rochester did not develop a COX-2 inhibitor, although they discovered the COX-2 enzyme. Drug companies did - and a majority of companies that tried to make one failed, and all the money they spent to do it is gone.
Academic labs rarely, if ever, come up with a compound that is ready to go to clinical trials. They're doing academic research, as they should: broad fundamental studies that point the direction you should go in to spend your 800 million.
When a drug company does the fundamental research part as well, the costs are even higher."
This spilled over into yet another post, and here's where I've come to realize that I'm not making any headway. P6 seems to believe that most pharmaceuticals should be in the public domain, unless every single bit of every idea along the way was generated inside a drug company. Here's some of his take:
"Let corporations have process patents on the ways they've developed to mass produce the drug, but if it was developed in government funded research the drug itself should be in the public domain."
"My reasoning is, the risk pharmaceutical companies undertake is in creating the processes whereby the drug is produced, packaged and distributed safely (I include testing in this). They are entitled to a process patent. But in most cases the company neither discovered the compound nor ascertained its primary effects."
What's happening here, I thought, is that he's assuming that academic labs produce drugs. And drug companies, it seems, just test them some more and find ways to manufacture them. What a life we'd lead then! So off I went again, in his comments section:
"Unfortunately, you are wrong. In the huge majority of cases (well over 95%, off the top of my head), the compound was discovered by the drug company. Academic labs do not, as a rule, discover drugs. They are not in that business. They discover biological pathways, new behaviors of known proteins, interesting biochemical regulatory mechanisms. Interesting stuff, valuable stuff. But they do not discover drugs. I can think of almost no exceptions. . .
That's how we can patent the compounds, you know. If anyone else has made a compound before and described it in any way, we cannot own the chemical matter by a patent. And we will almost never go ahead with a project unless we're absolutely sure that we own the chemical matter.
Whoever told you otherwise is gravely misinformed. You would do your source a favor by correcting them."
P6's most recent reply to all this begins:
"Sadly, I have no source. I just know what is done in academic research and give it more weight than you."
Well, we can finally agree on something: that's sad, all right. My first impulse was to have him show me some of this academic research that lead right to a new drug, but I wanted to take this over to my readers first, for either irritation or entertainment value as the case may be. As I mentioned, I haven't come across this delusion - that drug companies don't actually discover drugs - at quite this level of virulence before. Is this something widespread? And if it is, how did we in the industry let things get to this state?
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December 12, 2002
The front page of today's Wall St. Journal featured a long story on just exactly how Bristol-Meyers Squibb cooked their books to make sales and earnings appear better. They're in the middle of restating a couple of years worth of financial results, so the article was timely. I haven't been able to see all of it yet (told you I was busy!) but what I've seen makes interesting - and disturbing - reading.
BMS had promised the Street 12% sales growth a year for five years - in the face of some patent expirations - and this unkeepable promise led them to try whatever they could think of to make the numbers. And it seems to have been made clear to managers that you made your numbers or they found someone who could. . .so they made them. By hand, from whatever materials came their way. . .
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October 2, 2002
HHS has fired a warning shot across the bow of the drug industry. These draft guidelines don't have the force of law behind them (yet,) but the implication seems clear: shape up, or they will.
This election cycle has seen some grandstanding against the drug companies (and without foreign policy intruding, there would surely have been more.) The industry has to realize that the political wind is against it these days. Nobody's in the mood to hear some more stories about a powerful industry throwing money around to influence people.
I feel a bit odd saying this, but I wouldn't mind seeing some of the restrictions made mandatory, with some vigorous enforcement. It would defuse the marketing arms race in the industry a bit, and it's for sure that nothing else will. Companies will, of course, act in their own interests - it's silly to expect them not to. And as things are set up, it's in their interest to market as aggressively as possible. There aren't that many wonderful new drugs to sell these days, which puts increasing pressure on both the existing portfolio and on anything new that might come up.
I can go on like this because marketing types and drug-discovery types don't spend much time interacting, and tend to regard each other as alien beings. To us, although we realize the value of advertising, some of the marketing campaigns seem in danger of tipping the balance to where they start to eat into the potential profits of the drugs - a diminishing-returns situation. To them, research seems like the black-hole cost center that untold zillions of dollars go spiraling into - and for what? Where's something that they can sell?
Maybe some of the blogger physicians (you, and you, and you, for starters!) can report over the next few weeks or months if they're noticing anything different.
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September 18, 2002
The "us" of that title refers to those of us in the drug industry (a reasonable percentage of my readers, but far from a majority.) Many may have noticed that Tuesday's Wall Street Journal had two two articles side-by-side under the "Politics and Policy" heading. They made an interesting (and surely non-accidental) contrast.
One was on the various ways that the pharmaceutical companies want the FDA to ease up on advertising and promotional restrictions (with particular reference to Pfizer.) These include handing out reprints of literature articles that bear on off-label indications, for example, which I can see lands squarely in arguing territory. Companies are always trying to push that boundry, and the FDA pushes back. Fair enough.
But some of the "restrictions" that Pfizer objects to are less arguable. For example, they want to be able to stop printing the generic name of a prescription medication next to its brand name. Come on. Consumers are used to prescription drug ads by now, and they're used to seeing a second name printed right below the brand. This isn't confusing anyone, and I can't see how it affects the advertising campaigns at all.
