Latest Drugwonks' Blog
A courageous interview with Paul Herring, head of corporate research for Novartis, regarding India's denial of a patent for Gleevec... A case study why more companies should get more scientists to speak out about the savaging of their industry by junta loving NGOs...
We are Not Doing This Out of Spite’
The Business World (India)
India, 2/16/2007 - In a case that has got the world’s attention, Swiss multinational Novartis AG has challenged the Indian Patent Office’s decision to deny it a patent on cancer drug Glivec, in the Madras High Court. Novartis has also questioned provisions in the Indian Patent Act under which the patent was denied (under these provisions, incremental improvements to existing drugs cannot be patented). The $37-billion drug maker, best known here for Calcium Sandoz and pain-killer Voveran, had earlier won an exclusive marketing right— now lapsed — on Glivec in India. With its patent claim rejected, cheaper copies of Gli-vec are free to sell in the Indian market. The lawsuit has drawn the ire of humanitarian organisations such as Medicins Sans Frontieres (MSF) and Cancer Patients’ Aid Association (CPAA) for its potential to deny these cheaper generics to patients and for its possible impact on the Indian Patent Act, which currently restricts patenting to completely new drugs. Recently, a quarter of a million people signed a petition demanding that Novartis drop the case. Activists have held protests against the company in India and Switzerland. The backlash is reminiscent of a time, not too long ago, when 39 multinationals, including Novartis, sued the South African government to drop certain provisions in its law that governed access to medicines that the companies thought threatened their patents. Those companies were eventually forced to withdraw the lawsuit. Will this case go the same way? Paul Herrling, Novartis’ head of corporate research, who is also in charge of the Singapore-based Novartis Institute for Tropical Diseases, was in India for a day to address members of a business association. In an interview with BW’s Gauri Kamath, Herrling explains why Novartis is fighting tooth and nail for a case that is, no doubt, causing great harm to its public image.
Your visit is against the backdrop of the Glivec lawsuit. Any comments?
Fundamentally, this is about patents. And I am in research. Our view in research is that patents save lives. You need to invest for 15 years to translate a scientific idea into a breakthrough medicine such as Glivec. Nobody could or would do that kind of research if there was not a hope to recover the investment at the end of the day.
Do you think that the price that you have paid in terms of your public image is worth this patent that you might get if you win?
It is a problem that so many people are upset. We do not want to be seen the way we are being portrayed. One of the leaders of this petition against us is MSF. As you may also know, I am the chairman of the Novartis Institute for Tropical Diseases in Singapore that makes drugs against tuberculosis, dengue and malaria for patients in poor countries — which we will sell at no profit. I work with many people from MSF on projects. And, they are actually wonderful people. But they were never into drug discovery. They do not know the conditions that are needed to make a new drug. They think if one would weaken or abolish patents, then the problem of access for medicines would be solved. This is wrong. I do not think the patent issue is nowadays a major impediment to making drugs available. Novartis has the world’s best malaria drug— Coartem— which is a joint project with Chinese scientists. We give it at no profit, and in 2006 we delivered 62 million treatments, which make it the biggest selling Novartis drug ever. The reason why we can do this is because we have enough business in markets where people can afford (to pay more for) it. This enables us to allocate some of our earnings to access-to-medicine projects where we have life-saving drugs. And the same happens with Glivec in India. As much as 99 per cent of all the Glivec in India is given for free. So, patents have not prevented access, it is how you use them. We have patents on Coartem and there are companies that are now copying it and selling it. We have never done anything to stop them from doing it.
This case really is not about whether India respects product patents per se. It is challenging certain provisions that define what can be patented and what cannot.
The amendments (to the patent law) undermine a significant aspect of patents. They say if it is essentially the same idea and you make improvements on it, then you cannot patent it. But that is not the way science works. For example, children with thalassemia need a lot of blood transfusions. When you do frequent transfusions, iron accumulates in your body which could eventually ruin the liver. We had a drug that was able to take the iron back out of the blood, but it had to be given in continuous intravenous infusion. That meant these children had to have a pump, that was bigger than a cellular phone, on them all day and a needle that was going into one of their veins. So, here what would be considered an incremental innovation(under the Indian law) was to find a version of this drug that children could take as a pill. Under the current amendment, this would not get patent protection, which in turn means nobody would invest because when you do this new version you still have to do all the safety studies and prove that, in fact, the effect is the same.
What is the issue with the patent application on Glivec?
There are two aspects. In Glivec’s case, the issue is a new form of the drug. So, the active ingredient is the same and the salt is different. And we have seen that the absorption of this is better than the original. It is true that the original patent with the original salt form could not be granted for a technical reason because everything before 1995 could not. In this case, we patented this new salt form in 40 countries because we had evidence from our experiments that this would make it easier to absorb, which again means better levels in the body, less variability in the effect. So, that’s again an advantage to the patient. Now, India says, no, you are not going to patent that until you have proven in people that this really translates into the advantage that you foresee from animal studies. Patents (all over the world) are normally given at a time when a scientist can document any invention — a molecule in this case — and some of its effects. In this case, it was through animal experiments, solubility experiments and so on. Once I get the patent at this point —which is early in its life — then I invest. If I am being told that I have to first invest hundreds of millions, and then maybe I can get a patent, then I do not invest. That is the other issue.
