The Big Red Biotech Blog

Is that All I Get for My $100 Billion?

 I saw reports in PharmaGossip and Fierce Biotech on a new study published in Health Affairs that says new drugs are becoming less and less effective against disease as judged by their relative effectiveness versus a placebo.  Wow.  This isn't good.

The Myth of the New .

The authors looked at 315 placebo-controlled clinical trials (across many diseases) that were published in 4 major journals between 1966 - 2010.  They found drugs in the 70's were 4.5x beter than a placebo, somewhat less than 4x in 80's, only 2x by the 90's and in the most recent decade only 36% better. In other words a steady decline and a suggestion of more and more incrementalism in development philosophy. When you consider about $100 B is spent annually on clinical trials, that ain't too good. 

Experts are uncertain why this may be the case.  Several explanations have been put forth:

• The low hanging targets were exploited in 70's and 80's.  Subsequent targets are more minor compared to root cause of the disease
• Patients who volunteer for clinical trials over time have become worse off, i.e. the really sick people volunteer in hopes of a cure because nothing conventional has worked
• Quality of data has improved over time so that new data better measure the true impact, i.e. the compounds are looked at more closely

Regardless of explanation, the effect does look real.  It should send shivers up the spine of developers as more and more emphasis going forward should be placed on comparative effectiveness research.  If drugs can't show clear benefits then one woudlexpect resistance by payers to using them. 

That would be bad for the drug industry certainly -- particularly given the high prices/revenues the new drugs bring in incrementally.

Posted by Bruce Lehr June 4th 2013.

The Outcomes Era

Here's another post on the importance of "outcomes" research in gaining acceptance for a new drug.  It quotes results from a new Camelot Management Consultants study -- where 60% of US and European companies agree outcomes research to show the effectiveness of a new drug is important in gaining acceptance --- yet disturbingly 30% say they don't plan to change the way the go about launching their products.

The Outcomes Era .

Camelot says new launches will have to have the following features:

• Aim at expanding the market not just take share
• Re-define therapy guidelines
• Develop smarter pre-launch activities, with more investment in early phases
• Have stakeholders awaiting product and its differentiating features at launch
• Win recognition for creating multi-shareholder value (i.e. patients, prescribers, payers)
• Adapt to changes in the environment during and after the launch

Posted by Bruce Lehr May 16th 2013.

 

Pharma Need for Adapting to Change

When I was a youngster, my father used to ask us kids in the family a question: Why did the dinosaurs go extinct?  It was an interesting question to us as we all loved dinosaurs and knew a lot about them.  Not long after the question was posed, possible answers started flying around -- an asteroid collision, more volcanic activity, disease, ice age (climate change), movement of tectonic plates, etc.  My father's response no matter the proffered answer was No, no, no, no and no. 

The RIGHT answer was -- Dinosaurs became extinct because they couldn't adapt to changing conditions.

PharmTech Talk » Adapting to Change.

I thought of that when I saw this post this morning.  It deals with the need of pharma and biotech companies to be able to adapt to the changing healthcare climate in order to survive.  The post points out that increasingly, it is not enough to get a drug approved by regulators. To thrive, you need to get the drug accepted by payers. 

As such, companies need to be attuned to Changing Conditions. What is the competitive standard of care out there at any moment in time?  If it changes, can you adapt your clinical trials in progress to examine relevant endpoints to the new standard?  Can you add a drug to a study in oncology, for example, if a new therapy is demonstrated using two or more drugs?

Bascially, you need to think about how to differentiate yourself from competitors.  Can you show enhanced safety, fewer side effects, greater efficacy, lower toxicity, or identify a patient niche where your drug outpeforms?  You need to be able to adapt on the run. 

If you can, you will be set up to thrive under the new conditions.  If not, you (or your therapy) may be the one who next goes extinct.

Posted by Bruce Lehr May 14th 2013.

Biotech Needs to Focus on Demonstrating Product Value

According to a recent Ernst & Young study, future success in launching and selling new drugs will increasing depend upon the Company's ability to "show value" for its product -- i.e. comparative effectiveness.  This recognizes the increasing reality that to be successful -- you don't only need regulatory approval (FDA, EMEA, etc) but also it is critical that you get 3rd party payer approval in a timely manner to support launch.  Otherwise, you can look forward to lagging sales -- which can lead to a dramatic collapse in stock price and threaten a "one-hit" wonder Company's very existence.  See Dendreon's Provenge as a poster child for this effect -- though there are others like HGS' Benlysta.

