Drug Firms Must Swallow Bitter Pill
It’s “crunch time” for the pharmaceutical sector and drug makers are worried sick.
Representatives from the sector descended upon London this week to discuss the industry’s ailments. All were stunned by the bleak outlook.
Big Pharma got fat and complacent during many years of reaping huge profits from blockbuster drugs and incremental “me too” uses of existing medicines. But those days are gone. Meanwhile, a converging flow of pressures is hitting the sector.
“This stark environment includes patent protection “cliffs”, lack of drug innovation, increasing pressures from payors on both sides of the Atlantic, and litigation, among other things,” explains GlaxoSmithKline’s chief strategy officer David Redfern.
The London conference, dubbed “Reinventing Pharma For A New Generation” was told the painful truth of the situation, and that time has run out.
Hakan Bjorklund, chief executive of privately-held Nycomed of Switzerland, said:
“This industry faces really significant challenges and it’s shrinking right now. It all has to do with R&D productivity. But it also has to do with the willingness of payers to pay, especially for innovation.”
The problem is compounded by the industry’s poor record of R&D productivity, high failure rate, rising costs and more stringent regulatory hurdles—all of which helped push the cost of bringing a new drug through R&D and on to market more than the $1 billion mark.
Such pain is causing large drug makers to retrench their R&D operations, most notably Pfizer, the world’s largest drug maker, which this month said it will close its major R&D center in southern England as part of a move to slash R&D costs by up to 23.5%.
“What we’re seeing is that the industry’s drug makers don’t believe the money it has spent on R&D over the last few years was money well spent, and that’s why we’re seeing these dramatic reductions in R&D, the obvious case being Pfizer,” said Bjorklund. “AstraZeneca announced the closure of two very large sites as well and. I don’t think we’ve seen the end of that. There will be more of it, definitely.”
So what’s the answer?
Glaxo’s Redfern says focused strategy and its execution will be key. It’s also up to the big pharmaceutical companies to lead the way in a proactive, deliberate way, in partnership with their many stakeholders, if the industry wants to repair its reputation.
Redfern said:
“We’ve gone from terrible to average, but there is an opportunity to respond to society and be proactive in taking the trust agenda forward and that means being attuned with a very broad group of stakeholders.”
He cite actively working to reduce pollution generated through the processes of drug making as an example.
Nycomed’s Bjorklund agrees.
“We need to work on our credibility. And then of course we need to focus on products that make a difference, and not just making a difference from an economic point of view, but also from a medical point of view.
“That may mean scientists having to spend more money. But the whole society out there needs to realize that R&D is very expensive. And if you’re not willing to pay for the R&D, there’s going to be very few products coming out. That’s the sad truth.”
Industry accepts decision not to raise drug prices
The Health minister’s decision not to award any increase in the single exit price of drugs this year was in line with the agreed methodology and came as no surprise to the industry, pharmaceutical companies said yesterday.
Aaron Motsoaledi, the Minister of Health, told the industry two months ago that there would be a zero percent rise for medicines this year.
Yesterday Anban Pillay, the director for pharmaceutical economic evaluations in the Department of Health, said that after applying the formula that took into account inflation (70 percent) and the exchange rate (30 percent), it was clear firms could not be allowed to hike prices as the strong rand outweighed mild inflation.
“The industry would have had to decrease the prices, but it was proposed that there should instead be a zero percent increase. This was communicated with the industry,” said Pillay.
Drug makers are vulnerable to the exchange rate because they import all the active pharmaceutical ingredients. This includes the firms that manufacture drugs locally.
Paul Anley, the managing director of Pharma Dynamics, said Motsoaledi’s decision was fair if one took into account the fact that the rand strengthened considerably last year.
“We call on the minister to consistently apply this formula as it is in years when he should grant an increase. We managed our cost base well because of the strong rand, but with the rand weakening, the opposite will happen this year,” said Anley.
Last year Motsoaledi approved a 7.4 percent increase. Stavros Nicolaou, a senior executive at Aspen Pharmacare, said the firm welcomed the decision as it was in accordance with the methodology that the industry and the government had agreed on. “It works out to a neutral position for us as we all have a currency exposure,” said Nicolaou.
In Quest For A Female Viagra, Many An Odd Twist
As demonstrated by the box-office belly-flop of Love and Other Drugs, Viagra and its competitors now rate a shrug. A mere 12 years after the first erectile dysfunction drug was introduced, audiences were barely titillated by the tale of a Viagra salesman and his romance-spurning sex partner.
