Harbingers of Change - Pharmaceutical Executive

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Harbingers of Change


Pharmaceutical Executive


THE IMPLICATIONS

Incremental successes in drug development have driven demand over the past 50 years, especially in chronic illnesses, and have generated a cost base that requires payers to carefully manage financial resources. With HTAs becoming more important in drug marketing, pharmas can no longer overvalue the scientific contribution of their innovations or ignore the influence of HTAs. The Novartis initiative may signal the end of Big Pharma's isolationism.

Experiments such as Novartis' may lead to a consensus on targets for R&D. According to the APG's Cooksey Review submission, clinical trials are costing manufacturers in the neighborhood of $500 million; therefore, anything that can direct research in the most promising directions is bound to win support.

4. A SHOT HEARD ROUND THE WORLD

US Research Agency Backs Head-to-Head Trial

Dramatic turning points in history have often begun with a single shot—like the musket shot that began the American Revolutionary War or the assassination of Austria's Archduke Franz Ferdinand, which plunged Europe and its allies into World War I. A large, head-to-head trial sponsored by the US National Eye Institute (NEI) on two marketed products should be seen by manufacturers as such a shot. It signals a new level of activism on the part of other stakeholders, who will fund their own trials when pharmas are unwilling to do so.

THE HARBINGER

NEI, part of the National Institutes of Health (NIH), is pouring about $16 million into a trial that will compare the safety and efficacy of two on-market therapies for wet age-related macular degeneration (AMD): intravitreal injections of the anticancer drug bevacizumab (Avastin) vs. ranibizumab (Lucentis). Both products are anti-VEGF agents, and both have been used to treat wet AMD. But Lucentis is specially formulated for use in the eye and has conducted specific, high-quality AMD clinical trials. By contrast, use of Avastin in AMD has been off-label.

THE CHANGE

This type of clinical trial is normally the purview of the drugmakers. In this case, the originator of both agents, Genentech, will have nothing to do with the trial. The NEI, spurred to action by a Medicare advisory panel, is stepping forward because of the disparity in cost between the two drugs: Lucentis costs around $2,000 per injection, whereas Avastin, when used for this indication, costs only $40 to $75 per dose. With a typical course of eight to 12 injections, the cost of Lucentis would amount to around $24,000, compared to approximately $900 for Avastin.

THE IMPLICATIONS

If the trial, which ends in 2010, finds that Avastin is as effective and as safe as Lucentis, US sales could largely disappear. And there would undoubtedly be a spillover effect in other countries. Avastin sales could benefit, but substantial value would be lost to Genentech forever.

This will also affect the relations that the entire industry has with policy-makers and payers. The NEI-sponsored trial signals a new level of activism in the US by the single-largest payer body: the Centers for Medicare and Medicaid Services (CMS). The US will no longer categorically accept drugmakers' pricing of biologics.


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