The Big Red Biotech Blog

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.

Supremes Hear Oral Arguments in Myriad v. AMP? Or do they?

I've written about this before, but wouldn't it be nice if the arguments presented before the Supreme court in a potentially pivotal patent eligibility definition case like Myriad, actually contained discussions of science to illustrate the Law? 

We're trying to discern whether isolated DNA should be patent eligible or not.  OK.  Then why do we have to resort to analogies like if the DNA were a tree, sap from a tree, chocolate chip cookie, baseball bat, or a liver or kidney? Huh?  Why can't we discuss isolating and replicating a DNA sequence from say .... DNA?

I know we are science challenged as a Nation at least across the population as a whole -- but you'd think we'd have the ability to discuss the science and that Supreme Court justices could have access to ANY experts that they wished to explain basics to nuances of what was being presented.  I'm not arguing that arcane jargon should be the basis of oral arguments but can we do a bit better than comparisons to baseball bats and chocolate chip cookies?  See Patent Doc blog.

Posted by Bruce Lehr Apr 19th 2013.

Obama Budget May Cause Big Pharma to Take Its Own Pain Meds

PharmaTech Talk reports what's in the new FY 2014 budget proposal that's in favor of Big Pharma?  Not much apparently.  First off, it appears FDA will be losing more money for drug oversight.  Any added resources they will get will have to come from pharma user fees, i.e. they will pay as they go.

Pharma will also be asked to pay for more of the Medicare drug benefits, especially to help the government close the Medicare Part D "donut hole".  The proposal is for pharma to increase discounts from 50% to 75% in this category -- which should cost them about $11 B over 10 years.

What else is in the grab bag?  Well, under Medicare Part B pharma will be asked to to accept a reimbursement rate of ASP plus 3% instead of the current 6%.  This will cost them another $9 B over 10 years.

Obama also proposes to extend Medicaid drug rebates to Medicare dual eligibles.  This should cost pharma $3 B more next year and a tidy $142 B over 10 years.  Couple this to a ban on pay-for-delay and ring the cash register to the tune of another $740 M next year and $11 B over 10 years. This is suppposed to increase generic drug use.

Further, there is a proposal to cut the exclusivity period for biosimilars from 12 years to 7 years.  That's expected to be worth $3 B in savings.

Add it all up.  Looks like potentially $176 B over 10 years.  Put that in your patent cliff and smoke it! Then take 2 aspirin and call me in the morning.

Posted by Bruce Lehr Apr 17th 2013.

WLF Backs Abbott's Citizen Petition to FDA on Biosimilars

Here's an update from the Patent Doc blog.  It details the Washington Legal Foundation (WLF) comments on Abbott's Citizen Petition to FDA regarding its policy on approval of biosimilars. Regular readers of this blog will have seen previously that Abbott asked the FDA to not share any of its BLA filing information on Humira or any other manufacturers filing on their drugs that were submitted to the agency prior to March 23, 2010 when looking to approve a biosimilar.  The March date being when BPCIA was enacted into law.

Abbott's argument is that to share the information with a competitor would constitute the government taking its valuable trade secrets, which Abbott had every right to expect would be held confidential when filed, without just compensation to Abbott.  This would constitute an infringment by the goverment of Abbott's rights under the Takings Clause in the Fifth Amendment.

In short, WLF agrees with Abbott. WLF says while the government has the right to enact biosimilar legislation in part to help reduce the costs of biological drugs which in turn might decrease the profits of innovators ...it doesn't have the right to do so by taking private property (e.g. taking information from a BLA filed before the biosimilar law existed).   On balance, WLF argues that such appropriation of private proprty is more harmful than any benefits one might see in having biosimilars on te market from such an action. Some companies should not bear a disproportionate burden of costs to benefit the public which should be borne by the public as a whole.

So far other groups have weighed in against Abbott as well. These include the Generic Pharmaceutical Association (GPhA), Therapeutic Proteins International LLC (biosimilar's manufacturer), and Zuckerman Spaeder LLP (litigation firm). 

We haven't heard the last of this.  I expect to see this in the Supreme Court someday.

Posted by Bruce Lehr Mar 8th 2013.

