Pharma’s Cutting Edge

This article is worth reading if you are involved in Phase 1 studies of oncology agents. Joffe disposes of the artificial distinction between therapeutic and non-therapeutic Phase 1 studies in cancer patients and frames the ethical controversy surrounding an appropriate ethical calculus. Unfortunately, Joffe’s prescriptions, which include comparing the expected benefits of investigational therapies with average benefits from his suggested meta-analyses across therapeutic classes of alternative off-label therapies, are unsatisfying in their attempt to improve the situation. Readers interested in a broad discussion of Phase 1 studies beyond those conducted in patients with active disease (i.e. most Phase 1 studies outside of oncology) will likewise be disappointed, as there is none here. Despite these limitations, Joffe should be thanked for keeping the issue of Phase 1 ethics in the spotlight.

An anecdote of relevance: When I was employed at J&JPRD, we had a corporate-wide meeting for clinical scientists to discuss GCP and clinical ethics (I have to give J&J credit here; I attended at least three company-wide meetings where we discussed these important topics over a three-year period). I remember raising the issue of Phase 1 ethics in the context of the (then) newly issued Helsinki Guideline Revision. In an attempt to raise the level of debate, I claimed that most Phase 1 studies should be declared unethical by the standards of these guidelines. Rather than use my declaration as a kick-off point for a reasoned debate on this important subject, the physician who was then in charge of clinical research at J&JPRD and is now CEO of a small pharmaceutical company, used my comment to assert that all of J&JPRD’s Phase 1 studies were ethical and that anyone who believed they were acting unethically should “come to his office to discuss it.” So much for keeping Phase 1 ethics in the spotlight. Fortunately, boneheads like him are the exception in the industry.

CNN is reporting Lilly’s plans to return to court in early August to ask it to overturn an absurd jury decision in Ariad v. Lilly, in which a jury awarded Ariad $65M in damages and a royalty on sales of Evista and Xigris based on Lilly’s supposed infringement of Ariad’s patent on NF-kB-based therapies. As you’ll read, Lilly contends that Ariad’s patent (licensed from Harvard College, MIT and Whitehead Institute) is far too broad to be valid, likening it to a patent on gravity.

Typically, I’d say that Lilly was employing hyperbole to sway opinion their way, but not in this case. Ariad’s patent really is absurdly broad. It contains over 200 claims, many of which are constructed like Claims #7 and #9 (which were the specific basis for the Evista infringement claims):

Claim #7: “A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-.kappa.B-mediated intracellular signaling, the method comprising altering NF-.kappa.B activity in the cells such that NF-.kappa.B-mediated effects of external influences are modified.”

Claim #9: “A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-.kappa.B-mediated intracellular signaling, the method comprising reducing NF-.kappa.B activity in the cells such that expression of said genes is reduced.”

Not very specific, are they? They are even less so when you consider how ubiquitous is NF-kappa-B signaling throughout the body’s cells. For the uninitiated, NF-kB is a transcription factor that mediates general stress and inflammation responses. The NF-k-B/Ik-B protein complex interacts with at least 200 known proteins to modify the expression of thousands of genes. Apparently, and not surprisingly, these transcription factors also play a role in the regulation of some genes influenced by the two Lilly drugs above. Did the inventors know this when they filed their patent in 1995 (after Phase 3 studies for Evista and Phase 2 studies for Xigris had begun)? If they did, they didn’t bother mentioning it in the patent. No where among the roughly 52,000 words in the patent do the following words appear: raloxifene, SERM, Protein C, drotrecogin, osteoporosis, sepsis, estrogen, antiestrogen, coagulation.

For the good of therapeutic innovations generally, Ariad’s patent must not be allowed to benefit Ariad financially. Let’s hope that Lilly gets the jury verdict overturned, and that the judge sends a clear message to would-be filers of patents such as this: Gravity by any other name is still gravity and it may not be patented.

(Disclosure: I was once employed by Lilly and assisted in the development of Evista.)

As promised, this June’s PCE post is a condensed version of a white paper I’ve recently published (”Strategy from Science: Evidence-based scientific management principles for Pharmaceutical and Biopharmaceutical R&D Strategists”). The PDF version is available in the PGS library. I’ve previously commented on the issues presented below, but this is the first time I’ve framed the arguments in their broader context.

