Avandia Sales Away - Pharmaceutical Executive

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Avandia Sales Away
What did you do when you heard the safety news about Avandia? Here's what the rest of the market did, and why it matters to you.


Pharmaceutical Executive


Awareness was high. Nearly all the respondents (99 percent) had heard about the NEJM study showing Avandia's safety risks. But the survey showed that they were ambivalent about the data. On a seven-point scale, with 1 being not at all convincing and 7 being extremely convincing, PCPs recorded a cumulative score of 4.2. Endocrinologists were less convinced by the data, responding with a 3.4 score. In interviews, physicians said that they were happy with Avandia because the results seemed to outweigh the perceived risks. One physician questioned, "Isn't it ironic that the author of the study is the same doctor who helped bring down Vioxx?"


Patients React
Rather, it seems that much of the switching was driven by patients' reactions instead of physicians' perception of the meta-analysis itself. (See "Patients React") When we asked doctors how their patients felt about the Avandia news on a 1 to 7 score, patient concern averaged a 5.9. Indeed, endocrinologist Robert Ruxin and internist Scott Andes explained on a Deutsche Bank/ImpactRx conference call for investors that they've been forced to respond to patient concerns fueled by hyped media coverage, despite their confidence in Avandia's safety and efficacy. As far as heart risk goes, Ruxin stated, "I am more concerned that people smoke, drink, and eat McDonald's as compared to the risks attributed to Avandia."

Class in Session

On May 23, 2007, FDA requested that GSK and Takeda add black-box warnings to Avandia and Actos. Ironically, these warnings have nothing to do with the NEJM study of Avandia and the possibility that it increases heart attack and cardiac death. Rather, they focus on another, entirely different (but well-known) potential problem of the thiazolidinedione (TZD) class to worsen heart failure in patients.

FDA's request meant that it was taking a class approach to responding to the safety issues. But physicians were deciding for themselves whether they felt Avandia's safety issues were product- or class-specific.


Safety News Switch
For the doctors who were less concerned about class effect and may have believed the increased cardiac risk was product-specific, Actos was the clear winner. The share of switches going to Actos in primary care offices went from 11 percent in the week prior to almost 50 percent in the week immediately after the Avandia news. (See "Safety News Switch") Avandia's market share erosion was magnified further by the almost complete absence of new scrips being switched to Avandia from its competitors. In the weeks leading up to the event, Avandia accounted for more than 20 percent of all switches by PCPs.

Physicians who were more concerned that Avandia's safety problems were a class effect turned primarily to Januvia. In fact, Deutsche Bank's Barbara Ryan predicted that Merck's Januvia was best positioned to reap the benefits of the NEJM announcement, with potential fiscal 2007 earnings per share increases of up to 9 cents. Indeed, Merck was able to capitalize on market events, having just launched a Januvia line extension, Janumet, in April. Instead of one brand cannibalizing the other, the Januvia franchise actually gained about four NWRx share points from Janumet's introduction, through the end of June.

Reps Play Defense and Offense

Of course, changes in treatment decisions don't happen in a vacuum. As doctors reacted to news about Avandia, companies sent in their reps to influence prescribing decisions. We surveyed our network of PCPs and endocrinologists to better understand this competitive landscape.


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