EC Funds up to 200 New Rare Disease Drugs

Fierce Biotech reports this afternoon that the European commission has pledged $187M in new research funds aimed at helping develop up to 200 new drugs for rare diseases by the year 2020.  Rare diseases have become a popular target these days for drug makers so the uptake of the R&D in these projects should be good. Part of the popularity with developers is that these drugs can take a more streamlined path in clinical trials and with regulatory approval.  Another popular feature is that these drugs often command among the highest prices per patient in the biotech world.   

It's ironic that the previous post talks about Express Scripts latest analysis of drug prices. The so-called Specialty category experienced an 18%+ growth rate last year and that is expected to continue. Drugs to combat rare diseases typcially fall squarely in this category as well.  So these drugs while provided needed therapies for the afflicted will tend to further exacerbate the financial and issues that 3rd party payers and governments are grappling with. 

It's further ironic to me that many of the groups that advocate for the development of more rare disease drugs -- which have been historically neglected -- tend to also be the first groups that raise objections to ultra-high prices these drugs often command. Therein lies the rub.

Posted by Bruce Lehr Mar 5th 2013.

India Rejects Bayer Appeal On Compulsory License

India's Intellectual Property Appellate board rejected Bayer's appeal fighting a compulsory license to its drug Nexavar.  The license was granted last year to the generic manufacturer Natco when authorities determined that Nexavar cost to much for Indian consumers -- patents or no stinkin' patents.

India Rejects Bayer Appeal On Compulsory License // Pharmalot.

Needless to say, Bayer was not impressed.   “The order of the Intellectual Property Appellate Board weakens the international patent system and endangers pharmaceutical research,” the Bayer (BAY) spokesman writes.

Consumer advocates on the other hand were dancing in the streets.  “The decision confirms that the Indian patent office is able to use all the means legally at its disposal to check the abuse of patents and open up access to affordable versions of patented medicines,” says Leena Menghaney, the access to medicines campaign manager in India for Medicins Sans Frontierers, also known as Doctors Without Borders. “Most importantly, the decision means that the way has been paved for compulsory licenses to be issued on other drugs now patented in India and priced out of affordable reach.”

This can't be good news for multi-national pharma companies in India if the decision stands -- not unless they want to drop prices by 90%.  Ouch!  Certainly, there appear to be disincentives developing for Western companies to introduce new drugs to India if their patents are not to be respected. 

Posted by Bruce Lehr Mar 4th 2013.

India May Drop Compulsory Licenses Based On Price

Does it really matter?  It appears that India will no longer issue compulsory licenses to generic or biosimilar manufacturers to make a patented drug based solely on whether that patented drug's price is perceived to be too high.  Good news for the multi-nationals right?  They seem to think so.

India May Drop Compulsory Licenses Based On Price // Pharmalot.

Instead India has set up a new Committee to set pricing for patented drugs by comparing to prices negotiated between manufacturers and governments in US, Canada, France, Australia and New Zealand.  The thought seems to be this comparison will lead to higher prices than what consumer advocates in India would like to see but less than what pharma companies would charge on their own, but woud still be acceptable to these same companies.

But....the Committee would take per capita gross national income (GNI) and purchasing power parity in these countries into account.  The ratio of GNI in comparison country/GNI in Indiawould be calculated and used to adjust the price of the medicine for India from that of the comparison country.  This adjusted price would also serve potentially as the starting point for future reductions.

Ok. No compulsory licensing. Yes to a Pricing Committee.  What if they price products lower that what pharma is expecting?  Are we back where we were?

Posted by Bruce Lehr Mar 1st 2013.

High Drug Pricing Next Industry Challenge?

The good news from 2012 might be that more drugs were actually approved (39) than in the very recent past -- but the bad news is that many were VERY expensive.  Xconomy's Luke Timmerman did a nice piece summarizing this a couple of days ago.  It seems that many of the very high priced drugs are coming into the oncology and "rare disease" or orphan arenas.  Many of these drugs carry price tags into the serious 6 digits and are $300K or more annually.  Is this sustainable?  Are any of these products worth it?

Those are questions that the industry must face as healthcare systems around the world struggle with costs.  Individual patients oft times may have to struggle as well depending on what type of insurance coverage they carry.  And even in the industry, some players must worry that the action of their peers might be in danger of killing a golden goose if these prices are perceived publicly -- even by physicians -- as being out of line with reality. 