Then, in this particular case, would Novartis be willing to do those human studies just to make a point?
Such studies are happening all over the world.
So, you have that supporting documentation.
No. Because that takes time to do.
Is there a point beyond which you don’t believe that this particular case is worth fighting for?
It is difficult to say what the future will look like. If we had solved 99 per cent of all the medical problems on this planet, we would not fight that much. Then there would not be any need for any new drugs and we would sell the old ones, fine. But the big problems are not solved. We believe if the system were to be undermined, it would not be to the advantage of humanity in general.
Does the rejection of the patent on Glivec, or the way people have broadly reacted to the lawsuit, affect your R&D investments or collaborations in India in any way?
Yes. When I was asked why we created our research institute in Singapore, not in India, which also has the talent, the same diseases and so on, that is the reason. We have announced the creation of a major research institute in Shanghai. There we see that it’s not perfect but the system is in place to get to a better and better improvement of intellectual properties.
What about the R&D collaborations that you already have?
They are successful, but because of this intellectual property (IP) insecurity we are not doing chemistry that leads directly to a potential medicine but only supportive work. If this point would be clarified in the positive, we could expand it. Then there would be no difference in the collaborations we do in India versus the US, China or any other place.
But not investing in a country just because of IP issues is like throwing the baby out with the bathwater. Just because pirated copies of Windows Vista sell in China, you don’t see Bill Gates saying he is going to stop investing there. The economics overrides everything else.
I cannot judge the computer industry at all.
There, too, it is the IP issue.
We are talking about other things here. We are talking about products that potentially save lives. And in contrast to the IT industry, we are the most regulated industry on this planet. And the investment level that you have to have for each product is such that we have to look at the world and decide where are the best conditions (to invest).
Is there any attempt to meet with the government?
Oh, no. The courts will decide and we do not want to interfere with this process at all. But what we do is talk to you. It is very vital to us that people understand that we are not doing this out of spite. And we just want to explain our view to people who hear only one side in the press because NGOs are very vocal.
We are Not Doing This Out of Spite’
The Business World (India)
India, 2/16/2007 - In a case that has got the world’s attention, Swiss multinational Novartis AG has challenged the Indian Patent Office’s decision to deny it a patent on cancer drug Glivec, in the Madras High Court. Novartis has also questioned provisions in the Indian Patent Act under which the patent was denied (under these provisions, incremental improvements to existing drugs cannot be patented). The $37-billion drug maker, best known here for Calcium Sandoz and pain-killer Voveran, had earlier won an exclusive marketing right— now lapsed — on Glivec in India. With its patent claim rejected, cheaper copies of Gli-vec are free to sell in the Indian market. The lawsuit has drawn the ire of humanitarian organisations such as Medicins Sans Frontieres (MSF) and Cancer Patients’ Aid Association (CPAA) for its potential to deny these cheaper generics to patients and for its possible impact on the Indian Patent Act, which currently restricts patenting to completely new drugs. Recently, a quarter of a million people signed a petition demanding that Novartis drop the case. Activists have held protests against the company in India and Switzerland. The backlash is reminiscent of a time, not too long ago, when 39 multinationals, including Novartis, sued the South African government to drop certain provisions in its law that governed access to medicines that the companies thought threatened their patents. Those companies were eventually forced to withdraw the lawsuit. Will this case go the same way? Paul Herrling, Novartis’ head of corporate research, who is also in charge of the Singapore-based Novartis Institute for Tropical Diseases, was in India for a day to address members of a business association. In an interview with BW’s Gauri Kamath, Herrling explains why Novartis is fighting tooth and nail for a case that is, no doubt, causing great harm to its public image.
Your visit is against the backdrop of the Glivec lawsuit. Any comments?
Fundamentally, this is about patents. And I am in research. Our view in research is that patents save lives. You need to invest for 15 years to translate a scientific idea into a breakthrough medicine such as Glivec. Nobody could or would do that kind of research if there was not a hope to recover the investment at the end of the day.
Do you think that the price that you have paid in terms of your public image is worth this patent that you might get if you win?
It is a problem that so many people are upset. We do not want to be seen the way we are being portrayed. One of the leaders of this petition against us is MSF. As you may also know, I am the chairman of the Novartis Institute for Tropical Diseases in Singapore that makes drugs against tuberculosis, dengue and malaria for patients in poor countries — which we will sell at no profit. I work with many people from MSF on projects. And, they are actually wonderful people. But they were never into drug discovery. They do not know the conditions that are needed to make a new drug. They think if one would weaken or abolish patents, then the problem of access for medicines would be solved. This is wrong. I do not think the patent issue is nowadays a major impediment to making drugs available. Novartis has the world’s best malaria drug— Coartem— which is a joint project with Chinese scientists. We give it at no profit, and in 2006 we delivered 62 million treatments, which make it the biggest selling Novartis drug ever. The reason why we can do this is because we have enough business in markets where people can afford (to pay more for) it. This enables us to allocate some of our earnings to access-to-medicine projects where we have life-saving drugs. And the same happens with Glivec in India. As much as 99 per cent of all the Glivec in India is given for free. So, patents have not prevented access, it is how you use them. We have patents on Coartem and there are companies that are now copying it and selling it. We have never done anything to stop them from doing it.