PharmTech Talk » Biotech Needs to Focus on Demonstrating Product Value.

Curiously, the E&Y study found that small and mid-size biotech's in particular seemed blind to this possibility.  While 94% agreed that it is “important” or “very important” for biotech companies to have a strategic focus on matters of evidence. most companies indicated that they are unlikely to undertake specific evidence-focused initiatives. Of the respondents who rated evidence measures as “important” or “very important,” 11% have added payer/reimbursement expertise to their management teams, 13% have brought such expertise to their clinical development teams and only 4% have included people with such expertise in their boards of directors. 

E&Y advised biotech companies to debunk any myths that are holding them back, stressing that the shift to evidence is happening faster than anticipated, and it will affect companies regardless of their size, maturity or disease focus

You know what they say about failure to learn from history and impending doom to repeat it? 

Posted by Bruce Lehr Apr 26th 2013.

Pharma Spending On Outcomes Research Rises

Pharmalot published a recent surveyconducted by Cutting Edge that looks at how much and how money is being spent by pharma companies on outcome research.  It used to be getting approved was enough. Now companies need to show their product actually does something better for patients in order to increase their chances of third parties paying for the treatments. 

Pharma Spending On Outcomes Research Rises // Pharmalot.

At the 50 largest drugmakers, spending levels average $7.5 million on outcomes research.  In the US, for instance, economics and outcomes research is typically being used to support 10 brands, although the 20 largest drugmakers are supporting nearly 20 brands, and the average spending per brand was $493,000.  Budget changes among all companies compared with 2011 rose 42 percent, but among those who are clearly spending more, increases rose by 66 percent, on average. Small drugmakers report the largest increases at 79 percent.

What happens if you don't do outcomes research well and don't get good third party uptake?  Looking at drugs like Dendreon's Provenge or HGS Benlysta might give some insight.............

Posted by Bruce Lehr Aug 24th 2012.

Towards Pharmageddon?

More salvo's in the battle over whether the "innovation crisis" in pharma is due to inherent difficulties and costs in bringing new drugs to market or whether it is caused by pharma companies choosing to pursue more "sure thing" me-too products. 

The pharma shoots-too-low crowd, Donald Light from the University of Medicine of New Jersey and Joel Lexchin from York University in Toronto, opines in the most recent British Medical Journal that the situation has remained the same for 50 years. The incentives for drug development are wrong and have skewed the behaviour of the industry.

They claim more is spent on marketing (25 per cent of revenues) than on discovering new molecules (1.3 per cent). Drug industry claims that the cost of bringing a new drug to market is £1bn and is unsustainable are exaggerated, they claim. Research and development costs did rise substantially between 1995 and 2010 by $34.2bn (£21.9bn), they concluded, but revenues increased six times faster – by $200.4bn.

Towards Pharmageddon? The last (lost) decade .

They add that up to 80 per cent of drug spending is used by the industry on promotion. The authors call for licensing authorities around the world to stop approving new drugs of little therapeutic value. They suggest large cash prizes should be awarded for genuinely new therapeutic agents in lieu of patent protection.

In a second paper, researchers from the London School of Economics in the UK argue that drug manufacturers should be made to demonstrate that their products are superior to existing treatments before being granted a licence, rather than, as now, superior only to a placebo.  In other words, comparative effectiveness should be used to justify adding new drugs to the approved menu. 

With regard to magnitude of costs/profits, I believe the truth lies somewhere in between.  Drugs do cost a lot to discover and bring to market.  But drugmakers do spend on lot on marketing to justify me-too drugs -- and could channel some of this toward developing more novel therapies with better patient benefits. 

I suspect we will see a coorection as more regulatory and 3rd party payer incentives are put in place toward getting novel drugs to treat unserved diseases.  Economics is going to prevent us from continuing down the me-too route as these drugs increasingly will find it toughter to gain approval and to get reimbursement consideration. 

Do we really need 17 beta blockers or just one new Alzheimer's drug that actually works?

Posted by Bruce Lehr Aug 8th 2012.