Strategy as a Concept
The concept of strategy as I will refer to it here is different from related activities such as “brainstorming” or short-term plans made in response to immediate needs. Rather, it is a conscious, ideally logic- and reason-driven, long-range planning process that serves a foundational role for related planning activities.

Although the type of strategic planning I’ll discuss here pertains solely to pharma/biotech (hereafter simply Pharma) innovation priority and process planning, the principles of scientific, evidence-based strategy are readily applicable to other corporate activities, such as financial and general organizational planning.

Pharma Innovation
The 1990’s saw the rapid growth of Pharma, in terms of volume of product sold, value of product sold and firm valuations. This growth was fueled by many new product introductions. While rational target selection was initially very effective in finding new drugs, eventually the discovery of so-called “druggable” targets failed to keep pace with the demand for newer drugs to replace those chemical- or pharmacological-class pioneers initially discovered in the 1980’s. The low-hanging fruit had been picked. The higher fruit that remained proved difficult to reach despite remarkable advances in our knowledge of the human genome and proteome during the 1990’s as well as the advent of myriad techniques such as high-throughput screening, computer-aided drug design, etc. aimed at improving the ability to find and create new drugs. Drug R&D spending continued to escalate exponentially, largely due to increases in clinical budgets, but the output of new-molecular entities fell. By 2001, as the wellspring of new drugs from the 1980’s discoveries slowed to a trickle, we began to read of a “crisis” in R&D productivity.

What happened in Pharma R&D in response to this perceived productivity/innovation crisis? A lot of introspection is what happened. Senior managers began to admit publicly that their focus on the latest genomics findings and high-throughput molecular screening during the early 1990’s was not paying off to the extent they had hoped. Most senior R&D managers in big Pharma lost their jobs, because failure in Pharma R&D was not tolerated[1]. Those managers brought in to replace the old guard decided that the first best strategy was to find out what the most successful companies in other R&D-intensive industries were doing to keep innovation growing. The underlying management goal of driving growth through technological, sustaining innovations did not change. What changed was an almost frenzied race to implement the latest thinking in R&D innovation, gladly supplied by the major management consulting firms.

Strategic Management Today
As management consultants are wont to do, they recommended and oversaw implementation of a host of strategic and operational changes designed to ease Pharma’s productivity pain. Many things were being tried, sometimes many things simultaneously in a single organization. The problem was not that Pharma tried (and continues to try) many different approaches to solve their perceived productivity crisis. The problem was that, almost uniformly, the approaches were tried without sound evidence or clear rationales to support their implementation.

Following implementation of organizational changes, operational tactics or underlying strategies, results were sought quickly to determine if changes were having their desired effects. They weren’t the measures that signaled the crisis to begin with, like return on R&D investment or even gross output of new products into the market. Those measures would take years before decision-makers could react to them. So, instead, surrogate measures of R&D productivity were created, metrics that were believed, but not proven, to predict improved R&D return-on-investment. The amount of evidence supporting such beliefs was, in most cases, minimal.

The above scenario remains the norm today. Consultants and the managers they serve tout their transformational methods and results without the rigorous evidence scientists have come to demand from their own work.

The Challenge of Using Evidence to Support Innovation-Management Strategy
If pharmaceutical R&D managers have learned anything new about clinical science in the last few years, it’s that observational studies involving human actors (either individuals or organizations) under the best of circumstances are biased with respect to any given outcome in uncontrollable and oftentimes unpredictable ways and, when considered individually, are incapable of reliably associating cause and effect. Observational studies of business practices, which are subject to similar biases, almost never represent the best of circumstances.

R&D managers likely react to unsubstantiated management advice for three reasons: (1) because that is what they have been trained by example to do, (2) because it is what they think they must do in order not to become scapegoats for the failures of their organizations to flourish subsequent to change and (3) because they think that heuristics (i.e. mental short-cuts and rules of thumb) that provide for sound decisions in the near-absence of strong evidence will suffice in these circumstances[2]. I contend that each of these three reasons represents an abrogation of responsible leadership. If there is no hope for rational thought based on empirical evidence to drive strategic decisions in Pharma R&D, then there is simply no hope.