This case really is not about whether India respects product patents per se. It is challenging certain provisions that define what can be patented and what cannot.
The amendments (to the patent law) undermine a significant aspect of patents. They say if it is essentially the same idea and you make improvements on it, then you cannot patent it. But that is not the way science works. For example, children with thalassemia need a lot of blood transfusions. When you do frequent transfusions, iron accumulates in your body which could eventually ruin the liver. We had a drug that was able to take the iron back out of the blood, but it had to be given in continuous intravenous infusion. That meant these children had to have a pump, that was bigger than a cellular phone, on them all day and a needle that was going into one of their veins. So, here what would be considered an incremental innovation(under the Indian law) was to find a version of this drug that children could take as a pill. Under the current amendment, this would not get patent protection, which in turn means nobody would invest because when you do this new version you still have to do all the safety studies and prove that, in fact, the effect is the same.
What is the issue with the patent application on Glivec?
There are two aspects. In Glivec’s case, the issue is a new form of the drug. So, the active ingredient is the same and the salt is different. And we have seen that the absorption of this is better than the original. It is true that the original patent with the original salt form could not be granted for a technical reason because everything before 1995 could not. In this case, we patented this new salt form in 40 countries because we had evidence from our experiments that this would make it easier to absorb, which again means better levels in the body, less variability in the effect. So, that’s again an advantage to the patient. Now, India says, no, you are not going to patent that until you have proven in people that this really translates into the advantage that you foresee from animal studies. Patents (all over the world) are normally given at a time when a scientist can document any invention — a molecule in this case — and some of its effects. In this case, it was through animal experiments, solubility experiments and so on. Once I get the patent at this point —which is early in its life — then I invest. If I am being told that I have to first invest hundreds of millions, and then maybe I can get a patent, then I do not invest. That is the other issue.
Then, in this particular case, would Novartis be willing to do those human studies just to make a point?
Such studies are happening all over the world.
So, you have that supporting documentation.
No. Because that takes time to do.
Is there a point beyond which you don’t believe that this particular case is worth fighting for?
It is difficult to say what the future will look like. If we had solved 99 per cent of all the medical problems on this planet, we would not fight that much. Then there would not be any need for any new drugs and we would sell the old ones, fine. But the big problems are not solved. We believe if the system were to be undermined, it would not be to the advantage of humanity in general.
Does the rejection of the patent on Glivec, or the way people have broadly reacted to the lawsuit, affect your R&D investments or collaborations in India in any way?
Yes. When I was asked why we created our research institute in Singapore, not in India, which also has the talent, the same diseases and so on, that is the reason. We have announced the creation of a major research institute in Shanghai. There we see that it’s not perfect but the system is in place to get to a better and better improvement of intellectual properties.
What about the R&D collaborations that you already have?
They are successful, but because of this intellectual property (IP) insecurity we are not doing chemistry that leads directly to a potential medicine but only supportive work. If this point would be clarified in the positive, we could expand it. Then there would be no difference in the collaborations we do in India versus the US, China or any other place.
But not investing in a country just because of IP issues is like throwing the baby out with the bathwater. Just because pirated copies of Windows Vista sell in China, you don’t see Bill Gates saying he is going to stop investing there. The economics overrides everything else.
I cannot judge the computer industry at all.
There, too, it is the IP issue.
We are talking about other things here. We are talking about products that potentially save lives. And in contrast to the IT industry, we are the most regulated industry on this planet. And the investment level that you have to have for each product is such that we have to look at the world and decide where are the best conditions (to invest).
Is there any attempt to meet with the government?
Oh, no. The courts will decide and we do not want to interfere with this process at all. But what we do is talk to you. It is very vital to us that people understand that we are not doing this out of spite. And we just want to explain our view to people who hear only one side in the press because NGOs are very vocal.
That's John F.P. Bridges and Christopher Jones, both of the Johns Hopkins Bloomberg School of Public Health.
Their new paper, "Patient-based health technology assessment: A vision of the future," is a timely discussion of how HTA and EBM can and must be used to advance patient health and reduce long-term health care costs -- rather than how it is currently being used -- as a way to reduce short-term, transitory health care spending.
Here's a link to the paper:
Download file
Some snippets to entice your appetite for real reform:
"Objective: The aim of this study was to develop a working definition of patient-based HTA, to identify the current barriers to adopting a patient-based model, and to formulate a vision of how a patient-based HTA could be used to promote patient empowerment and patient-centered care."
"Whereas EBM categorizes and ranks all types of medical evidence by the quality of the results provided, the randomized controlled trial (RCT) is given preferential recognition because of its ability to identify (average) treatment effects. Unfortunately, RCTs are costly, frequently underpowered, and too often not representative of the broader population of patients who must receive treatments in different settings. In addition, RCTs may not adequately reflect values of patients, as they so often are focused solely on outcomes defined by the scientific and medical community, without consideration of the patient's needs and desires."
This paper delves into the doctines so often treated as dogma, shines a bright light on faulty assumptions, and calls into question the methods of EBM and HTA that have been hijacked to justify limited formularies and price controls.
