Pharma’s Cutting Edge

On June 29th, I discussed a story originally published in ClinPage that Pfizer was signing investigators to exclusive contracts.  The story was picked up by several blogs, and had the potential to become mainstream news (but didn’t).  After that post, I received a confidential note from a Pfizer employee indicating that the story was flawed; that, in fact, Pfizer was NOT asking clinical investigators to sign exclusive contracts.  I didn’t report on this email, as its sender asked me not to for some reason.  ClinPage has now “clarified” its coverage of the presentation made by Andy Lee of Pfizer at DIA (see Pfizer Site Strategy).  As they are now reporting, Pfizer did not attempt to get investigators to sign exclusive sponsor contracts but rather asked investigators who were not recruiting for a particular study to serve the study or the project otherwise (as an advisor, for instance).

A couple thoughts, first I’m glad for the industry that Pfizer is not using a risky sponsor-exclusivity arrangement to improve recruitment.  This aggressive strategy would have made them and, by way of association, the entire industry look mean and greedy–you know, like they look now, only more so.  Still…now that the idea has been floated, publicly without making headlines I wouldn’t be surprised to see another sponsor actually try it, particularly in a niche therapeutic area crowded with several sponsors.

The other thought is that we who blog, including this part of we, need to be careful how we write our stories that rely on second-hand reporting.  I wasn’t at the DIA to hear Andy Lee’s talk.  I relied on what someone else heard, and I didn’t properly caution readers to be skeptical of the controversial story’s accuracy.  My analysis of the recruitment strategy would have been the same, but the impetus for my analysis wasn’t accurate, and it’s doubtful that I would have ever written the analysis had the story not appeared.  In the future, I’ll wait for independent confirmation before propagating any first-person information coming from ClinPage.  I’ll likewise raise doubts about the accuracy of any story, from any source, whose subject matter is controversial and not independently confirmed.  I don’t hold myself out as a source of news, but I do want my readers to trust that my analyses are based on accurate descriptions of the state of affairs about which I’m opining.

It was bound to happen sooner rather than later, and Pfizer or GSK was likely to be the first to do it: create exclusive contracts with investigators I mean.  That would be your best enrolling sites.  Scared?  You should be. 

As reported by ClinPage from the annual DIA meeting last week, Pfizer’s Andy Lee let on that Pfizer has been signing exclusive deals with Pfizer’s best enrolling sites.  Either the sites will contract for studies only with Pfizer or they will not contract with Pfizer for any studies.  It takes chutzpah to make a move like that, but more than chutzpah it takes research volume, lots and lots of money devoted to clinical research.  Without the money to keep a site at capacity, or on the sidelines getting paid to be at less then full capacity, no company can hope to craft such deals.  Only the very largest research companies can afford this, and even the largest CROs will not be able to wrest a site from big pharma’s grip for the benefit of its more modestly sized clients.  Talk about a game changing situation.

As I say, it wasn’t hard to predict this move, I’m only surprised that it’s been going on for a while, and I hadn’t heard about it.  These things tend not to stay secret.  Why am I not surprised?  Because pharma development productivity, particularly in the later stages of clinical development, must improve to compensate for environmental pressures on sales and volume growth.  It must, or the industry’s entire business model is in jeopardy, and I don’t see the industry allowing its model to collapse without a good fight.

Despite some propaganda to the contrary, the workflow inefficiencies constraining overall development productivity are not widely appreciated, and no company has demonstrated that it knows how to improve productivity, however it is (reasonably) defined.  That said, it is likely that local operational inefficiencies, such as those confounding clinical study enrollment, are disrupting local process flows sufficiently to negatively affect cumulative study completion rate.  In other words, know one knows for sure, but it’s likely that decreasing the average time from protocol approval to final subject enrolled will ultimately decrease total development cycle time without diminishing the quality of development (i.e. the learning that accrues from doing studies), thus improving R&D productivity.  It’s also pretty clear that if you can find a way to contract with better performing (in terms of enrollment) sites more frequently, you are more likely to decrease this cycle time.  As Pfizer’s Lee noted in his DIA appearance, and is generally appreciated now, some investigative sites consistently enroll better than others, and it’s believed that they do so without diminishing the quality of research.  If you can lock these high-performing sites up, with exclusive contracts say, you’re more likely to increase enrollment speed than if you must compete for sites and risk losing high-performer to your competitors.

As far as I know, Pfizer is the first to try this all-or-none strategy.  I think other firms will wait to see how it shakes out before following their lead.  Although, as I say, exclusivity is the surest way of locking up the best performing sites, it’s also probably the riskiest.  A company the size of Pfizer doesn’t have to worry about not doing enough studies to keep a site busy–thereby wasting the premium it must pay to maintain exclusivity–but it does have to worry about frightening or angering the doctors that prescribe its drugs.  It’s easy to imagine that an investigator or research institution might wish not to engage in an exclusive relationship with a single sponsor:  Will it create a perception among patients, insurers, regulators, or professional associations that she is in the sponsor’s back pocket?  Maybe such thinking is reasonable, especially for academic sites.  Harmful perceptions aside, I would imagine that many high-performing sites will find such strong-arm negotiating tactics ridiculous.  After all, from the investigator’s perspective, it’s not as though research studies are hard to find.  It’s a supplier’s (investigator’s) market in developed countries by all accounts.  Why not hold out from such a deal, and let competition decide who gets the best sites?  If supply remains regionally and situationally constrained, as it is presumed to be, investigator grant payments will continue to increase.  Exclusive deals, unless very lucrative, will not benefit sites in these regions.  And perhaps no amount of money will satisfy some site’s need to work on the most promising medicines, regardless of who is developing them. 

