Overlooked Opportunities

Jan 01, 2009
By Pharmaceutical Executive

If you look at pharma's pipeline, you'll see that personalized medicine is powering drug development. Every major pharma company has a biomarker development program to bring new targeted therapies to market. But there's also an opportunity for companies to apply the paradigm of personalized drugs—specifically, the use of diagnostics to "test and treat"—to therapies already on the market. Companies can leverage diagnostics to drive sales by identifying patients who respond to a given therapy. Industry can best apply this tactic to smaller revenue drugs, where traditional techniques are either ineffective or don't offer a good return on investment.

For pharma companies facing a difficult economic climate, pairing diagnostics with therapies offers a powerful incentive: Manufacturers can improve sales by helping physicians find the most appropriate therapeutic option. One of the key benefits of this approach is that the molecule remains unchanged; rather, the patient base is selected to maximize benefit—which is less expensive than conducting additional clinical trials for new and improved molecules.

There is an opportunity to apply a more personalized approach to small-molecule drugs because many are not effective across the general populations they purport to help. (See "So-So Effectiveness".) Still, within these uninspiring numbers, there are subgroups of patients that do respond to treatment. Companies that launch a diagnostic test can identify these subgroups of "responders," build relationships with doctors by providing them a tool that dictates effective treatment and spares patients adverse events, and argue the value of the drug to payers.

Yet pharmaceutical companies have ignored the opportunity to utilize the same biomarkers and resulting diagnostics for marketed drugs because of one key difference: There isn't a one-to-one correlation. Rather, diagnostics for marketed drugs identify patients that respond to a class of drugs, not a specific drug. That means class leaders have the potential to gain the greatest value from linkage to a diagnostic test. But other drugs that offer differentiated benefits can also generate returns.

How does this work? The linkage to a diagnostic changes the discussion inside the physician's office. Instead of just pitching a drug, reps can speak with doctors about particular patient populations; early disease detection, diagnosis, and differentiation of patient subsegments; selecting pharmaceuticals and avoiding therapeutic side effects; and therapy monitoring. Reports from companies pioneering this effort indicate easier physician access and longer sales calls than traditional therapeutic-only pitches—and an incredible increase in sales. (See "Growth Outpaces Benchmarks".)

Here, we offer several case studies from specialty pharmaceutical companies that illuminate best practices and demonstrate the viability of this new approach in both the US and Europe.

Better Disease Diagnosis

Disease areas in which physicians struggle to make a differential diagnosis are ideal for the introduction of diagnostics. Irritable bowel syndrome (IBD) is a good example. Patients with IBD usually present to physicians with pain, cramping, and diarrhea. Distinguishing between IBD and other gastrointestinal disorders usually requires invasive and expensive procedures, such as colonoscopies, endoscopies, and CT and MRI scans. And once an IBD diagnosis is made, physicians still need to distinguish between the two major forms—Crohn's disease and ulcerative colitis—to determine treatment.

Into this market came Entocort EC (budesonide), developed by AstraZeneca and launched in the US in 2001 for the treatment of mild to moderate Crohn's disease. Entocort EC is an enteric-coated formulation of the well-known steroid, designed to release the drug in the colon and generate lower systemic absorption with fewer side effects. But by 2003, sales of the drug were only $25 million—leading AstraZeneca to outlicense it to Prometheus Labs, a San Diego-based specialty pharma.

Given the difficulty in making diagnosis and treatment decisions, the benefits of a diagnostic test were obvious. Prometheus developed one (which in its updated version, IBD Serology 7, had 92 percent reported accuracy) to help physicians distinguish subtypes of IBD based on serology markers found in the blood, as well as determine the severity of the disease.

Prometheus Labs recruited a 170-person specialty sales force to market the diagnostic as well as Entocort EC and other proprietary pharmaceuticals. In doing so, Prometheus was able to help physicians identify a subset of patients who would benefit from the therapeutic agent, and improve the efficacy of Entocort EC without chemically altering the drug. With the promise of improved efficacy highlighted by the diagnostic, Prometheus was able to immediately raise the average wholesale price for Entocort EC by 66 percent upon acquiring the rights in 2005, and 10 percent every year thereafter. The current pricing for Entocort EC is 120 percent of the price when Prometheus started marketing it, reflecting the increased value to patients, physicians, and payers

Prometheus' ability to work in both the diagnostic and therapeutic areas was critical to achieving a quintupling of sales. Entocort EC sales in the US have grown by 59 percent annually since Prometheus started detailing the drug—and are now $125M annually.

The value of this approach becomes even more apparent when compared with the European market, where AstraZeneca retained ownership but attempted to boost sales through traditional models. In Germany, AZ negotiated an exclusive promotion agreement with Eisai GmbH to market Entocort EC. But without a diagnostic, Entocort EC sales grew only 10 percent annually from 2005 to 2007, and just 7 percent in constant dollars.

The IBD Serology 7 test marketed by Prometheus helped identify patients with Crohn's disease; it did not point physicians to prescribing Entocort EC. In keeping with the American College of Gastroenterology guidelines, physicians could prescribe an oral steroid for patients with mild to moderate Crohn's disease—a category in which Entocort EC is the major branded product. The diagnostic also helped identify ulcerative colitis patients, who would not benefit from Entocort EC.