the personal views of a doctor in industry

Archive for May 2009

Why would we sell generic drugs rather than branded ones?

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I am on the side that finds it difficult to see the synergy between what we do on the ground every day and selling generic drugs. In spite of us, big pharma continues its march down the road of licensing and buying generic drugs, and sometimes even buying entire generic firms lock-stock-and-barrel (Big Pharma Adds to Generics Medicine Chest, WSJ).


The top reason why this strategy cannot work: ethical standards.


Our field force and medico-marketing arms are tightly regulated both internally, and externally through local industry body codes of conduct and international bodies such as IFPMA. The american firms also have the US Foreign Corrupt Practices Act (FCPA) to follow.


Rather than argue the point of how ethical or not we are in reality, I want only to point out that the strongest generic competitors are not beholden to the same regulations. The playing field is not level.


The second reason why this strategy will not work: competitive edge.


Unlike pharma firms, generic companies have been competing head to head with identical drugs with thin margins for years. We have always had scientific differentiation between us and our competitors. Pharma could always find a niche for its products to live in. We are not trained, and certainly not ruthless enough, to compete in a non-scientific arena.


The third reason, and the one I am least knowledgeable on: overhead costs.


We did not begin embracing generic drugs until the patent cliff could be avoided no longer. It is fair therefore to assume we are doing so to fill the hole while we develop some new drugs. When these drugs arrive, we will need the medical and marketing muscle to scientifically differentiate from our competitors again and so we cannot strip these people from the organisation just yet.


A model involving big overheads and selling drugs with thin margins is not something I would necessarily invest in.



Written by Pillhead

May 23, 2009 at 8:33 am

Posted in pharmaceutical industry

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A Walk in the Valley of Death

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The NIH has announced quite loudly that it is taking a bold step in helping to find cures for rare and neglected diseases (NIH Announces New Program to Develop Therapeutics for Rare and Neglected Diseases, NIH News). So what do the numbers look like?


According to a recent NIH press release, the atrition rate in the pre-clinical phase of development is so bad that researchers call it the “valley of death”! They think 80-90% of compounds fail to make it to human testing; some inside industry think that even this is low-balling it, and that number is closer to 90% (The NIH Takes the Plunge, In the Pipeline).


Some more numbers from the NIH press release:

  • “NIH estimates that, in total, more than 6,800 rare diseases afflict more than 25 million Americans. However, effective pharmacologic treatments exist for only about 200 of these illnesses.”

  • “Studies suggest that it currently takes more than a dozen years … to take a potential drug from discovery to the marketplace”

  • “it takes two to four years of work and $10 million, on average, to move a potential medicine though this preclinical process”

The WSJ reports that, “Stephen Groft, the director of the rare diseases office, said the program is starting with $24 million in funding this year with expectation of receiving the same amount each year until 2013”

  • USD24 million for 4 years is an investment of USD92 million;
  • Each drug costs USD10 million “on average” to get through pre-clinical development, and so there is enough money to develop about 10 candidates;
  • 90% of these candidates will fail, leaving just one successful compound;
  • With the timelines given, this compound would come to market in 2020;
  • According to Steven Paul, President at Lilly Research Laboratories the chance of getting from phase 2 trials to market is 1 in 8 (Blockbuster Drugs and Innovation) – I cannot find the ph1 attrition rate;


This program has about a 12% chance of resulting in one effective treatment in 2020 for one out of the 6600 untreated rare diseases.


It is a step in the right direction, but let’s not get carried away.


Written by Pillhead

May 22, 2009 at 3:33 pm

NIH to kick-start research into rare and neglected diseases

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“The National Institutes of Health is launching the first integrated, drug development pipeline to produce new treatments for rare and neglected diseases. The $24 million program jumpstarts a trans-NIH initiative called the Therapeutics for Rare and Neglected Diseases program, or TRND.” ( NIH Announces New Program to Develop Therapeutics for Rare and Neglected Diseases, NIH News)


Rare diseases are those that affect less than 200,000 Americans, and neglected ones are those that affect the global poor disproportionately.


The program will identify suitable compounds for research in these disease areas and NIH will take them through pre-clinical development themselves. If they manage to get one through that far then they will look for external partners to take the compound on to phase 1 trials in humans.


Why do they feel the need to step in? According to the NIH press release, “Private companies seldom pursue new therapies for these types of illnesses because of high costs and failure rates and the low likelihood of recovering investments or making a profit”. As acting Director Raynard S. Kington notes, “The federal government may be the only institution that can take the financial risks needed to jumpstart the development of treatments for these diseases, and NIH clearly has the scientific capability to do the work.”


This is good news. Governments have a duty to to use some of our tax dollars to look after the less fortunate members of society. Some commenters are missing this point. The WSJ health blog for example: “It’s tough to get drug companies to work hard on drugs for diseases that are either rare altogether or common only in parts of the world where people can’t afford to pay much for treatment” (NIH Treads Where Drug Industry Rarely Goes). The point is that the pharmaceutical industry has no duty to be in unprofitable areas, and if it does venture there then it should be recognized for what it is: philanthropy.


Written by Pillhead

May 22, 2009 at 1:49 pm

Pfizer offers free drugs to retrenched Americans

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What a good story (Free Lipitor, Viagra, 70 other drugs for jobless, and Pfizer Launches Free Medicines Program For Newly Unemployed Americans). 

By offering to cover the cost of some of their current Pfizer drugs for up to 12 months, this program does three things: 1) takes some financial worry from the shoulders of these people, 2) keeps them on Pfizer’s drugs when they would otherwise be quite likely to either switch to a cheaper version or stop therapy altogether, and 3) increases the chances that those that benefit from the scheme will stay on Pfizer meds when they get a new job.

This is the holy trinity of recession marketing goods: good PR, goodwill, and good business sense.

We also know the name of the chap behind the idea: Dr Jorge Puente, a medical man.

Written by Pillhead

May 17, 2009 at 1:11 pm

Disease Management Programs

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I like to eat burgers. If I chose to eat a salad for lunch tomorrow instead of a burger, but then eat whatever I like thereafter, have I improved my health in the long term? Can the benefit of that one salad be quantified? What if I double my salad habit, taking one more salad the next day for lunch?


Like my appetite for lettuce, in the real world people do not take their chronic meds for very long either. So what good do these drugs really do if a patient takes them for only 3 to 6 months?


An article in the FT (The line from peddling pills to “disease management”) discusses the attempts being made to improve patient care and drug compliance using approaches outside of the traditional Dr-patient relationship. These strategies aim to address real problems: neither do patients take their medications as directed for long enough, nor do they curb their unhealthy lifestyles enough. The assumption is either that Drs are not inclined to provide this kind of support, or that they do not have the time. The solutions being looked at involve communicating with patients between their visits to the Dr. These may include reminders to take meds or advice on exercise and eating better. The hypothesis is that these interventions will improve drug compliance and have a positive effect on patient outcomes, ie patients will live longer healthier lives. By avoiding the expenses incurred by ill health, there may be financial benefits too for whoever would have been billed for them.


If we generously assume that these programs can double average compliance from 3 to 6 months, then for a 50 year old patient who will suffer an MI on his 65th birthday, this improved compliance would mean taking his medication for 3.3% of those 15 years, rather than an unassisted 1.6%. Intuitively, this does not look like a particularly impressive result.


I am a fanatical believer in drugs. But I know that even I am not very good at taking them. If we really want to shift the needle on our life expectancy then we will have to do more than take a statin for 3 months. It pains me to admit it, but we may need a more holistic approach.


Written by Pillhead

May 15, 2009 at 6:28 am