What's a drug worth?  One answer might be what the market is willing to pay.  But will that number change as government and other third party payers become budget constricted. Yes, is the obvious answer.  From a payers perspective, they want a price that they feel is commeasurate with the benefits that are received.  Same from a patient's perspective, I hope.  Do I feel I got my money's worth in terms of improved health or quality of life? 

There is no doubt that this issue will not go away. 

Posted by Bruce Lehr Feb 13th 2013.

New Drug Approvals in 2012

Here's a quick piece from CEN-Online that overviews and discusses the 39 new drug approvals by FDA in 2012.  The good news is that we have seen a 2 year trend now where more drugs have been approved than in the recent past.  This may say that changes being made to R&D departments throughout the industry are starting to have an effect but more than likely it is too early to make such a statement -- however at least the trend is "good". 

It does appear that the relationships between FDA and the drug companies have improved and there is better information sharing and collaboration.  A troubling trend has been developing though with pricing and this may be the next hurdle that needs to be addressed in the industry and among goverments and payers -- not to mention patients and physicians.

Posted by Bruce Lehr February 13th 2013

 

Big Biotech Influences Biosimilar Legislation at the State Level

Fierce Biotech reports this morning that Amgen and Genentech (parent Roche) are starting to expend noticeable energy on influencing biosimilar legislation at the State level.  In particular, both companies are trying to make it difficult to for a biosimilar achieve regulatory interchangeability with the reference product.  This would prevent pharmacists from just switching to a new biosimilar without consulting with a prescribing physician. At the Federal level, both companies are also lobbying to prevent a biosimilar from having the same generic name as the branded product. In both cases, these efforts raise more hurdles to easy substitution.

Of course, if you were a shareholder of either company, and of Big Pharma companies in general, you'd be infavor of them competing however they needed to in order to maintain profitability as long as possible by preventing easy biosimilar competition. Patients, thrid-party payers and the government may have different ideas when it comes to saving money on drug costs.  In the small molecule world, generics have already shown their ability to liquidate the sales and profits of blockbuster drugs coming off patent in a mere matter of months.  The Big Biotech's would like to slow this down considerably in the case of biosimilars.

 Right now, they are doing this by raising possible safety questions and challenging interchangeabililty attempts before the biosimilar competition gets entrenched. Of course, some of these companies are playing both sides of the fence -- they don't want to copy their own drugs but do copy the drugs of others.  We'll have to see how this plays out.

Posted by Bruce Lehr Jan 25th 2013.

States Are Crafting Biosimilar Laws

This is an intersting post from Pharmalot.  As we know, FDA has not approved any biosimilars yet and have not determined whether a biosimilar could be interchanged or substituted for the original biological.

Never Mind FDA, States Are Crafting Biosimilar Laws // Pharmalot.

Don't let that be a deterrent.  Six States so far -- including Illinois, Pennsylvania and Virginia -- are already crafting bills that would allow substitution or interchangeability (if FDA says OK).  Can't be left waiting in the gate can we?  This is what makes America great!

Posted by Bruce Lehr Jan 18th 2013.

Breakthrough Therapy Designation

In the fifth renewal of PDUFA, section 902 authorized a 'Breakthrough Therapy Designation' to speed regulatory review and (potential) approval of drugs that offer "substantial improvement over existing therapies on 1 or more clinically significant endpoints such as substantial treatment effects observed early in clinical development". 

When a application is submitted, the agency has 60 days to grant 'breakthrough' status or not. If 'breakthrough status' is designated, then the applicant can collaborate closely with the FDA on trial design for the intended patient populations reflecting the most up to date thinking on design.  A quick approval provides potential huge benefits to not only target patient populations but to the company sponsor itself - it could have a tremendous impact on economic state of smaller companies. This could give shot to investors as well with a more predictable pathway and shorter timelines to commercialization.

Thus the door is opened to the FDA for another accelerated approval pathway. The agency is encouraging applications. Said Janet Woodcock, "...We're excited about it.  In fact, although the law is only a few months old, we're already putting it to use. Recently, we identified the first therapy (Vertex's Kalydeco for some CF patients) to this special designation. And it likely won't be long before we have more..."  See Xconomy.