Bio Drug World is a Changin'

Nothing Earth-shattering here by any means, but a couple interesting reads in the blogs by Derek Lowe (via Matthew Herper) and an article by Luke Timmerman dealing with CHANGE in the world of drug development and commercialization.

The Herper/Lowe, piece to a degree, laments that the heads of drug companies may not value the "human capital, i.e. scientists" involved in the drug discovery process.  And as the economic gap widens between the number of new drug approvals (bringing in much needed revenue) and the high cost of developing and marketing new drugs -- well at present it looks like R&D scientists are paying for it with their jobs. The observation is made that maybe this isn't the best strategy to employ in a research/discovery driven business.  Nevertheless, there is also a hard economic reality and SOMETHING different clearly has to be done -- as the current model isn't sustainable any longer.

The Timmerman piece talks about some of the changes that are taking place on the commercialization of drugs that contributes to lower sales and higher costs - exacerbating a potential need to cut R&D staff (though that response is a choice).  On the comercialization side, it is not good enough to just get your drug to the market anymore.  You actually need to show it meets an unmet need and quite frankly works better than exisiting alternatives -- otherwise me, you, the insurance companies and the government don't want to pay for it. The whole concept of "comparative effectiveness" is bringing a new discipline to drug development -- and sets a higher bar too.

The two articles demonstate the World has changed.  An for an industry to survive in response to meaningful change -- it has to adapt or head for extinction (in this case layoffs or ceasing to exist as an independent business).  It has always been thus.  Just not in the (bio)pharma industry up till now.

Posted by Bruce Lehr Apr 2nd 2012.

 

Supporting Orphans Can Be Expensive

 

This post is courtesy of PharmaGossip. It details the 11 most expensive drugs in the USA for an annual prescription.  Not surprisingly, these are all Orphan drugs and mostly biologicals -- aimed at serious genetics diseases that effect relatively small populations.

 

The 11 Most Expensive Medicines in America - Medical Billing and Coding Certification .

Without further adieu, I will just list the top 10 drugs in descending order from most to "least" expensive.  See the article for more information on what conditions these drugs treat.

1. Soliris $409.5 K
2. Elaprase $375 K
3. Naglazyme $365 K
4. Cinryze $350 K
5. Folotyn $300 K
6. ACTH $300 K
7. Myozyme $300 K
8. Arcalyst $250 K
9. Ceredase/Cerezyme $200 K
10. Fabrazyme $200 K
11. Aldurazyme $200

As I indicated, all of these conditions are extremely serious.  The drugs make life or death differences in many cases and certainly make huge impacts on quality of life for many patients. I'm sure the patients are glad to have the drugs regardless of costs.

It is also evident why Orphan Drugs have become attractive to a struggling pharma industry as relatively big sales and good profits can be made from drugs that treat fairly small patient populations.  It was an impetus that caused Sanofi to buy Genzyme (makers of #7, 9, and 10 on the list).  It also sells Aldurazyme in partnership with BioMarin (who also makes Nalazyme). You can see that Genzyme has built a very lucrative Orphan franchise.

Based on competitors comments, this field is likely to become more crowded in the coming decade not less.

NOTE: Fierce Biotech reminds us that Vertex's CF drug Kalydeco ($294 K ) approved this week cracks what is now the top 12.

Posted by Bruce Lehr Feb 7th 2012.

 

 

Senators Unleash Lipitor-rent of Letters to Question Pfizer Plan

Three US Senators have written Pfizer over concerns that its unusual program with health plans and pharmacy benefits managers to block generic versions of its best-selling Lipitor cholesterol pill moves will increase costs for government health plans and others.   

Senators Probe Pfizer Plan To Block Generic Lipitor // Pharmalot.

Pfizer's move, aimed at retaining hundreds of millions of dollars in Lipitor sales over the next several months, has angered the Senators. “Consumers and taxpayers foot the bill when drug benefit companies and insurers manipulate the marketplace to prevent access to generic drugs for millions of Americans,” says Herb Kohl, a Wisconsin Democrat who heads the Special Senate Committee on the Aging - in his usual inflammatory rhetoric about such things.

In their letter to Pfizer Ceo Ian Read, the Senators reiterate concerns expressed by some pharmacies that the pharmacy benefits managers may pocket discounts offered by Pfizer, but Medicare and employers will pay the full freight.  The PBMs deny that this will occur.

