Pradaxa and Drug Safety: Product Liability Played a Role

This week’s post is about the problem of product liability in pharmaceutical policy, an issue that I have not discussed since my first posts on this blog in February.  Boerhinger-Ingelheim’s drug Pradaxa (dabigatran) is a “thrombin inhibitor,” an anticoagulant drug used to prevent strokes and embolisms in patients with atrial fibrillation or other conditions that put them at high risk for stroke. One of the principal selling points of Pradaxa and other direct thrombin inhibitors is that their recommended use does not monitoring patient’s blood levels of the drug, unlike the much older drug Coumadin (warfarin) which is used for the same purpose but has a different mechanism of action and requires individual dosing and monitoring. Pradaxa has been the subject of very interesting news this past week, initiated by an article by Deborah Cohen, M.D. in the British Medical Journal (BMJ) entitled: Concerns over data in key dabigatran trial.  Accompanying the article was a feature editorial with the even more attention-grabbing title: Dabigatran: how the drug company withheld important analyses

Pharmaceutical Pricing-- The Story That Just Keeps Going

After last week’s foray into patents and pharmaceutical policy, which is perhaps the most technical and specialized area of pharmaceutical policy, I will return to the never-ending story of pharmaceutical prices and the controversy over Sovaldi, Gilead's break-through Hepatitis C drug.  Sovaldi has a "sticker price" of $84,000 for a 12-week course of treatment, at the end of which 90% or more of patients would be expected to be cured. Since Sovaldi is a pill that is given once a day, the 12-weeks of treatment means that there are 84 daily doses. The math is easy, even if the price, unlike the pill, is hard to swallow--$1,000 per pill. The drug has been a huge financial success for Gilead, which reported $2.274 billion in sales in just the first quarter of 2014.   However, the backlash has been equally huge.  In a rare display of bipartisanship in Washington, Senator Ron Wyden (D.-Ore), the Chair of the Senate Finance Committee and Senator Chuck Grassley (R.-Iowa), the Ranking Member of the Finance Committee, sent a demand for information concerning the development costs of Sovaldi and Gilead’s pricing decision.  However, even more than the investigation by two senior senators, the impetus for today’s post came from the blog RxObserver, which featured a post entitled Sovaldi: A Poster Child for Predatory Pricing [sic].  Before discussing the epithet “predatory pricing,” the perspective of RxObserver requires a bit of explanation.  RxObserver is a site that primarily provides the views of pharmaceutical benefit managers (PBMs), or as the blog itself states its purpose: “the Clearinghouse of the Future for Pharmacy Benefits.” It is, in general, a very high-quality blog, with an editorial staff composed primarily of well-recognized academic and government experts in health care policy.  I regularly read it and find it useful, although I was taken aback by that “predatory” epithet.   Download PDF

The Good, the Bad, and the Ugly: Developments in the Intersection of Patents and Pharmaceutical Policy

download PDF
This week I am focusing on patent law, which is one of the more arcane and technical areas of pharmaceutical policy. A recent major decision by the Court of Appeals for the Federal Circuit (CAFC) in Bristol-Myers Squibb v. Teva Pharmaceuticals (BMS v. Teva) is rather remarkable in the degree to which it departs from prior decisions on the patentability of small molecules as the active ingredients in drugs. Chris Holman, a leading scholar in the intersection of intellectual property and the biotechnology and pharmaceutical industries, wrote a great article a few years ago arguing that a significant degree of unpredictability in patent law would substantially depress pharmaceutical innovation. Holman argues persuasively that the uncertainty as to whether or not a patent claim to a drug's active ingredient would be enforceable is, in essence, an additional cost burden on pharmaceutical research and development, and that this increasing cost burden is responsible for a decrease in the output of pharmaceutical research. Holman pointed to a long period of stagnation in the number of new drugs approved as evidence of the decreased output of pharmaceutical research. He uses two examples of Eli Lilly patents that had been invalidated as evidence of the unpredictability of patent law. Holman's analysis of the unpredictability problem centered on three different ways in which uncertainty is created:

the proliferation of loosely defined standards rather than bright line rules; unpredictability associated with long-delayed clarification of critical and identifiable ambiguities in patent law; and perhaps worst of all, unpredictability that occurs when courts adopt a new interpretation of legal doctrine and apply it retroactively, to the detriment of the investment-backed expectations of patent owners.

The End May Not Be Near But The Future Is Not Looking Very Good

I have always been an optimist about the future of biotechnology and the future contribution of the life-sciences industry to health and healthcare. There have been a fair number of market cycles since I first began studying the biotechnology industry in 1984. When venture capital was tight or the window for initial public offerings slammed shut, I was always confident that those downturns in financing were temporary. Sooner or later the level of investments in early-stage biotech would rebound and the public markets would again be open to biotech companies with significant products in later stage development. My optimism that the markets would recover rested on my faith in the long-term rationality of the investment markets, both public and private. As long as basic research continued to provide the foundation for significant commercial opportunities, sooner or later profit-seeking investors would seize on those opportunities. It is the "as long as basic research" part of that premise that causes me to be concerned.