Posted by Bruce Lehr Jan 15th 2013.

India Bringing Drug Price Controls to the Plant Level

The Indian Government seems to be going overboard in its efforts to control drug prices.  They are apparently not content with only compulsory licenses, patent rejections, biosimilars incentives, anti-gouging measures, abolishing brand names and even arm-twisting by their Supreme Court -- now they want to have inspectors visit manufacturing plant to assess production costs.

NPPA to inspect Indian drug plants as part of pricing role.

Drug marketers must be pulling out their hair there.  Marketing 101 says you should price your product or service based on its value to the market -- not on production costs. Egads!

Instead, the National Pharmaceutical Pricing Authority (NPPA) will visit manufacturing facilities to look at things like yields, capacity utilization, maintenance of plant and machinery, cost of raw materials, R&D expenses, plant expansion and machinery replacement. The NPAA will up its oversight from 74 bulk pharmaceuticals to 348 bulk drugs.

The underlying motivation seems to be an "effort to get drugmakers to justify the prices they charge for products based on production costs." Double Egads! Wonder what drug company investors and shareholders think of that?

Anyone still think India is really lucrative new drug market for the MNCs to enter? Volume basis maybe, but what about margins?

Posted by Bruce Lehr Nov 8th 2012

Whip Comes Down on MA Pharmacy Board Chair Over NECC Mess

MA state health officials fired Jim Coffey, state pharmacy board chairman, and suspended board attorney Susan Manning in the wake of the New England Compounding Center scandal.  Not only have more than 400 people been sickened with over 30 deaths, but apparently these too ignored a complaint in July from the State of Colorado over NECC activities. 

Pharmacy Board Chair Fired Over Compounding Flub // Pharmalot.

Not only didn't the Pharmacy Board fail to investigate but they failed to pass on existence of the complaint to their bosses at the Department of Health.  OOPS! It's one thing to kill people -- it's even worse when you make your bosses look bad and catch them off guard. Predictably under those circumstance, heads will roll.

The NECC was clearly acting as a small drug company and it deserves all the negative attention it is getting. Equally clear, if the Pharmacy Board didn't do its job in regulating/investigating their activites, then the firings and suspensions are merited and well earned.

As seen in the previous post, it is time to make sure we all know who is regulating this type of activity and make sure that it is crystal clear who has enforcement power and the responsibility to use it.  It now appears that it will explicitly end up with the FDA.

Posted by Bruce Lehr Nov 8th 2012.

Congress Moves to Allow FDA to Block Compound Errors

The New England Compounding Center mess has certainly made it tough for compounders to continue to fly under the radar, especially when they are effectively acting a small pharma companies as the widespread meningitis outbreak attests.

A Bill Gives FDA More Power Over Compounders // Pharmalot.

Massachuesetts Congressman Ed Markey has introduced the Verifying Authority and Legality in Drug (VALID) Compounding Act which would clearly give FDA powers to oversee compounders activities and remove any doubt/gray area. 

"Compounding pharmacies have been governed by fragmented regulations for too long, leading to the worst public health disaster in recent memory. The VALID Compounding Act ends this regulatory black hole by giving the FDA new, clear authority to protect patients and oversee these companies," said Markey.

The FDA and MA authorities have been heavily criticized for their inaction in this case -- given NECC was clearly acting like a small pharma compnay selling interstate meds to many States. However, Markey did recognize the FDA since 2001 had issued warning letters to dozens of pharmacies seen to be operating outside the law -- apparently to no effect. If VALID passes, maybe FDA will have a bigger hammer.

Posted by Bruce Lehr Nov 8th 2012.

India Gets Tougher on Drug Pricing

India has been particularly concerned with high pricing of drugs in its market.  They have previously activated compulsory licensing sanctions, denial of patents (evergreening in particular), and incentives for generics/biosimilars -- all aimed at keeping prices down to the consumer and the government payer, and promoting more competition (IP possibly be damned).

The latest from India .

Now, they are raising the ante on drug makers they consider to be overcharging (gouging I suppose). The new policy and penalty?