A Pfizer spokesman adds: “The Senators’ letter is based upon an earlier article that contained incomplete and incorrect information about our Lipitor programs. We want the public to understand the facts. Our intent is to offer Lipitor to payers and patients at or below the cost of a generic during the 180-day period. As a result, patients receive Lipitor at co-pays comparable to generics.

As Pfizer says, "Trust us".  It's not like we've paid billions in fines for off label marketing, price fixing or other unethical marketing programs in the past is it?

 

 

Posted by Bruce Lehr Dec 1st 2011.

All Dendreon All The Time

I'm just going to group a series of Dendreon tidbits on several topics into a single post.  It's All Dendreon All the Time around here.

First, Dendreon reports that its last facility in the US, in Atlanta, has now received FDA approval for the manufacture of Provenge.  This completes Dendreon's network of three US facilities -- the other two beng in New Jersey and Los Angeles. The scale up into all three facilities had been touted as being critical to the company's growth plan with Provenge.  However, recent events have shown that issues surrounding physician acceptance and reimbursement are equally important to establishing the product's sales trajectory.  In its last earnings announcment, Dendreon retracted its sales forecast of $350 - $400 million in 2011. See Xconomy.

Picking up on the physician reluctance to prescribe issue further, the Pharmalot blog continues with a report detailing physician anxiety with the product.  Several factors were cited as inhibiting use of Provenge:

• 68% of oncologists and urologists (N=101) the survival benefit was too low at 4.1 months and needed to be at least 7 months.  30% wanted at least 1 year.
• 68% also reported that they thought they would have problems with reimbursement - at $93,000 a pop even 1 patient not receiving reimbursement was viewed as trouble
• Provider education gaps and the novel nature of the treatment itself were also a barrier and was cited by 41% of the docs
• 68% also cited the co-pay for their patients as a major concern

The triple whammy going here is that docs don't know how to use yet, would like to see better survival benefit and worry about being reimbursed for an expensive treatment.

Finally, firmly in Dendreon's court, we have a report from Seeking Alpha decrying the misinformation out there surrounding Provenge.  The report, written by Saul Kerpelman,  says Provenge produced the "largest median survival advantage EVER" in hormone unresponsive prostate cancer patients.  The post further explains median survival benefit and its meaning. 

Provenge's 4.1 months median survival benefit means that 50% of the men in the clinical trial who received Provenge lived 4.1 months longer than 50% of the men in the non-treatment group.  So half the men in the non-treatment group died 4 months earlier than half the men in the Provenge group.  But, Provenge also reduced risk of death by 22.5% and increased 3 year survival by almost 40%.  So many men went on to survive much longer on Provenge. Provenge had 38% more men make it to three years.  So the statement that Provenge "extends life on average 4 months" is wrong.  And it is equally wrong to say that $93,000 buys you only 4 months. Provenge may give you many more years of life and with fewside effects compared to standard treatments.

Kerpelman says Dendreon needs to hire new PR to challenge erroneous and misleading media reports AND do a lot more on the physician and patient education side. Medicare already fully reimburses for Provenge and just issued a Q code (to speed reimbursement) in July. Better education as to benefit will fix the slow adoption rate.

Posted by Bruce Lehr Aug 30th 2011.

 

 

 

 

More Insurer Trouble for Provenge in Near Term

A new survey of insurers conducted by Reimbursement Intelligence indicates that Dendreon's Provenge is likely to face flat uptake over at least the next 6 months.  Cited reasons for this stem frm both physician and insurer perceptions about the new higher priced cancer drug.

Most Insurers Say Provenge Use Will Remain Flat // Pharmalot.

Physicians responding to the survey indicated low prescribing rates due to:

• Limited clinical value 
• The drug's high cost
• Lack of qualifying patients
• Smaller number of centers willing to administer Provenge
• Stricter utilization policies
• Complicated treatment regimen

Insurers for the most part indicated a willingness to reimburse for the drug provided it was being utilized on label. Although, some industry observers indicate that 3rd party payers may be using more stringent criteria to determine reimbursement than Medicare requires.     