Of course, what it does do is raise awareness of the compound's generic name, which could be an issue when the patent finally expires. That probably does make it a bit easier for the generic form of the drug to hit the ground running - when, say, people have been seeing "sildenafil citrate" written right next to "Viagra" all these years.
But let's be real. These days, when big-selling drugs go generic, their sales don't just slowly fade out like they used to: they drop off a cliff. HMOs aren't stupid, at least not when it comes to obvious cost-cutting measures. When Claritin goes off-patent, it's not going to matter whether or not the word "loratadine" is on everyone's lips; its sales are going to tank anyway.
Every drug company realizes this. So why is Pfizer (and the other companies that may be cheering them on) making such a request at all? It's not going to help; all it does is make the compan(ies) involved look slick and greedy. This is most definitely not the time to be looking slick and greedy.
Which is the point of the second article, the "Political Capital" column by Alan Murray. He correctly points out that running against Big Pharma looks like a winning political ploy these days. Democratic candidates, especially, are "standing up to the big drug companies," fighting for the little guy and all that, all over the place. However, says Murray, "Almost no politician in America is willing to stand up and utter this simple truth: The nation's pharmaceutical makers have done more to extend and improve the lives of ordinary Americans than any industry in history."
It does cheer me up to read that sort of thing. But, of course, that sentiment and a dollar will buy us a bag of chips. How did the drug industry get to be so unpopular? Murray suggests that much of the problem is internal - pharmaceutical PR has been so heavy-handed that people assume that we must have something to hide. He suggests that the industry lobbying group, PhRMA, give up the front-group ads and campaigns, and reign in the marketing excesses that make it look like we have to buy doctors to prescribe our drugs. He concludes "If the drug industry wants less criticism from the public, it will have to start by giving people less to criticize."
The man has a point.
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June 6, 2002
As readers will have noted in my comments on drugs like Clarinex and Nexium, I certainly don't think the industry I work in is always a one-hundred-percent benefactor of humanity. Drug companies are here to make money, and (like any business) they're trying to make the most money they can, consistent with their tolerance for the chance of losing it.
The much-written-about report on innovation in the drug industry (PDF here) turned out, on inspection, to be much less confrontational than I had feared. The authors point out, correctly, that pharmaceutical companies are reacting rationally to their environment. Big, money-making drugs are coming off patent, and not enough new ones have been discovered in the last few years to take up the slack. Therefore, the companies will do whatever they can think of to keep the profits coming in for as long as possible.
That includes stepping up the marketing campaigns for what drugs they have. It includes ripping off their own expiring profit center drugs (as in the two mentioned above,) and doing whatever they can to get patients to ask for them and physicians to write for them. And that includes all sorts of schemes to delay generic competition. Some of them are bare-knuckled, but within the letter of the law (fighting patent claims.) Some are apparently legal, but have a certain shady aura around them (such as paying generic companies to go away.) And still others, like this accusation against Bristol-Meyers Squibb, are (if true) flat-out illegal.
It's capitalism in action, and it's not always - not even usually - a pretty sight. The same sorts of things go on in every other industry, in any number of variations. I think the same thing about individual economic competition, for that matter. One reason I like capitalism better than the other schemes that have sought to supplant it is that it seems to me to line up more closely with human nature. Not an original thought, but its validity is why it's so well known.
People are going to act in their own interest, to serve what they see as their needs and desires. You can't get rid of it, so you might as well set things up so they do some good while they're at it. Wouldn't it be more efficient if everyone worked that hard for the common good, though? Sure! Should some other zoological phylum develop intelligence, maybe they can give it a try. We, as far as I can tell, are wired for what we're doing.
And so are companies. Wouldn't it be more efficient if all of us in the drug industry just stopped trying to outdo each other? Open up the labs, put all our compounds in one gigantic screening file, pool our efforts? Well. . .it's a tempting idea, in some ways. But what keeps us going is the competition, the knowledge that (like the sharks we are,) that we have to keep moving or die. I fear that a Monolithic MegaPharm would become so bureaucratized and lethargic that whatever good came of getting larger would be more than canceled out. Some of the large merged companies we have now are showing signs of this disease as we speak.
Knowing that other people are working on the same targets keeps us moving. The ticking clock of patent expirations, the arm-wrestling with the regulatory agencies, the demands of shareholders keep us moving. I think the best thing to do would be to, again, arrange it so that the maximum amount of good gets done while we're out there pursuing our own agendas.
That means that I wouldn't, frankly, object to making it harder to put drugs like Clarinex, Nexium and so on on the market. If I were the FDA, I'd raise the bar in such cases for advantageous efficacy, and if I were an HMO, I'd raise it for what I'd reimburse. But at the same time, I'd make it easier to find and sell new drugs, so there would be less incentive for all these activities that don't lead to any real benefit. Faster regulatory approval, no method-of-treatment patent claims, more incentives like the orphan drug designation, some sort of tort reform: all these would help.
It boggles the mind, the amount of effort and ingenuity pulsing through a high-tech area like pharmaceuticals. But political grandstanding about the evil drug companies, schemes to clamp down good and hard on them: these could wipe out the crazy risk-taking that's at the heart of the industry. Whack the ones that get out of line, sure. But while you're doing that, set the system up so that we can whack on each other with even more ferocity than ever. That's where the good stuff comes from.
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