Any drug maker found overcharging will have to shell out the entire sales revenue of the medicine from the date of its launch as penalty, according to a directive issued by the country's drug price regulator.

"If a company has not been booked for overcharging for selling the product without price approval, if any, pertaining to the period prior to fixation of the price of the said formulation, the entire sale amount from the date of introduction of the product till issue of the price notification order shall be recovered from the company, treating the entire sale proceeds as 'unauthorised sales'," the National Pharmaceutical Pricing Authority (NPPA) said (in fluent government-ese).  Zounds!

The regulator said that action will also be taken in cases where the manufacturer and marketing company have failed to take prior price approval for sale of scheduled formulation packs. The NPPA has given state governments the authority to initiate legal action against companies found overcharging. While welcoming the move experts have raised apprehensions over the efficacy of the directive.

Experts don't seem to be concerned about the policy, they seem to be concerned with the ability to enforce. Double Zounds!

Posted by Bruce Lehr Oct 26th 2012.

 

Rep. Eshoo Calls Abbott on its Biosimilars Citizen Petition to FDA

Abbott may now claim that the BPCIA will induce the FDA to run afoul of the takings clause in the Fifth Amendment but revealing its trade secrets to competitors without compensation, but Rep Eshoo, one of the Bill's authors, says Abbott never said a word when the bill was being drafted. 

Further she says, it was Congressional intent to apply BPCIA to all biologics -- both prior and after the Bill's March 23, 2010 passage.  And the Bill was specifically designed to allow competitors to go after big multi-billion biologics that would be coming off patent soon -- so the Government and patients could realize savings.  She says, Abbott was privy to all this information in real-time and never raised an objection in conference.  See Patent Docs blog.

One must conclude that Abbott likely had its legal strategy in its pocket and planned to spring it whenever the time seemed opportune.  Now, we'll have to see how the FDA responds -- for or against the Citizen Petition  Will that depend on who wins the next Presidential Election?

Posted by Bruce Lehr Oct 26th 2012.

Indian Drugmakers Fight No Brand-Name Rule

Earlier this week, I described the India drug controller's, GN Singh, plan to prohibit the use of brand names in selling drugs.  This is an effort to promote generics' use to reach a greater portion of the population and to save money for the government.  I had the impression that it was aimed at the multi-nationals operating in India.

Indian Drugmakers To Fight Brand-Name Rule // Pharmalot.

However, the local Indian Drugs Manufacturer Association is the first to voice a vehement dissenting response to this concept.  They contend the controller has NO jurisdiction on the use of brand names and pledge to fight this legally if necessary.

"Just as you cannot tell a carmaker or a chocolate maker to stop branding their products, you cannot ask pharma companies to do away with branding their products," said Vinay Pinto, managing director of Wallace Pharma. 

Ironically, the trade association that represents foreign multi-nationals is taking more of a wait and see approach.  The government has indicated a desire to get comment on this proposal and the MNCs want to participate in that exercise first. This story has more to come.

Posted by Bruce Lehr Oct 19th 2012.  

India Serious About Pushing Generics

Are you a Big Pharma Compnay looking to make up sales shortfalls in emerging countries?  Well, scratch India off your list of profit centers.

India Pushes To End Sale Of Branded Drugs // Pharmalot.

India's drug controller, GN Singh, wants to prohibit the sale of branded pharmaceuticals in India in favor of lower cost generics.  States have been ordered to stop issuing licenses for manufacturing licenses for drugs under brand names. Manufacturers have been asked to submit their products for licensing under generic names -- not brand names.

"We have sent the order to all state health secretaries asking them to instruct their drug licensing issuing authority to issue licenses only on generic names and not on branded or trade names, which is the usual practice now.  A branded drug can be 10 times more expensive than a generic variant," said Singh. In addition, the government will open its own chain of medical stores to make generics available at a reasonable cost.

They seem to be as serious as a heart attack in cutting drug costs in India.

Posted by Bruce Lehr Oct 17th 2012.

Compounding Errors Strike a Chord with Mike

Pharma Reform has something to say about pharma regulation or lack thereof, spurred by the continuing issues raised by the meningitis outbreak fueled by a compounded (and less regulated) steroid formulation that has been sold inter-state.  Who's responsible?  Should there be more regulation? 

