Pillhead

the personal views of a doctor in industry

Posts Tagged ‘integrity

Roche Leaves Another Regulatory Body

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Roche has said in a press statement that it has, “decided not to rejoin the ABPI for the time being” (Roche move throws industry into doubt, FT). The Association of the British Pharmaceutical Industry (APBI) is the UK’s pharmaceutical trade body through which pharma self regulates its commercial activities and maintains ethical standards of promotion.

This is not the first time that Roche has left a local trade body: it left PhAMA in Malaysia some years ago too.

Pharma is allowed to self regulate in many countries, with government bodies taking a back seat. As the FT notes, in the UK, “the government’s Medicines and Healthcare Regulatory Products Agency can prosecute drug companies, but until now has left most disciplinary action to the Prescription Medicines Code of Practice Authority, which is run by the ABPI”.

If large companies leave our trade bodies then we have a problem. If we do not want to regulate ourselves, then someone else will have to step in to do the job for us. While this may be no bad thing for our ethical standards, the current some-in-some-out practice is not credible.

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Written by Pillhead

June 29, 2009 at 9:03 pm

Branded Generics, a Mug’s Game

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During the patent life of a drug, Big P must recoup its costs, cover its expenses and make some profit. Throughout those 10 years many of the normal rules of economics are suspended: our volume goes up and, in the absence of competition, our price goes up too (strangely in spite of massively higher volumes going through manufacturing, we do not appear to develop any competitive advantage in the manufacturing process, but that is another article).

And at the end of these happy years, we find that we have put a price umbrella over the market and in so doing we have literally built the market for generic competition to our drug.

Our response has been disappointing: branded generics (also called second brands).

While attempting to maintain the price of our premium branded drug, we launch a branded generic version closer to the generic competition’s price.

There is nothing wrong with pricing your product to different market segments, but the differential must be based on features which some are willing to pay extra for. In the drug business, all three of these drugs options are deemed by the regulators to be clinically the same.

We have a schizophrenic attitude to generic drugs. On the one hand we like them so much that we are selling them, while on the other we keep our original brand implying that there is some superiority. We then launch branded generic drugs which are somewhere in between. We never actually claim that brands are better than generics, we never claim that our generic is in any way less good than our brand.

There is no marketing angle for us in the current model.

You have to take your hat off to the brazen business of offering a drug to a person at one price, and essentially the same drug to a richer looking person at another.

We may learn to our chagrin that people do not like being thought of as mugs.

Written by Pillhead

June 10, 2009 at 3:22 pm

The crass is always greener on our side – Big Pharma does ASCO

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Reporting from ASCO, an article in Forbes asks the question, “Are Cancer Drugs Worth The Money?

 

Probably not, is probably the correct answer. How do we get away with charging so much for drugs that add so little in terms of extra days of life? I suspect that apart from the usual economics of it, there are two additional factors:

 

  1. Once people are given the death sentence of a terminal cancer diagnosis, they become desperate and irrational and therefore demand becomes price inelastic

  2. Cancer tends to hit in middle age and later, a time when people generally have some money put aside

 

Perhaps the pricing of cancer drugs is partly driven by the existence of a market segment of rich, desperate and irrational people.

 

What put a bee in my bonnet this ASCO? The Forbes article did, in particular two quotes in it:

 

The authors note that one trend that may further inflate the cost of cancer therapy is containment rather than cure. The big news is around the possible long term use of therapy to subdue cancer cells, the downside being that if you stop treatment the cancer comes back. William Burns, head of Roche’s pharmaceuticals division happily notes, “we have learned that it is a drug to start with and stay with”. And that phrase rolls off the tongue a little too easily for my taste.

 

But Burns is trumped by OSI Chief Executive Colin Goddard who, speaking about another drug trial that has not shown improvement in survival, noted: “We estimate we have the potential for at least $500 million in new [U.S.] business from this study”.

 

Don’t get me wrong: there is a place and a need for marketing people to do their thing, and for finance guys to do theirs. But ASCO is a medical meeting. If you do not want to look greedy then keep the commercial talk for afterwards.

 

Written by Pillhead

June 1, 2009 at 3:36 pm

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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Big Pharma Photographs Angry Harvard Medical Students

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By now, we have all seen the picture of the handsome Pfizer sales rep taking a photo with his camera phone (Do you know this Pfizer guy?, PharmaGossip)outside the magnificent facade of Harvard Medical School. Senator Grassley has fanned the flames (Senator Asks Pfizer About Harvard Payments, NYT)and in a letter to Pfizer wrote that he was “greatly disturbed” and he wants to see the photos. The ruckus is because the target of the pictures was a group of Harvard students protesting for their school to be more independent of industry support. While recognising that I am risking being called a contrarian, I do find myself asking: so what?

The students clearly did not feel intimidated by the cameraman. They continued their protest, and later openly spoke to journalists about him. For his part, the rep was happy to identify himself to the students.

In the fallout, the Pfizer spokesman adopted his customary position. While failing to say “thank you, Sir” afterwards, he did mutter something about the pictures being for a private collection.

Perhaps I am too English, but really; mountains and molehills anyone?

Written by Pillhead

March 9, 2009 at 12:21 pm

Posted in integrity

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Sales Reps – Pharma’s Lost Assets

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A new survey by SK&A (Physician Access Survey) makes sober reading. Remarkable in its coverage, according to  IN VIVO (Don’t Come Knokin’ On My Door) nearly all active practising physicians in the US were surveyed with a response rate of 94%, the results show that 24% of all physicians in the US now refuse to see sales reps at all. The numbers are particularly bad in large practices and hospital linked clinics; worryingly, the situation is getting worse.

Why does anyone chose not to meet with a sales person? Speaking for myself there are three common reasons: a) I do not want to listen to the person, b) I am not interested in what the person is selling, or c) I am already using the product

In terms of pharma sales, I think the first reason is where the interesting discussion lies.

Of all the relationships in healthcare, the one in which trust is most central is the Dr-Patient relationship. Drs really cannot afford to lose the trust of their patients. Unfortunately the public does not hold the pharma industry as paragons of integrity, and as a result sales reps are being banned from clinics. Drs have found themselves too closely and too publicly tied to us. They are attempting to reclaim the moral high ground following a spate of scandals involving Drs accepting large amounts of money and perks from the pharma industry; the last thing a Dr wants is to be too closely associated with our negative reputation.

But why is this changing now? The codes of conduct which our industry follows are getting ever tighter. In the US we are not even allowed to give pens away anymore (unless they are educational in nature!). Things that went on in the past would not be dreamed of today; and if they do happen then we are exposed to fairly significant legal consequences.

Some say that reps in the old days were better trained than today and in those days they were invaluable partners. Perhaps. But possibly Drs used to put up with us because they benefited considerably from the perks of the relationship. Those perks have now gone. Coupled to this is a new call for transparency which is being embraced by the healthcare industry as never before. At a time when we are trying to clean up our act, Drs are also trying to clean up theirs.

Our mistake is in making it too easy to lock us out. When Drs balance the positive and negative effects we have on their work, the balance is coming out as negative in more and more cases. We are not needed because we add too little value today.

The relationship needs to be redefined. The focus must be on integrity first and then on finding a way to be useful to our customers.

Written by Pillhead

February 15, 2009 at 3:10 pm

Posted in Sales Reps

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