This survey would seem to validate that Provenge is going to have a tougher time breaking into the market than perhaps first expected -- until it can establish a clinical record.  Of course, slower uptake will increase the time to establish a record. Based on this, it seems rationale that Dendreon backed off its bullish forecast but of curse raises the question as to why it was so bullish in the first place.  Regardless, it's clear Dendreon management has its work cut out for it.

 

Posted by Bruce Lehr Aug 25th 2011.

 

Roche to Receive Early Approval for Melanoma Treatment

Reuters reports that Roche's experimental melanoma drug vemurafenib appears headed for an early approval by the FDA, well ahead of its scheduled November 11 date. The agency is apparently encouraged by some dramatic evidence that the drug significantly cut the risk of death versus chemotherapy.

Vemurafenib, which will be named Zelboraf on the market, is likely to join a roster of new cancer drugs to gain FDA approval. Others include Bristol-Myers Squibb's melanoma drug Yervoy and J&J's prostate cancer therapy Zytiga, and Dendreon's Provenge also for prostate cancer.  Peak sales of vemurafenib have been estimated at more than $700 million a year.  See Fierce Biotech.

The Pharma Strategy blog notes that Roche and BMS, the manufacturers of ipilimumab (Yervoy), have now met to discuss and finalize the much anticipated combination trial of Zelboraf and Yervoy.  It will be interesting to see if the combination will extend survival even further in patients with the BRAFV600E mutation.

Yervoy was launched recently with a $120K price tag for four infusions.  Sales are apparently were good in Q2.  It is given as a 3mg infusion every three weeks for 4 cycles, over a 3 month period.  It will be interesting to see what the Zelboraf monthly price will be, assuming it successfully garners approval.   Should the combination work out in the future, the cost of treating metastatic melanoma will likely become even more expensive despite only small incremental survival benefits. 

It will also be interesting to see how this expensive cocktail with relatively modest survival benefits will fare at this high cost - especially vis a vis Dendreon's Provenge.  The latter offers about a 4 months survival benefit at a cost of $93,000 per patient that is incurred in about 1month of treatment.  Dendreon has reported issues in getting physician's to prescribe the cost dense Provenge due to reimbursement concerns.  Will a Yervoy and Zelboraf cocktail surmount this hurdle?  If the cocktail does succeed, is that indicative of a better patient benefit or a better selling strategy to prescribers and third-party payers?

 

Posted by Bruce Lehr Aug 9th 2011.

Dendreon Exec Dumps Stock then Dumps Forecast Expectations

Dendreon announced that it missed its revenue target for sales of Provenge in Qtr 2 - selling $49.6 M versus a minimum analyst expectation of $55 M.  The company, specifically its CEO Mitchell Gold, backed away from its previously bullish forecast of $350 M to $400 M for the year.  Gold said that "we believe the launch trajectory will reflect a more gradual adoption of Provenge as physicians gain confidence in this positive reimbursement landscape." See Xconomy.

Unfortunately, with this more gradual trajectory, Dendreon said that it will need to lay off employees.  Pharmagossip (via Bnet) also reported that Gold sold about $1 M in shares between the time the earnings conference was scheduled on July 8th and today's announcement to analysts and investors.

 

Posted by Bruce Lehr Aug 3rd 2011.

 

The FDA, Avastin and Medicare

The FDA's expert panel says that Avastin is usually very effective against breast cancer and they can't endorse its use for that purpose.  Medicare says, not to worry, we'll pay for it. Huh? Isn't this the same Medicare that looked at whether or not it would reimburse for Provenge for nearly 1 year?  And that's for a drug that does meet its claims as far as I can tell.

I don't get it.  Presumably, Medicare was balking at Proveng's price tag ($93,000) and questioned cost-effectiveness before making its begrudging decision to provide coverage.  Now, we have an FDA panel of "experts" telling us that Avastin (and its $88,000 price tag) doesn't work too well for breast cancer patients and Medicare says we'll pay for its off-label use. It's spokesman says, "We often pay for off-label use of drugs, but not always."  So why this time for a drug that apparently doesn't work too often?

The Pharmalot blog suggests it is tradition.  That Medicare usually will cover indications for a drug - on or off-label - that are listed in compendia.  In this case, Avastin is listed as a breast cancer choice by the National Comprehensive Cancer Network (NCCN). Interestingly, 8 of the 33 members who consitute the NCCN breast cancer panel have ties to Avastin's creators Roche/Genentech.