This enrollment strategy absolutely is worth keeping an eye on.  If any investigators have signed such a deal with Pfizer or another firm, I’d love to hear from you.

I don’t usually recount major news stories without something to add to them, but I feel this one deserves all the press it gets.  Maybe shame will help provide the deterrent to these despicable acts that fines of this magnitude appear to lack. 

As reported by the New York Times and others, Purdue Frederick, parent of privately held Purdue Pharma will pay the 3rd largest fine for a fraud settlement in US history, some $600M.  Its top three execs at the time of the fraudulent sales activities of Oxycontin will pay a combined $34.5 million in fines for their role, although Purdue disclaims the direct involvement of its current and former execs, saying they: “neither engaged in nor tolerated the misconduct at issue in this investigation.  To the contrary, they took steps to prevent any misstatements in the marketing or promotion of OxyContin and to correct any such misstatements of which they became aware.”  Nevertheless, the fines resulted from guilty pleas on misdemeanor misbranding charges for each of three.

According to the Washington Post, $276 million will be forfeited to the United States, $160 million allocated to federal and state government agencies to resolve false claims for government healthcare programs and $130 million will go to resolving private civil claims.  Additional amounts will be paid to the Virginia Attorney General’s Medicaid Fraud Control Unit and the Virginia Prescription Monitoring program.

The fines follow a $19.5 million settlement Purdue Pharma made with 26 states and the District of Columbia this week over allegations it failed to adequately disclose abuse risks posed by Oxycontin. A civil case brought by its insurer was settled in June for $200 million.

Oxycontin was marketed without generic competition by Purdue between 1996 and 2004.  Prior to losing market exclusivity Purdue sold about $2B worth of the drug annually.  The roughly $855M in fines and settlements of allegations concerning fraudulent marketing of Oxycontin represents one year’s sales of the drug circa 2000. 

In a conference call that so stunned a Credit Suisse analyst he was left literally at a loss for words, Alexion Pharmaceuticals  yesterday announced that the annual average wholesale price in the U.S. for Soliris, its newly approved drug to treat the rare disease Paroxsymal Nocturnal Hemoglobinuria (PNH), would be $389,000. 

Wow.

Leonard Bell, Alexion’s CEO, was quick to defend the cost of the drug–interrupting another Alexion executive who started discussing acceptable cost-effectiveness ratios–by referencing the high cost of other therapies for so-called ultra-orphan diseases, such as Pompe (Myozyme, Genzyme) and Hunter (Elaprase, Shire HGT).  But the costs he cited for these drugs (”over $400,000″ and “over $800,000″ annually) appear to be inflated figures, even when considering weight adjustments for adult patients.  Generally speaking, the top end cost for drugs that target around 10,000 patients globally is under $300k a year.  So Alexion seems to be exploring new price territory here. 

This story is sure to be fodder for the WSJ (who more than once roasted Genzyme for their pricing) and, more importantly, for a newly Democratic Congress with drug costs on its mind.

But patients apparently need not worry about the high cost of Soliris.  Alexion, as they reiterated at least five times on the call by my count, has a goal ”that every patient who can benefit from Soliris will have access to Soliris.”  Not the snazziest marketing message, but at least it’s reassuring to patients.  Isn’t it?

The following letter was written by me in response to David Nathan’s February 1st Perspective in the NEJM entitled: “Finding New Treatments for Diabetes: How Many, How Fast…How Good?”  (Subscription req.)  In this essay, Nathan argues that “FDA’s approval process for new antidiabetes medications should take into account their additional and unique contributions, especially when their glucose-lowering efficacy is similar to or less than that of currently available medications.”

In essence Nathan questions the wisdom of allowing approval of new drugs (for chronic diseases, like diabetes) that have not been demonstrated to be better than existing drugs.  My response offers a scientific reason why regulators should not have such discretion; unmade economic arguments are at least as compelling.

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Dr. Nathan throws light on the subject of hurdles for drug approvability in the U.S. Although his arguments are specific to drugs used to treat Type 2 diabetes, the points raised are germane to a number of chronic disease states, where multiple drug classes are currently in use.  Under current U.S. law, FDA lacks authority to restrict approval of new drugs because they might be deemed unnecessary, no matter in whose judgment.  It is a mistake to believe that putting such authority into the hands of FDA today is wise, for the simple reason that traditional pre-marketing studies of new drugs, such as those cited by Dr. Nathan, are incapable of determining which individual patients will or will not benefit from use of drugs.  Rather, these studies aim to show average effects in populations selected to be representative of users; they ask general safety and efficacy questions and yield general guidance only.  Many hope that future pre-marketing approval studies that incorporate highly predictive markers of risk and benefit (i.e. personalized medicine) will allow regulators to tailor approval decisions to specific subsets of patients, but until then it remains for doctors to perform the “N of 1” experiments needed to determine whether a drug benefits an individual or not.  A system for capturing results emanating from these large number of experiments is sorely needed.  In the meantime, clinicians considering prescribing new drugs for conditions like Type 2 diabetes should demand comprehensive monographs from manufacturers that include all relevant preclinical and clinical information.