What the Market Will Bear: Pricing Pressures and Pharmaceutical Value

Until recently, the high prices of drugs seemed to be something like the weather—something people complained a lot about, but about which nothing could be done. That may be changing.  I think the push-back on drug pricing is reaching new levels and both the pharmaceutical industry and its chief lobbying group, PhRMA, are showing concern and taking action.  Examples of the pushback on pricing can be seen in this CBS 60 Minutes clip and in this article on Gilead’s pricing of its newer-than-Sovaldi combination Hep C drug Harvoni.  The level to which this rising criticism of drug prices is causing PhRMA to be seriously concerned can be seen in its post-60 Minutes statement and in this video  and accompanying text about treatments for cancer and in this shot across the bow of critics of drug prices.  PhRMA is even suing the U.S. Department of Health and Human Services over a rule that requires Orphan Drugs that also have non-Orphan Drug uses that are priced at a discount, to be sold the discount price even when a hospital uses the drug for the Orphan use. I will address this PhRMA Orphan Drug suit in a future post.  The pharmaceutical industry lobbying group is clearly pulling out all the stops to make the case that pharmaceutical R&D is a very costly enterprise and that expensive drugs are well worth their high prices because of the health benefits they provide.

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Cancer Drugs, Survival, Research Priorities, and the Human Condition

It is fundamental to human nature to hope, and one manifestation of this aspect of human nature is the desperate but understandable desire of cancer patients with very grave prognoses to look for a glimmering possibility of beating the odds. In this post I will look closely at the data on an anti-cancer antibody may have incrementally raised the bar in the treatment of one particularly grave cancer and discuss how this and other similar cancer drug development fits within the current framework of healthcare delivery and reimbursement.  

Two Congressmen Express Concern About the FDA's Proposed Changes to the Labeling Requirements for Generic Drugs

My first two posts on this blog were about the FDA’s proposed change to the rules for generic drug labels and an estimate of the liability costs that might be incurred by the generic drug industry as a result of the proposed change.  The Generic Pharmaceutical Manufactuer’s Association lobbying efforts appear to have motivated Congressmen Steve Israel (D-NY) and Timothy Bishop (D-NY) to draft a letter to the FDA requesting changes to the proposed rule.  A copy of the Congressmen’s letter to the FDA can be downloaded through this link.

More on Anti-CD20 Antibodies for Leukemia: The FDA and TG Therapeutics Reach Agreement on Phase III Trial Design

In my post of June 2, 2014, I questioned the significance of data that were hailed as evidence of the superiority of Gazyva, a new anti-CD20 antibody for the treatment of chronic lymphocytic leukemia (CLL) as compared with Rituxan, the original anti-CD20 antibody used to treat CLL.  In that post, I focused on the difficulty of meaningful conclusions about the comparative efficacy of two drugs, even when those drugs are studied head-to-head, when the two drugs were administered at very different doses.  Here is news on the development of another anti-CD20 antibody for the same indication, with the likely result being even more debate about the comparative effectiveness of these agents and the continuing absence of studies that would definitively answer the question.

See the Onclive story on the FDA and TG Therapeutics see http://www.onclive.com/web-exclusives/FDA-Grants-Special-Protocol-Assessment-to-Phase-III-UblituximabIbrutinib-Studyhttp://www.onclive.com/web-exclusives/FDA-Grants-Special-Protocol-Assessment-to-Phase-III-UblituximabIbrutinib-Study

Biosimilars And Gene Patents In This Week's News

According to a story by Bronwyn Mixter in this week’s Bloomberg’s BNA BioTech Watch, the FDA has received at least twenty-five IND’s for biosimilar development programs.  Some quick perspective on that is appropriate.  Twenty-five initial IND’s for the development of new small molecule drugs for cancer or autoimmune disease would face many years of clinical trials and long odds against approval (DiMasi et al estimated the approval rate at sixteen percent to nineteen percent).  However in this “a little brave” and “a little new” world of biosimilar development, clinical development programs are likely to be much shorter in duration than development programs for new drugs or innovator biologics, and the success rates are likely to be very high, as I indicated in my post of May 19^th, 2014.  The DiMasi study referenced above estimated the large molecule success rate at thirty-two percent; and, biosimilars are not only within that large molecule category, they are copies of drugs that have already been shown to be reasonably safe and effective.  So it is very likely that we will see filings for the approval of more than twenty biosimilars in the next three years.  It will be very interesting to watch the development of the biosimilar marketplace.