Pharma Reform takes a stand.

Posted by Bruce Lehr Oct 10th 2012.

 

A White House White Paper On Drug Approvals - Helpful?

It's Election time.  Time for another terrific "white paper" from a Blue Ribbon panel of experts outlining several recommendations as to how the federal Government (e.g. FDA and others) can speed drug approvals.

A White House White Paper On Drug Approvals // Pharmalot.

Like most such august panels, their recommendations in a robust 110 page report is long on advice and short on specifics. Some of these include:

• More funding for National Center for Advancing Translational Sciences (Francis should be happy)
• Create "broad-based" partnership to improve clinical trials and provide the FDA with more input on developing a pathway for "innovative medicines"
• Have the FDA do more to grant accelerated approval for drugs meeting the standard for addressing an "unmet need" for a serious life threatening condition
• Create a new pathwy for initial approval of drugs aimed at specific subgroups, dubbed Special Medical Use approvals
• Have the FDA run pilot studies to look at "adaptive approval mechanisms".  Congress should pony up $40 million annually to pay for this
• FDA should enact a "range of reforms', including the use of pre-market review leaders to oversee drug applications from investigative stages to final approval
• USDHHS should commission a study of economic incentives to promote innovation, i.e stimulate companies to chase drugs like treatments for Alzheimer's or antibiotics

So all we have to do is follow the advice -- blah blah blah blah -- and figure out how to put it into concrete actions. 

White paper + Blue Ribbon panel = Red Herring.  Will it get the Green light?

Posted by Bruce Lehr Sep 29th 2012.

 

Emerging Markets Are No Panacea

This from Pharmalot.  Former Pfizer executive, Amal Naj, explains that multi-nationals likely can't rely on going to pharmerging markets to bail them out from their current revenue gaps. MNC's, he says, "have overestimated their ability to sell branded products in these markets" -- particularly at a price/profit premium.  

Emerging Markets Are No Panacea: Naj Explains // Pharmalot.

Factors cited by Naj that mitigate against MNCs making good profits include:

• Local generics producers selling at less than 50% of MNC prices in these markets
• MNCs and generics often use the exact same manufacturers in emerging markets which blunts any "increased quality" claims that MNCs can make
• MNCs competing with each other in these markets with generics
• Brand power is dissipating from factors cited above. Products are becoming commodities
• Government controls to force lower prices (and margins)
• Greater difficulty than expected in getting products registered in these markets
• Quality from local companies is gettig better and they are getting more efficient

The upshot?  Expect more and more competition from local competitors.  Even some big MNCs to withdraw from some markets due to depresssed prices and profit potentials.

I think that once competition for generics begins to be widespread -- there is a greater drive toward commoditization (which payers and consumers want).  That means not everyone will be able to compete profitably in every market and there will be withdrawal and consolidation.  It may also mean that a generic producer business model won't favor everyone.  Clearly, low cost producers are favored in such environments -- and not everyone can be THE low cost producer.

Posted by Bruce Lehr Aug 14th 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.

Natco Not Satisfied with One Compulsory License

Earlier this year, Natco convinced the government in India to grant it a compulsory license to Bayer's Nexavar.  Apparently, one is not enough.  Natco seems to be planning to bolster its pipeline further by going after more compulsory licenses.  But the company is remaining mum as to which companies' drugs it covets.

Natco Seeks More Compulsory Licenses In India // Pharmalot.

Has the lid been lifted to Pandora's box?  I don't know but it sure looks like Natco is going to try to cash in but filing application after application to the India government to grant it licenses?  Afterall, what does Natco really have to lose by doing so?  This coudl be a good example of a policy gone wrong.

The US Patent and Trademark Office and the World Trade Organization have already come out against granting these licenses. Presumably, if the Indian government should issue more, than even more Western pressure will increase against these.

Many experts in India pooh-pooh the prosepects of compulsory licensing becoming a major factor.  They point to the difficulty in making the case "that the multi-national drug maker failed to implement a strategy to make a life-saving medicine available to those who are unable to aford it."  They also note that invalidating a patent would be cheaper than the compulsory license as no royalties would be owed. The latter point may be true, but how easy is it to win an invalidation of patent? 