It's based on a presentation given at the Third Annual Meeting of Health Technology Assessment International, held July 2-5, 2006 in Adelaide, Australia.
And it's worth a careful read.
Their new paper, "Patient-based health technology assessment: A vision of the future," is a timely discussion of how HTA and EBM can and must be used to advance patient health and reduce long-term health care costs -- rather than how it is currently being used -- as a way to reduce short-term, transitory health care spending.
Here's a link to the paper:
Download file
Some snippets to entice your appetite for real reform:
"Objective: The aim of this study was to develop a working definition of patient-based HTA, to identify the current barriers to adopting a patient-based model, and to formulate a vision of how a patient-based HTA could be used to promote patient empowerment and patient-centered care."
"Whereas EBM categorizes and ranks all types of medical evidence by the quality of the results provided, the randomized controlled trial (RCT) is given preferential recognition because of its ability to identify (average) treatment effects. Unfortunately, RCTs are costly, frequently underpowered, and too often not representative of the broader population of patients who must receive treatments in different settings. In addition, RCTs may not adequately reflect values of patients, as they so often are focused solely on outcomes defined by the scientific and medical community, without consideration of the patient's needs and desires."
This paper delves into the doctines so often treated as dogma, shines a bright light on faulty assumptions, and calls into question the methods of EBM and HTA that have been hijacked to justify limited formularies and price controls.
It's based on a presentation given at the Third Annual Meeting of Health Technology Assessment International, held July 2-5, 2006 in Adelaide, Australia.
And it's worth a careful read.
The NY Times used the First Amendment to keep Alex Berenson -- who seeking to turn his novel into a movie -- from explaining his behavior to federal judge Jack Weinstein, particularly his role in a conspiracy to illegally ferret documents out of a case (which makes him a hero in the addled minds of MindFreedom and other co-conspirators) .
As the following clip from Fox News suggests, Judge Weinstein, no arch-conservative, has found Berenson's contempt for legal procedure, defendant rights and the court, "reprehensible."
Drugwonks was attacked for criticizing those (Berenson included) involved in this sordid mess as well as those that called his accomplices "heroes."
We think we are owed an apology. As is Eli Lilly and Co. who, since we last checked, is still afforded the same rights and protections under the Constitution as any defendant in a civil suit.
We are not holding our breath. Maybe if we contacted the NY Times to steal one out of federal court documents we'd get one sooner.
Here's a link to the clip
FNC_02_14_2007_18.31.44.wmv
As the following clip from Fox News suggests, Judge Weinstein, no arch-conservative, has found Berenson's contempt for legal procedure, defendant rights and the court, "reprehensible."
Drugwonks was attacked for criticizing those (Berenson included) involved in this sordid mess as well as those that called his accomplices "heroes."
We think we are owed an apology. As is Eli Lilly and Co. who, since we last checked, is still afforded the same rights and protections under the Constitution as any defendant in a civil suit.
We are not holding our breath. Maybe if we contacted the NY Times to steal one out of federal court documents we'd get one sooner.
Here's a link to the clip
FNC_02_14_2007_18.31.44.wmv
Waxman, Clinton and Schumer have introduced a bill to allow generic companies to introduce followon biologics sans assurances that they are as safe as the real thing and entrusting the approval process to an agency (FDA) that they say cannot be trusted to assure the safety of pharmaceuticals, let alone biologics.... And it turns out that the money to be saved from dumping these products on the market (assuming that innovator companies will accept the idea that their patents should be seized and can be easily challenged or have already expired) equals the amount $70 billion that Democrats were to extract from Part D price controls and were first use to fill the donut hole and then decided to use to expand SCHIP
Is there a biomarker for detecting hypocrisy?
Is there a biomarker for detecting hypocrisy?
Two stories that are frightening both because of their content and, even more so, because of their easy acceptance as “main stream.â€
The first is about an attempt in the Michigan legislature to allow residents of the Wolverine State to sue pharmaceutical companies if they suffer from an adverse event that is on the label of a prescription medicine. After all, patients shouldn’t be responsible for reading the PI and doctors shouldn’t be responsible for informing their patients about potential risks. The only responsibility, it seems, is to permit more and ever more law- suits.
Here’s the link:
http://www.dfw.com/mld/dfw/business/16697132.htm
The second news item comes from our friend, Congressman Henry Waxman, the U.S. House of Representatives new over-sighter-in-chief. It appears that Mr. Waxman doesn’t think Novartis should challenge an Indian law that trashes their IP protection.
But things, aren’t always as they appear, are they?
Here’s the full story:
http://www.business-standard.com/economy/storypage.php?leftnm=3&subLeft=1&chklogin=N&autono=274764&tab=r
And remember the old saw -- everything you read in the newspaper is true, except for those things you know about personally.
The first is about an attempt in the Michigan legislature to allow residents of the Wolverine State to sue pharmaceutical companies if they suffer from an adverse event that is on the label of a prescription medicine. After all, patients shouldn’t be responsible for reading the PI and doctors shouldn’t be responsible for informing their patients about potential risks. The only responsibility, it seems, is to permit more and ever more law- suits.