Novartis Hopes PARADIGM-HF Study Results Lead to Blockbuster Sales for Its LCZ696: Big Diseases and Pharmacoeconomics

In this week’s New England Journal of Medicine the most widely publicized article reported on the findings of the PARADIGM-HF study, which tested Novartis’s experimental drug LCZ696 against enalapril, a commonly used ACE inhibitor, in the treatment of heart failure (HF). The double-blind study randomized over 8,442 patients with moderate to severe HF to a regimen of the experimental drug plus standard therapy or of enalapril plus standard therapy.  The primary outcome was a composite of deaths from cardiovascular disease and first hospitalizations for HF. After 27 months, the trial was halted because an interim analysis showed a very large benefit for the experimental drug group. The LCZ696 patients had an approximately 20 percent reduction in the primary outcome (914 patients versus 1,117 patients in the enalapril group: “hazard ratio in the LCZ696 group, 0.80; 95% confidence interval [CI], 0.73 to 0.87; P<0.001”).  The experimental drug group also had comparably substantial and significant reductions in the risk of death from any cause and the risk of death from cardiovascular disease.  The results of the study have been reported on widely and it is clear that Novartis hopes LCZ696 will achieve blockbuster revenues.  For purposes of this post, I would like to focus on two of the study’s findings with obvious pharmacoeconomic ramifications for calculating the drug’s costs and benefits, which are the reductions in both hospitalizations and in deaths:

Over the duration of the trial, the numbers of patients who would need to have been treated to prevent one primary event and one death from cardiovascular causes were 21 and 32, respectively.

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Crystal Balls, Ebola, and Pharmaceutical Development in 2020

It is always safe to make predictions about what the future will be like in ten years, because if it turns out that you were wrong, the odds are no one will remember. If it turns out that you were right, you can seize the opportunity to remind everyone of your remarkable prescience. With that as prologue, I will start by revisiting a prediction I made sixteen years ago about a date still six years from now. In April of 1998, at a conference entitled NEXTMED:  The Future of Medicine, I made a prediction for the year 2020 (20/20 vision was a popular theme in the futurist business back then). Actually I made several predictions, but I have carefully selected the one which has the best chance of proving accurate. In my talk I included the Ebola virus as an example of the progress I foresaw in our ability to respond to future threats:

Immunology at the Rainbow’s End: A Push-Button Vaccine Machine

It is a few years off, but obviously the science of predicting protein structure from a gene sequence is moving rapidly; and, well within the time frame spanned by this talk, it will be a reality. At that point, the window will slam shut on the possibility of our being overrun by a third-world virus, another HIV or, worse, a more widespread and contagious Ebola. Within days of the first cases being picked up, a blood sample of a victim would be sufficient to do a full genomic analysis of the pathogen, the pathogen’s proteins would be fully analyzed both for their function and their antigenicity, the most antigenic regions would then be synthesized with an appropriate adjuvant, and a very effective vaccine would be coming off the production line a week or two later.

Drug Safety and FDA Approval Times: It Is MUCH More Complicated Than the HEALTH AFFAIRS Study or the FORBES Response

In my blog post of March 26, 2014, I commented on a New England Journal of Medicine article authored by Darrow, Avorn, and Kesselheim that focused on the serious safety issues arising from the FDA’s accelerated drug approval programs for “breakthrough” drugs.  It is clear that the expedited approval of drugs based on surrogate endpoints can result in marketing approval for drugs with questionable risk/benefit ratios.  However, in the past week a different controversy has arisen over the relationship between drug safety and FDA approval times, sparked by an article in Health Affairs by Cassie Frank and others entitled Era Of Faster FDA Drug Approval Has Also Seen Increased Black-Box Warnings And Market Withdrawals.  The Frank article prompted a response from John R. Graham in Forbes with a title that evidences his disagreement with Frank’s group: Faster FDA Approvals Have Not Caused More Drug Safety Problems.  So who is right?  Actually, my answer is “Neither article sheds much light on the FDA role in drug safety.” It is complicated, like so many problems in pharmaceutical policy.

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Ebola Biologic Stirs Bioethics Discussion

I was quoted (and my expertise inaccurately described) in the San Diego Union-Tribune’s article about the ethical issues raised by the experimental ZMapp biologic for the treatment of persons infected by the Ebola virus.  I am not a specialist in bioethics, which is the description provided for me in the article, and only claim to know something about the ethical issues that are raised in drug development.  The otherwise reasonably well-written story is here. There has been a fair amount written about the ethical issues in this situation, where there are very limited amounts of a drug that has only animal data supporting its safety and efficacy.  The New York Times article by Andrew Pollock is here. Arthur Caplan, who has moved to NYU since his infamous involvement in the tragic Jesse Gelsinger gene therapy death at the University of Pennsylvania, is quoted at the very end of Pollock’s article.  Caplan expresses concern about the appropriate allocation of resources to therapy research versus public health in the expanding Ebola epidemic.  He may be correct that expenditures for drug research and development will do little for the current outbreak, but that is largely irrelevant.  I doubt that the development and scale-up of Mapp Biopharmaceutical’s biologic is diverting significant resources from the public health measures that Caplan favors.

Norway Leads the Way in Biosimilars: The NOR-SWITCH Study!

On July 24, 2014, Novartis announced that the FDA had accepted for filing the first application seeking marketing approval in the U.S. for a biosimilar version of filgrastim (Neupogen).  In my May 19, 2014, post “A Few Thoughts About Biosimilars” I discussed the problem of driving down the price of these somewhat cheaper, but still very expensive, drugs.  Biosimilars have been available in Europe for some time but none have been approved yet in the U.S.  In this post I will discuss a different but related problem in biosimilars development, which is built into the Biologics Price Competition and Innovation Act (BPCIA).