Seems like a slippery slope to me, if Western companies can't rely on patent protection for their products in India, I would expect them not to market those novel drugs in that country.  That wouldn't be good for anyone -- drugmaker, government or patients.

Also, isn't it a bit offensive for a company like Natco to talk about potential additional comulsory licenses as "its pipeline".  What did it do to invent anything to help the patients?

Posted by Bruce Lehr Jul 23rd 2012.

Three More Amici Filings in Myriad Discussed

The Patent Doc blog has posted summaries and analyzed three more amici filings in the Myriad case.  Three separate briefs were submitted by the following persons/organizations:

• Dr. Christopher Holman, Associate Professor of Law at the Universityof Missouri-Kansas City
• Dr. James Watson (you've probably heard of him. Discovered DNA or something)
• The Biotechnology Industry Organization (BIO) and the Association of University Technology Managers (AUTM)

Dr. Holman focused on scientific inaccuracies in previous rulings. One, he pointed out that isolated DNA does have different characteristics than DNA on the chromosome.  He also notes that the DNA used in BRCA testing is actually a synthetic copy of the native gene and not one just cleaved out. Two, he challenges the goverment's argument that isolated genomic DNA and cDNA are fundamentally different. He does so good a job that he may inadvertently supply a reason to consider patent eligibility to cDNA -- possibly missing the "forest for the genes" by being so science focused. 

Finally, he points out that claims as to the utility of isolated genomic DNA being restricted to use as probes/primers in diagnostic tests misses the boat with regard to their most important use being in production of recombinant proteins. And, he further challenges the assertion that patents on DNA gene sequences necessarily blocks any research or diagnostic relating to that gene. On the contrary, many sequencing techniques now don't rely on gene isolation to enable the technique and claims could be written to fall outside of current patents. He concludes that any determination that isolated DNA is patent ineligible will cause serious damage to biotechnology.

Dr. Watson takes the position that human genes should not be patented.  He has three main points. DNA is a unique moleculre different from other chemicals (as it is self-replicating among other things and contains the genetic code) and should be treated as such from a patent point of view. The Patent Doc blog author notes this is a policy statement and as such not something the court shoudl consider as a matter of law in their power to change.  Secondly, Dr. Watson says that human genetic information should not be controlled by legal monopolies or the private property of any company. The blog auther notes the gene sequence is patented and not the information from that gene.  Further, the author notes that the biotech industry depends on its patents to secure rights for development funding from VCs and the public.

Finally, Dr. Watson brings up the point that the patents can result in a thicket that could block commercialization of genetic diagnostic testing. The Patent blog opines that the prototype diagnostic tests being proposed now would not be encumbered by these patents. And that patents are needed to spur investment.  Dr. Watson's compulsory licesne concept therefore would likely chill investment and prevent introduction of these technologies not from the formation of a patent thicket but from a lack of commercial funding to development them in the first place.

That brings us to the amicus brief filed by BIO and AUTM in direct support of Myriad. They state that DNA sequences should remain patent eligible and that the Supreme Court's finding in Mayo v. Prometheus did nothing to change that.  Mayo simply does not apply to composition of matter claims and any interpretation to the contrary is folly. Therefore the Court's reasoning in Mayo, a case about patent eligibility of method claims, should not be applied to manufacture of the composition of matter claims. They further state in their brief that if the Supreme Court had meant to examine composition of matter claims they would have cited findings in both Diamond v. Chakrabarty and Funk Bros Seed Co. v. Kalo Inoculant Co. as the proper precedent.

Finally, they two cite 30 years of precedent for allowing DNA sequence claims to be patent eligible. They contend that the overwhelming public policy balance favors sticking with prior policy. Again, citing the economic necessity of patent holders to rely on IP protections to leverage for development funds and to spur further innovation. They cite several examples of products produced using isolated DNA sequences including erythropoeitin, rapamycin, muromab-CD3 (anti-transplant rejection mAb), phytase (enzyme used to reduce phosphate pollution) and a host of enzymes used in biofuels.  Basically, you don't only touch diagnostics tests but effect many other important areas of biotechnology with a "you can't patent gene sequences ruling".

Posted by Bruce Lehr Jul 16th 2012