Here’s the link:
http://www.dfw.com/mld/dfw/business/16697132.htm
The second news item comes from our friend, Congressman Henry Waxman, the U.S. House of Representatives new over-sighter-in-chief. It appears that Mr. Waxman doesn’t think Novartis should challenge an Indian law that trashes their IP protection.
But things, aren’t always as they appear, are they?
Here’s the full story:
http://www.business-standard.com/economy/storypage.php?leftnm=3&subLeft=1&chklogin=N&autono=274764&tab=r
And remember the old saw -- everything you read in the newspaper is true, except for those things you know about personally.
Gottlieb speaks!
Lean New Pharma
By Scott Gottlieb, M.D.
Forbes Online
With 10,000 jobs and as much as $2 billion in costs set to disappear from Pfizer by the end of 2008, the pharmaceutical giant’s new chief executive is proving that he has a brain for bean counting and a body for Six Sigma.
The promotion of Pfizer’s Jeff Kindler to CEO from his former role as the company’s general counsel is of a piece with similar management makeovers inside big pharma’s boardrooms and may speak as much about where the industry is heading as where it has been.
Merck’s new chief executive, Richard Clark, was the president of his firm’s manufacturing division before he took the top job, and one of Clark’s first orders of business on his ascendancy was to announce the closure or sale of five of Merck’s manufacturing facilities as part of a package of efficiencies aimed at yielding pre-tax savings of up to $4 billion by 2010. About $2 billion of that will come from manufacturing reforms alone.
Once upon a time, a pharmaceutical CEO who did not hail from one of the creative parts of the drug business would have been met with skepticism on Wall Street. Certainly, a drug CEO would have been expected to have been schooled in the sales and marketing side of the business, if not originate from its core competency in research and development of new drugs.
Instead, Clark and Kindler, who have little comparative background in these disciplines, have been cheered. What gives?
Clark and Kindler are professional managers, and the administrative discipline they bring may be in order after the industry bloated itself on mergers--some cobbled together with little long-term vision beyond the urge to capture a few prized medicines. But this focus inside the executive suite on cost cutting cannot help but leave the impression that the drug industry is less a growth story than an aging industrial complex readying itself for life as a regulated public utility. Maybe it’s time the drug firms increase their dividends.
After all, if the prevailing political mood is any indication of the future, then the price of this industry’s core medical products will increasingly be a reckoning of government actuaries working for the Medicare drug benefit. And the Food and Drug Administration has always tightly regulated the manner in which pharma companies develop drugs, setting a close parameter on their cost.
In the end, this cost cutting is not a transformational strategy, just an exercise in defense to maintain the margin. These companies are treading water until they can start to grow again, which begs the question: When will the celebrated slump in the industry’s research productivity start to reverse itself.
Truth is, there have been some spectacular breakthroughs produced in recent years out of big pharma labs, including Merck and Pfizer--drugs aimed at specialized conditions and unmet medical needs. But these medicines have been given short shrift by the mass media because many have not been the kind of big primary care sellers that turn into multibillion-dollar blockbusters. Nevertheless, nobody can mistake the fact that big pharma’s spending on research and development has increased about 150% over the decade from 1993 to 2004, to more than $60 billion today, yet the number of drugs from the industry that reach the market has not changed measurably.
Some blame corporate bloat for the falloff, arguing that the drug companies got too big to be entrepreneurial. Others say the incessant focus on blockbusters prompted companies to prematurely cast aside promising but potentially niche molecules. Optimists say we are at a point when fundamental discoveries made in recent years in genomics and proteomics are just filtering into development programs. We will soon see a surge in productivity, similar to previous periods when the application of new sciences like combinatorial chemistry needed time to mature.
Here’s another theory. All of that increased R&D spending has been dwarfed by inflation. Over the past decade, the regulations on development and the demands of government payers have grown far faster than those research budgets, meaning we are not buying nearly as much science as we used to.
This is a fact of life that the National Institutes of Health has been bemoaning as it sees its own budget flatlined. The NIH has not had its budget “cut,†but it announced last week that it is closing swaths of research nonetheless because a dollar today does not buy nearly as much research as it did a few years ago. The furtive secret is that NIH trials are not even subject to the full brunt of Food and Drug Administration oversight. So they get away a lot cheaper than the industry does.
In this kind of regulated world, where the cost of development and the price of finished goods are increasingly controlled by the government, and where the cost of production goes up even as the selling price goes down, the drug companies will need to find additional ways to cast off more of their fixed costs to focus instead on core competencies in late development, distribution and marketing. This will push drugs firms increasingly toward a more disaggregated model, with work put to a growing legion of smaller outfits--from biotech firms that will continue to do research and early development and offload some of the scientific risks to contract organizations that do the testing and freelancers that sell.
Lean New Pharma
By Scott Gottlieb, M.D.
Forbes Online
With 10,000 jobs and as much as $2 billion in costs set to disappear from Pfizer by the end of 2008, the pharmaceutical giant’s new chief executive is proving that he has a brain for bean counting and a body for Six Sigma.
The promotion of Pfizer’s Jeff Kindler to CEO from his former role as the company’s general counsel is of a piece with similar management makeovers inside big pharma’s boardrooms and may speak as much about where the industry is heading as where it has been.