So for now, it looks like Avastin whether recommended by the FDA's expert panel or not, will still be prescribed by physician's off-label when they feel it is appropriate and that Medicare will pick up the tab. Medicare does say that it will keep the situation under review as it evolves and "will consider its options".  See Pharmalot and In the Pipeline.

Posted by Bruce Lehr July 1st 2011.

 

 

Medicare will Reimburse for Provenge

More good news for Dendreon today as Medicare, after almost 1 year's consideration, announced it will reimburse healthcare providers who presecribe Provenge for the treatment of prostate cancer. The price for a single course of treatment is $93,000.

Medicare to cover prostate cancer drug - Boston.com.

The Centers for Medicare and Medicaid said Provenge is a "reasonable and necessary" medicine.  The agency will still accept comments for 90 days on the decision before making it final (finally!).  Medicare should issue a temporary reimbursement code today that will make claims easier to process -- within 30 days versus closer to 90 now.  See Xconomy.

This is all good news for Dendreon, its patients and investors as the company looks to make good on a forecast of $350 to $400 million in 2011.  All the more reason to be happy about its newest LA plant coming on line and its next plant in Atlanta expected in August.

 

 

Posted by Bruce Lehr July 1st 2011.

Pharma Lacks A Payer Perspective

This is an interesting article from Pharmalot that talks about the deal between Sanofi and Medco Health Solutions where the latter wil help design clinical trials in the future keepign the payers interests in mind.

Pharma Lacks A Payer Perspective: Epstein Explains // Pharmalot.

The move reflects a growing awareness among drugmakers that designing and testing a compound for FDA approval is no longer the only key hurdle to winning sales and market share. Medco will provide input on clinical trial design, help develop comparative effectiveness data and review usage of existing medications to improve patient adherence.

Bascially, the drug not only needs to work, it must represent some tanglible benefit over any drugs that precede it for a particular indication and it must be cost effective.  The bar has been raised and at least Sanofi is taking steps to enlist a partner in providing solutions at the trial design and executions phase to make it more market competitive -- which is a good thing.

 

 

Posted by Bruce Lehr June 26th 2011.

Insurance Stance and 17P further Undermines Makena Price

In follow up to the KV Pharmaceuticals and its pricing of the preemie drug, Makena, story -- the St. Louis Post Dispatch recounts today that insurers are actively choosing to bypass the drug in favor of one, known as 17P, compounded at the pharmacy.  The latter, 17P, costs about $15 per dose.  Makena is still priced at $590 per dose (down from $1500) despite the beating it took back when approved.

Centene Corp, which manages Medicaid services in several states, is encouraging physicians to go with the cheaper drug and helped them to procure it at lower prices. Since the FDA has refused to force physicians to prescribe the approved Makena -- the move by 3rd party payers towards 17P likely will force another price reduction for Makena.  The unusual FDA move by the way was supported by the American Academy of Pediatrics, the Amercian College of Obstetricians and Gynecologists, the Society for Maternal-Fetal Medicine, the March of Dimes and America's Health Insurance Plans.  Oops!

Through its bungling pricing decisions, KV Pharmaceuticals now sits with a coommitment for $200 million in licensing fees to Hologic, Inc for rights to Makena. Now it continues to struggle back from 2 years of trouble with the FDA during which time most of its products were subjected to recalls, three quarters of its staff was laid off, and criminal convictions were obtained among its management.  Maybe another set of reasons FDA is not sheltering the approved Makena?

Said Lori McLaughlin, a spokesman for the Wellpoint insurance conglomerate (also a provider of Medicaid services), "Drugs like Makena are one of the reasons for increases in health care costs. We'd like the manufacturer to reduce the price of the drug...so that it more accurately represents its investment in the product"  KV Pharmaceuticals did not invent or patent Makena, and outsources its manufacture.

KV by the way has several other women's health products awaiting approval in the FDA queue. We'll have to wait and see if they learn anything this second time around.......

Posted by Bruce Lehr May 1st 2011.

 

 

How Many Patients Would Switch To Generics?

According to the Pharmalot blog, Express Scripts says the answer is?  82%!

Yes. 82% of patients switched to generics last year as their price fell by 10.2% as compared to an increase in price of brand-name drugs by 9.7%. 