But FSD — female sexual dysfunction — remains a hot topic. While a pharmaceutical solution for feminine erotic discontents could be a huge money-maker, such treatments have proved much more difficult to develop than Viagra. Orgasm Inc. provides an overview of the struggle — and makes it plain it isn’t simply a battle to bring a new product to market. Director Liz Canner’s saga of medical overreaching lacks major revelations, but it’s smartly constructed, briskly edited and sometimes very funny.
There are many approaches to FSD, including to deny that it even exists. Unlike ED, it isn’t a simple matter of hydraulics. Companies seeking a female counterpart to Viagra seek to “cure” not only lack of desire and failure to reach orgasm, but also failure to reach orgasm the “right” way. The condition’s causes are diverse, and range from the physical (a hysterectomy) to the inexplicable.
In short, no one knows what FSD is. But as Canner shows in a humorous montage, TV talkers from local news anchors all the way up to Oprah Winfrey were prepared to tell their viewers that 43% of women have it. (That number, Canner indicates, came from a vague, unscientific survey.)
Canner entered this world as an eroto-industrial filmmaker, editing pornography that would be screened for women enlisted in clinical trials run by a California company. Vivus, which had lost the ED market to Pfizer, saw its stock price spike when word got around that it was developing the female Viagra. But its product never outperformed a placebo.
Through her editing gig, Canner met Kim Airs, who sells products that bring satisfaction to some women: vibrators and female-oriented porn. She’s so certain of her merchandise’s value that she attempts to show them at a pharmaceutical convention. (Barred from the display area, she sets up in a nearby hotel suite.)
The movie’s other voices include Ray Moynihan, an Australian critic of “medicalizing” every human complaint, and Leonore Tiefer, an NYU psychologist who keeps a close eye on the Food and Drug Administration. So far, the FDA has not approved a “pink Viagra,” although a testosterone patch for unfulfilled women has been approved by European Union regulators.
On the other side are advocates for new FSD drugs who don’t reveal their ties to the drug industry, flacks for the growing and potentially dangerous “vaginoplasty” business, and a guy who’s testing an Orgasmatron. (Apparently, the one in Sleeper worked better.)
Orgasm Inc. also takes a brief foray into the 19th century, where women suffered “hysteria” rather than FSD, and quickly surveys some of the other conditions that Big Pharma has turned into diseases. If the industry can treat “restless leg syndrome,” why not erotic dissatisfaction? Some of the issues Canner raises, such as the way doctors are encouraged to prescribe drugs for non-approved uses, are much broader than her film’s focus.
Following one of the current documentary vogues, the director punctuates the movie with animated sequences, which are both overly cutesy and entirely unnecessary. Canner’s eye-opening, entertaining account of the search for the little pill that supplies the Big O is loony-toons enough without the cartoon asides.
Big Pharma shows willingness to pool HIV and Aids drug patents
HIV and Aids may be slipping off the news agenda – see the Kaiser Family Foundation report on global health journalism, which is here – but the determined bunch of people who have got the patent pool for Aids drugs up and running are not only quietly working away, but getting results.
Not long ago there were those who doubted whether the Geneva-based Medicines Patent Pool would manage to persuade any of the big pharmaceutical companies that it was a reasonable idea to allow their patents on Aids drugs to be “pooled”. Unitaid, which works to improve access to medicines in developing countries and set it up, argued long and hard that the pool was necessary. It would allow generic manufacturers in countries like India and China to make legitimate cheap combinations of some of today’s advanced HIV medicines. Cheap new combinations are going to be vital in the fight to keep millions alive in the developing world as HIV inevitably develops resistance to the basic drugs now available in poor countries.
But today, two months after sending out letters inviting the major makers of Aids drugs to get involved, the patent pool announced that it is in negotiations or preparing to enter negotiations with F. Hoffman-La Roche, Gilead Sciences, Sequoia Pharmaceuticals, and ViiV Healthcare (a joint venture of GlaxoSmithKline and Pfizer). The big surprise for the sceptics is Viiv. GSK (which has far more Aids drugs than Pfizer) had appeared uninterested in the concept. Its chief executive Andrew Witty, while committed to improving access to its medicines in poor countries, said they were taking other routes.
Obviously an interest in negotiations is not the same thing as agreeing to licence your drugs for pooling purposes, but Viiv has taken the first step. The patent pool has listed all the companies it has approached on its website here, and in a nice touch, has put up the letters from those that are, shall we say, less than enthusiastic. The table will be updated every quarter. It will be worth watching.