Merck’s new chief executive, Richard Clark, was the president of his firm’s manufacturing division before he took the top job, and one of Clark’s first orders of business on his ascendancy was to announce the closure or sale of five of Merck’s manufacturing facilities as part of a package of efficiencies aimed at yielding pre-tax savings of up to $4 billion by 2010. About $2 billion of that will come from manufacturing reforms alone.
Once upon a time, a pharmaceutical CEO who did not hail from one of the creative parts of the drug business would have been met with skepticism on Wall Street. Certainly, a drug CEO would have been expected to have been schooled in the sales and marketing side of the business, if not originate from its core competency in research and development of new drugs.
Instead, Clark and Kindler, who have little comparative background in these disciplines, have been cheered. What gives?
Clark and Kindler are professional managers, and the administrative discipline they bring may be in order after the industry bloated itself on mergers--some cobbled together with little long-term vision beyond the urge to capture a few prized medicines. But this focus inside the executive suite on cost cutting cannot help but leave the impression that the drug industry is less a growth story than an aging industrial complex readying itself for life as a regulated public utility. Maybe it’s time the drug firms increase their dividends.
After all, if the prevailing political mood is any indication of the future, then the price of this industry’s core medical products will increasingly be a reckoning of government actuaries working for the Medicare drug benefit. And the Food and Drug Administration has always tightly regulated the manner in which pharma companies develop drugs, setting a close parameter on their cost.
In the end, this cost cutting is not a transformational strategy, just an exercise in defense to maintain the margin. These companies are treading water until they can start to grow again, which begs the question: When will the celebrated slump in the industry’s research productivity start to reverse itself.
Truth is, there have been some spectacular breakthroughs produced in recent years out of big pharma labs, including Merck and Pfizer--drugs aimed at specialized conditions and unmet medical needs. But these medicines have been given short shrift by the mass media because many have not been the kind of big primary care sellers that turn into multibillion-dollar blockbusters. Nevertheless, nobody can mistake the fact that big pharma’s spending on research and development has increased about 150% over the decade from 1993 to 2004, to more than $60 billion today, yet the number of drugs from the industry that reach the market has not changed measurably.
Some blame corporate bloat for the falloff, arguing that the drug companies got too big to be entrepreneurial. Others say the incessant focus on blockbusters prompted companies to prematurely cast aside promising but potentially niche molecules. Optimists say we are at a point when fundamental discoveries made in recent years in genomics and proteomics are just filtering into development programs. We will soon see a surge in productivity, similar to previous periods when the application of new sciences like combinatorial chemistry needed time to mature.
Here’s another theory. All of that increased R&D spending has been dwarfed by inflation. Over the past decade, the regulations on development and the demands of government payers have grown far faster than those research budgets, meaning we are not buying nearly as much science as we used to.
This is a fact of life that the National Institutes of Health has been bemoaning as it sees its own budget flatlined. The NIH has not had its budget “cut,†but it announced last week that it is closing swaths of research nonetheless because a dollar today does not buy nearly as much research as it did a few years ago. The furtive secret is that NIH trials are not even subject to the full brunt of Food and Drug Administration oversight. So they get away a lot cheaper than the industry does.
In this kind of regulated world, where the cost of development and the price of finished goods are increasingly controlled by the government, and where the cost of production goes up even as the selling price goes down, the drug companies will need to find additional ways to cast off more of their fixed costs to focus instead on core competencies in late development, distribution and marketing. This will push drugs firms increasingly toward a more disaggregated model, with work put to a growing legion of smaller outfits--from biotech firms that will continue to do research and early development and offload some of the scientific risks to contract organizations that do the testing and freelancers that sell.
I am trying to keep track of the arguments the media is making in favor of
1.Alex Berenson orchestrating the 'leaking' of a small slice of documents in a class action trial against Lilly to show that the company 'knew' of a possible relationship between it's atypical and weight gain and tried to cover it up and
2. That returning the illegally obtained documents is somehow a violation of the freedom of press.
According to the AP:
Last week, Judge Weinstein had requested that the reporter, Alex Berenson, appear in court Wednesday to discuss testimony that the judge said had implicated the writer in a "conspiracy" to obtain the documents, which had been placed under seal by the court.
Here's how the NY Times excuses sleazy conduct and avoids at least talking about in a way that they have hounded others to do so (such as Scooter Libby)
"We guard quite zealously our role as a member of a free and independent press and believe quite passionately that, consistent with the principles embodied in the First Amendment, it is not the role of the newspaper or its reporters to submit to cross-examination about such matters even where it may otherwise serve our particular interests in a particular case to do so,"
Note: this was not a cross-examination in open court. It was chance to clear
up what Berenson knew and did and when.
http://online.wsj.com/article/SB117079300102099942.html?mod=googlenews_wsj
Also note that "co-conspirators" like MindFreedom and other web-based ax-grinders now claim that being in possession and posting of stolen documents is okay. And of course none of this is related to lawsuits contemplated by state AGs in Illinois, Vermont and elsewhere to sue Lilly regarding Zyprexa. (Nothing like going to the well again.)
The idea that Lilly tried to hide the risk of weight gain associated with Zyprexa is nonsense. It's in the literature for anyone not lazy enough to search...