How Many Patients Would Switch To Generics? // Pharmalot.

What does this say about drug prices?  Patients and third-party payers prefer cheap drugs.  you can expect this trend to continue for any medications where a generic alternative is available.

But, you can also look at specialty drug sales -- which includes biologics for inflammatory diseases, MS and cancer -- where total spending increased by 19.6% last year.  This is indicates that there is a market for innovative medications (that work) and that payers will pick up the tab.

 
Posted by Bruce Lehr April 7th 2011.

Dendreon Shareholder Uprising (or Not) and 'Mammoth Potential'

Is there a shareholder uprising at Dendreon brewing?  Or not? According to a story from Xconomy, there is one afoot led by a disgruntled Kansas investor who'd like to see the Dendreon Board add one or too new memebers to represent the retail investor's point of view. 

To hear, Seeking Alpha's Saul Kerpelman tell it.  It would be great if Dendreon or perhaps most public companies added Board members to represent the little guy - but to say Dendreon is experiencing or about to experience a stockholder revolt is -- well -- Balderdash!

And two more articles from writers at Seeking Alpha aimed at propping up Dendreon's potential and hopefully stock price going forward - one claiming that Dendreon gives the rest of pharma "pipeline envy" as Provenge according to it can be a pipeline in and of itself through the various stages of prostate cancer -- not to mention that Neuvenge is following hot on its heels for various cancers including: kidney, colon, cervical, lung and breast.

The second SA article proclaims Dendreon to have "mammoth potential" from its impending Provenge sales over the next few years and states that concensus analyst estimates put the target value of the stock in the $55 range which would represent a 47% premium over where it is today. 

So who is an investor to believe?   Read and do your due diligence I always say.  Buy low, sell high, borrow early and pay late.

Posted by Bruce Lehr April 4th 2011.

CMS Rules for Provenge Reimbursement

The Centers for Medicare and Medicaid Services (CMS) have ruled that Dendreon's Provenge can be reimbursed for the treatment of prostate cancer. The approval came with no prohibition of "off-label" use despite its $93,000 cost per course of treatment.

Medicare Decides Provenge Can Be Reimbursed // Pharmalot.

The approval is good news for Dendreon and its shareholders.  It is also good news for patients who are being or will be prescribed Provenge.  The move by CMS was not expected as the decision mirrored the advisory panel recommendation of only 4 months ago. Provenge represents a novel therapy - is in fact the first therapeutic cancer vaccine -- so it is good to see it gain CMS acceptance at its high cost and its relatively modest (4 months) extension of patient survival. Hopefully, this will encourage the continued development of newer and better medications into the cancer therapeutic arena. See Xconomy report too.

 

Posted by Bruce Lehr March 30th 2011.

 

 

Cost Of Brand Name Drugs Keeps Rising

According to Barclays Capital, brand name prescription drugs rose 6.9 percent last year -- the highest ever since they began tracking drug prices in 2000. 

The Cost Of Prescription Drugs Just Keeps Rising // Pharmalot.

Some of the biggest "jumpers" are isted below:

• Daiichi Sankyo's Benicar 29.3%
• Novartis' Gleevec 20.9%
• J&J's Concerta 19.7%
• Pfizer's Lipitor 12.4%
• BMS' Plavix 13.2%

According to Barclay the trend seems to be continuing as price increases for Jan-Feb 2011 have averaged 8.6 percent for 65 of the top-selling 130 drugs.  These drugs account for more than 50 percent of the drug revenues in the US. 

Of course, Lipitor and Plavix mentioned above are about to lose their patent protection.  It would appear that Pfizer and BMS are trying to make hay while the sun still shines. A WSJ article notes that it may also be a case of the industry pushing back against government attempts at price controls.

Rebates for private drug plans averaged 14.3% in 2009 versus only 8.4% in 2002.  The health care law recently raised the minimum Medicare rebate from 15.1% to 23.1%.  But insurers say that price increases have still outpaced rebate increases.

 
Posted by Bruce Lehr March 17th 2011.

 

 

Lilly claims UK "Value-pricing" will Increase Costs and Bureaucracy

According to InPharm, Lilly's UK director of corporate affairs, Rick Ascroft, says that the government's planned 'value-pricing' model will increase costs and add bureaucracy thus delaying availability of new drugs to patients.  The UK government plans to replace the current PPRS pricing scheme with a value-based pricing (VBP) scheme – under which drug prices will be set according to the value medicines provide – in 2014.