Whether innovation strategists feel compelled to accept unsubstantiated strategic advice out of habit or fear, or whether they are lulled into it because of cynicism bordering on fatalism, the situation must change if innovation strategy is to become more rational and less emotional…more skillful and less chancy…more orderly and less chaotic.

Applications of the Scientific Method in Management Strategy Development
All scientific theories are fundamentally judged on their soundness by their adherence to at least three major principles:

• testability (i.e. a scientific theory must be subject to being disproved),
• predictability (i.e. a scientific theory must repeatable and capable of being predictive),
• interpretability (i.e. a scientific theory must be explanatory and capable of determining cause and effect relationships)

These principles are therefore underpinnings of the scientific method—the collection of principles and practices used to generate and test hypotheses and develop them into theories. The scientific method seeks to describe the objective truth of a phenomenon. It relies on empirical (i.e. observable) evidence to support this truth. Must an experimental approach be taken prior to every major tactical or strategic decision? No, of course not. The types of controlled, bias-limiting, hypothesis-testing experiments we love in the natural sciences are nearly always impractical or impossible in the management sciences. Managers must rely on the powers of observation, deductive reasoning and inductive generalization to form strategy. Implicit in this process is the creation of mental models. Read the rest of this entry »

“It appears that Sen. Schumer is criticizing us because he says that our prices are too low. That’s a new one,” said Ian Spatz, Merck’s vice president for public policy.

Well, no, that’s not why Sen. Schumer is criticizing the deal between Merck and UnitedHealth Group, which places branded Zocor in Tier 1 (lowest) co-pay and Teva’s impending generic simvastatin in Tier 3 (highest). And it’s not why he has called for an FTC investigation of the deal. He is criticizing the deal, as any reasonable person will understand, because Sen. Schumer suspects that UnitedHealth and Merck have entered into an arrangement that gives Zocor a favored co-pay status in exchange for something besides just a really good price on Zocor. He is concerned that a deal that favors an innovator over a generic on anything other than a level-playing-field basis will do great damage to the incentives for generic manufacturers to be the first to bring a new generic to market.

If Merck has simply entered into a one-off agreement with an insurer, under which they are offering Zocor at a genuine discount to the generic, then more power to them. I think it’s a tactic worthy of a trial that should benefit consumers and that perhaps will help Merck hold on to some profits that it would otherwise lose. But I also think a call for an investigation of the deal is not an alarmist response and is probably needed any time such a deal is made in order to allay understandable concerns of possible anti-competitive behavior.

Innovation is the new black, or so I read last week in BusinessWeek, where their new supplement IN (for INside INnovation) was unveiled. The supplement is flashy, edgy and nearly completely devoid of substantive content. The new black…indeed. Innovation is certainly “in,” there’s no doubting it. The cover of this month’s Fortune rag…er mag is enveloped in an ad for Fortune’s Innovation Forum in NYC, where you can learn how to “mobilize your company for new ideas.” No, seriously, you can, they swear. What anyone in Pharma will notice about this latest fascination with innovation, as if it were something new among R&D managers, is that all the popular mags completely discount Pharma and biotech innovation. For instance, not a single Pharma innovator makes the list of BusinessWeek’s 25 most innovative companies, nor IN’s 25 innovation champions.

Innovation, as it’s being served up to the masses, is also called “design thinking,” and ethnography is deemed the best way to commence design thinking. I don’t want to denigrate these efforts, even as I flame the popular media that exploits them and the executives who feed at their teat for the attention they believe they so richly deserve. I actually believe that design thinking probably has merit for many consumer products. But does it also have merit for Pharma innovators? Strangely enough, it does. In particular, design thinking embraces the concept of passive observation of consumers (one of the skills of the ethnographer). Pharma does a notoriously lousy job of trying to understand its products’ consumers, relying on almost exclsuively on techniques developed in the dark ages of “market research” to guide its product and portfolio priorities. No, Pharma’s products aren’t nearly as amenable to design changes as most consumed products. But they are readily susceptible to changes in development focus. Properly conducted, consumer research should iteratively feed into the development processes of Pharma.

Development innovation for Pharma based on the voice of the consumer….”It’s like how much blacker could it get? None. None more black.” (Nigel Tufnel)