J Clin Psychiatry. 1998;59 Suppl 12:17-22. Links
Adverse effects of the atypical antipsychotics. Collaborative Working Group on Clinical Trial Evaluations.
This whole jihad is being driven by crackpots, money hungry state AGs and aided by a newspaper that is willing to sacrifice both national security and the truth to play to its shrinking readership.....
1.Alex Berenson orchestrating the 'leaking' of a small slice of documents in a class action trial against Lilly to show that the company 'knew' of a possible relationship between it's atypical and weight gain and tried to cover it up and
2. That returning the illegally obtained documents is somehow a violation of the freedom of press.
According to the AP:
Last week, Judge Weinstein had requested that the reporter, Alex Berenson, appear in court Wednesday to discuss testimony that the judge said had implicated the writer in a "conspiracy" to obtain the documents, which had been placed under seal by the court.
Here's how the NY Times excuses sleazy conduct and avoids at least talking about in a way that they have hounded others to do so (such as Scooter Libby)
"We guard quite zealously our role as a member of a free and independent press and believe quite passionately that, consistent with the principles embodied in the First Amendment, it is not the role of the newspaper or its reporters to submit to cross-examination about such matters even where it may otherwise serve our particular interests in a particular case to do so,"
Note: this was not a cross-examination in open court. It was chance to clear
up what Berenson knew and did and when.
http://online.wsj.com/article/SB117079300102099942.html?mod=googlenews_wsj
Also note that "co-conspirators" like MindFreedom and other web-based ax-grinders now claim that being in possession and posting of stolen documents is okay. And of course none of this is related to lawsuits contemplated by state AGs in Illinois, Vermont and elsewhere to sue Lilly regarding Zyprexa. (Nothing like going to the well again.)
The idea that Lilly tried to hide the risk of weight gain associated with Zyprexa is nonsense. It's in the literature for anyone not lazy enough to search...
J Clin Psychiatry. 1998;59 Suppl 12:17-22. Links
Adverse effects of the atypical antipsychotics. Collaborative Working Group on Clinical Trial Evaluations.
This whole jihad is being driven by crackpots, money hungry state AGs and aided by a newspaper that is willing to sacrifice both national security and the truth to play to its shrinking readership.....
The Kingdom of Norway, one of the world's richest nations (due to oil, not salmon) is rewarding bad behavior. Hans Christian Anderson isn't smiling and neither are many of that nation's best trading partners.
In direct contradiction of the spirit of the TRIPS agreement, the government of King Harald V is apparently unwilling to protect pharmaceutical patents. Now it's one thing when the military junta in Thailand decides to demonstrate jack-boot behavior towards intellectual property rights – it’s quite another when it comes from one of the world's wealthiest countries.
The problem arises from Norway's dual system of patent coverage for pharmaceuticals. Prior to January 1, 1992, Norway granted analogous "process" patent protection that applied only to the manufacturing process for a drug's active ingredient. Though Norway began granting full "product" patents for pharmaceuticals after that date, the great majority of drugs sold in Norway today are still covered by weaker process patents.
Analogous process patents provide much weaker protection than product patents, making branded pharmaceuticals vulnerable to generic "copycat" competition. Generic manufacturers have claimed that they have found alternative methods to produce certain branded products that do not infringe the process patent and are attempting to introduce the copycat drugs into the Norwegian market.
The United States and most European nations provide full product patent protections for pharmaceuticals. European countries where this difficulty once existed have taken remedial measures. Finland, for example, recently took action to rectify an identical weakness in its patent laws respecting pharmaceuticals.
Norway wants the full benefit of international pharmaceutical innovation, but is unwilling to contribute its fair share to global costs of biomedical innovation. This is free-riding of the worst order. And what's worse is that the Kingdom's Jamie Love-like behavior punishes many of its best trading partners (those nations home to innovator pharmaceutical companies) while rewarding countries willing to provide anti-TRIPS drugs (such as India and China).
It's not a complicated proposition. Under TRIPS Article 27, Norway has an obligation to provide protection to “any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.â€
And Norway has an obligation under TRIPS Article 70.2 to grant enhanced rights to existing subject matter that either is already protected in Norway or which meets the criteria for protection under the provisions of TRIPS. The pharmaceutical products under debate existed and were patentable subject matter on the date that TRIPS first applied in Norway. So, once again, Norway has an obligation to provide patent protection.
Does the government of Norway think that just because they are a major oil producer they can disregard their international agreements in the same fashion the Thai junta treats its international agreements? It's shameful that a First World economy should embrace a Third World philosophy of blatant disregard for intellectual property.
In Norway, if it's war against the patent rights of innovator pharmaceutical firms today, who's next?
In direct contradiction of the spirit of the TRIPS agreement, the government of King Harald V is apparently unwilling to protect pharmaceutical patents. Now it's one thing when the military junta in Thailand decides to demonstrate jack-boot behavior towards intellectual property rights – it’s quite another when it comes from one of the world's wealthiest countries.
The problem arises from Norway's dual system of patent coverage for pharmaceuticals. Prior to January 1, 1992, Norway granted analogous "process" patent protection that applied only to the manufacturing process for a drug's active ingredient. Though Norway began granting full "product" patents for pharmaceuticals after that date, the great majority of drugs sold in Norway today are still covered by weaker process patents.