In speaking to the Department of Health, Ascroft said, "While the goal of the system is to improve access, at least up front it may actually do the opposite."  Likewise, speaking at the Wellards health conference in November, Association of British Pharmaceutical Industry director general Richard Barker said: “Value-based pricing is thoroughly logical, but not a magic bullet,” and warned that this system would not necessarily bring drug prices down. 

Not a big surprise that Big Pharma would express concerns about a new policy that could help control pricing and upset the status quo.  Like everything else, I suppose, the devil's in the details of implementation for which we all have some sympathy.

 

 

Posted by Bruce Lehr December 6th 2010.

Dendreon's Provenge Passes Medicare Panel

Again, here's a post in follow up to Luke Timmerman's story yesterday regarding the impending CMS vote on Dendreon's Provenge.  As expected, Provenge was judged to offer clinical benefits for the indications that it was approved for by the FDA - namely as a therapy for late stage prostate cancer patients. 

Dendreon Passes Medicare Panel: Questions About Provenge Effectiveness.

Not surprisingly, off-label indications will not be approved (at its $93,000 price/patient) for reimbursement.  This news was expected and is good for cancer patients awaiting treatment with Provenge, and for Dendreon employees and investors.

 

Posted by Bruce Lehr November 17th 2010.

Provenge in "Moderation" = Medicare Coverage

As freshly reported in the WSJ Health Blog, the eagerly awaited Medicare analysis of the company’s cancer therapy Provenge found “moderate” evidence that the therapy can improve outcomes.

Leerink Swann analyst Howard Liang said in a research note that while the “moderate” characterization of the evidence “was not necessarily an outright endorsement, [the report] did not raise a serious challenge to Provenge’s benefit and concerns about imperfections of the trial design were well known.” The analysis doesn’t seem to offer a basis for restricting coverage to some subgroup of the patients for whom it’s been approved, he wrote.

That's all it takes in terms of an endorsement to send Dendreon shares up and to bolster spirits of prostate patients waiting on Provenge (at least from reimbursement angle). 

 

 

Posted by Bruce Lehr November 11th 2010.

More on Prostate Cancer News

 

The Washington Post this week wrote again about the Centers for Medicare & Medicaid Services review of whether the federal government insurance program will reimburse patients who receive Provenge -- and if so under what circumstances and for how much.  The national coverage review has been controversial since it was announced -- as patient advocacy groups for prostat cancer have repeatedly pointed out that Medicare is not supposed to take cost into consideration when determining coverage. 

As a reminder, Provenge was approved for use in late stage prostate cancer patients by the FDA in April. Provenge costs $93,000 per patient treated and on average is expected to extend survival by 4 months. Therefore, Provenge has a QALY (quality of life for  1 year) of $272,000 - the 4th highest among cancer drugs.  Drug companies and cancer experts are concerned that if Medicare makes an independent decision on which drugs will be used after FDA approval - it will effectively amount to a "second approval" that drug companies need to navigate.  This may cause drug firms to shy away from the cancer area with new innovative therapies. Private insurers tend to follow Medicare's lead so the Medicare decision can have a huge impact on a drug's availability based on the reimbursement policy adopted.

The counter argument is that society can't pay for everything and that choices need to be made.  The fear is that if we keep paying for high priced treatments with marginal clinical benefit (and we can debate what 4 months is worth to a dying man or woman), then we won't be able to afford health care. The debate rages on and the Provenge decision by Medicare needs to be closely watched.

 Fierce Biotech reports today that Bavarian Nordic is close to announcing that it's found a "big pharma" partner to fund phase III clinical trials for its prostate cancer vaccine called Prostvac.  Analysts have pegged Prostvac as a potential strong competitor with Dendreon's Provenge.  The Bavarian Nordic drug more than doubled Provenge's survival rate in phase II trials (only phase II though), and also bettered survival with J&J's abiraterone by 3.9 months on average. Bavarian Nordic may be able to cash in with a royalty stream in excess of 25% with its partner.  Bavarian Nordic has experienced a very tough revenue year so they could use the success.

 

 

 

Posted by Bruce Lehr November 9th 2010.