Analogous process patents provide much weaker protection than product patents, making branded pharmaceuticals vulnerable to generic "copycat" competition. Generic manufacturers have claimed that they have found alternative methods to produce certain branded products that do not infringe the process patent and are attempting to introduce the copycat drugs into the Norwegian market.
The United States and most European nations provide full product patent protections for pharmaceuticals. European countries where this difficulty once existed have taken remedial measures. Finland, for example, recently took action to rectify an identical weakness in its patent laws respecting pharmaceuticals.
Norway wants the full benefit of international pharmaceutical innovation, but is unwilling to contribute its fair share to global costs of biomedical innovation. This is free-riding of the worst order. And what's worse is that the Kingdom's Jamie Love-like behavior punishes many of its best trading partners (those nations home to innovator pharmaceutical companies) while rewarding countries willing to provide anti-TRIPS drugs (such as India and China).
It's not a complicated proposition. Under TRIPS Article 27, Norway has an obligation to provide protection to “any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.â€
And Norway has an obligation under TRIPS Article 70.2 to grant enhanced rights to existing subject matter that either is already protected in Norway or which meets the criteria for protection under the provisions of TRIPS. The pharmaceutical products under debate existed and were patentable subject matter on the date that TRIPS first applied in Norway. So, once again, Norway has an obligation to provide patent protection.
Does the government of Norway think that just because they are a major oil producer they can disregard their international agreements in the same fashion the Thai junta treats its international agreements? It's shameful that a First World economy should embrace a Third World philosophy of blatant disregard for intellectual property.
In Norway, if it's war against the patent rights of innovator pharmaceutical firms today, who's next?
Bart Stupak had his little show trial on drug safety yesterday with his sidecar of disgruntled FDA numbers crunchers who see an industry-agency conspiracy behind every adverse event. That includes the increasingly insufferable and self-righteous David Graham who, according to USA Today, "more than two years after (telling) a Senate panel that the Food and Drug Administration was "incapable of protecting America against another Vioxx," the FDA scientist was back on Capitol Hill on Tuesday to tell a House panel that "nothing has really changed." Graham made it sound as if he is the sole repository of truth on whether a drug is safe and indeed claimed that the entire class
Actually, Graham has gotten more hypocritical. Here he is on Vioxx before real scientists at the FDA Advisory Committee hearing on COX-2 safety back in Feb 2005 instead of the self-aggrandizing Stupak:
Dr. Abrahamson: There are data that we have seen that ibuprofen might increase risk. We didn't talk about the McDonald and Way paper that in cardiovascular discharge patients, people give ibuprofen had a higher mortality 2-fold. So, as the smoke clears, I am not sure that the simple answer that the coxibs were different was actually supported by your data, nor
your ultimate explanation. Can you defend that?
Dr. Graham: I think you are accurate. I think what you are saying is fair. Maybe a better thing to say is, in the end, that you do need to look at it drug by drug.
Maybe the better thing is to actually run a balanced hearing instead of phoney three-ring circus that bears no relationship to the science.
Actually, Graham has gotten more hypocritical. Here he is on Vioxx before real scientists at the FDA Advisory Committee hearing on COX-2 safety back in Feb 2005 instead of the self-aggrandizing Stupak:
Dr. Abrahamson: There are data that we have seen that ibuprofen might increase risk. We didn't talk about the McDonald and Way paper that in cardiovascular discharge patients, people give ibuprofen had a higher mortality 2-fold. So, as the smoke clears, I am not sure that the simple answer that the coxibs were different was actually supported by your data, nor
your ultimate explanation. Can you defend that?
Dr. Graham: I think you are accurate. I think what you are saying is fair. Maybe a better thing to say is, in the end, that you do need to look at it drug by drug.
Maybe the better thing is to actually run a balanced hearing instead of phoney three-ring circus that bears no relationship to the science.
The WSJ has an article about how Mayo and Medco are partnering to screen patients BEFORE they take drugs to avoid side effects but meanwhile it sounds like the FDA is making it hard for such diagostics -- critical to the Critical Path and better health -- to get approved (and funding).
This in turn only gives ammunition and power to the critics of the industry and the agency that molecular medicine is not ready for prime time, that user fees are too user friendly, and that most of the money should go to policing products after they are on the market and not before they are developed or dispensed. All of which means fewer dollars spent on getting people new medicines for lifesaving medicines...
The FDA has a responsibility to get its act together on molecular diagnostics but Congress should understand that to drain the agency from money to advance such discussions and developments and invest in IOM-type idiocy will come at the expense of patient health and safety.
This in turn only gives ammunition and power to the critics of the industry and the agency that molecular medicine is not ready for prime time, that user fees are too user friendly, and that most of the money should go to policing products after they are on the market and not before they are developed or dispensed. All of which means fewer dollars spent on getting people new medicines for lifesaving medicines...
The FDA has a responsibility to get its act together on molecular diagnostics but Congress should understand that to drain the agency from money to advance such discussions and developments and invest in IOM-type idiocy will come at the expense of patient health and safety.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
