Pricing: Prove It
Avastin's clinical heft is plated with gold. The drug is the centerpiece of Roche's rich oncology franchise, topping the company
product league charts at 5 billion Swiss francs in sales for 2009. Its value as a long term profit spinner for Roche was a
factor in management's move last year to convert its 56 percent majority stake in Genentech to full ownership—some analysts
forecast Avastin revenues could more than double before the drug's primary US patent expires in 2019.
Fragile Shoots: Extending the Tree of Life for Cancer Patients
To do that, Avastin will not only need to secure additional FDA and EMEA approvals, but also demonstrate better efficacy as
an early stage inhibitor of tumor growth—a big if, according to some cancer specialists. "Validating patient benefit to drive
the payer investment is at the heart of the debate here," argues Karol Sikora, a practicing oncologist and former professor
of cancer medicine at London's Imperial College. "Right now, if you can afford it, Avastin is probably worth the price. But
assuming continued growth through additional indications, Roche could halve the price and still double its revenues."
Pricing is the key investment risk facing all oncology drugs today. Avastin's daunting cost and prominence as an early breakthrough
in the science of tumor regression means it carries symbolic importance in the debate. The fact that Avastin has been on the
market for six years and ranks consistently in the top three drugs in global oncology sales means it could be the first to
confront a key question posed by regulators: Is there an expiration date on the label of innovation that confers a premium
price? More directly, where is the clinical differentiation against the growing number of competing therapies with a similar
mechanism of action?
Philippe Bishop , VP, Clinical Development, Avastin
For Roche, the answer depends on grafting broader applications to backstop Avastin's ability to score against multiple cancers.
Company researchers are looking to its potential as an overall early-stage treatment, an inhibitor of post-surgery tumor relapse,
a cancer maintenance therapy—even as a preventive. One little-understood aspect of Avastin is that in contrast to many cancer
drugs it is well tolerated by patients, over a longer period of time. This might enhance its value as a micro-tumor growth
suppressor when used in combination with drugs that target other aspects of cancer biology.
Skeptics Pan a New Path
The rationale for rewarding drug innovation starts with three metrics: time, money, and opportunity. Avastin's storyline is
a long one, emerging over three decades from a heretical concept in the biology of vascular cell growth to commercial breakthrough
that blocked cancer's spread through the blood supply. The journey began in 1971 with publication in The New England Journal of Medicine of a paper by Harvard professor Judah Folkman positing that cancer cells secrete excess amounts of a molecular substance—Vascular
Endothelial Growth Factor (VEGF)—which promotes proliferation of blood vessels that feed tumors and help them metastasize.
Folkman dubbed the process angiogenesis, a combination of the Greek words for "vessel" and "birth." His practical conclusion
was that if VEGF could be controlled, it could beat back or even render dormant the cancerous growths whose spread depends
on their ability to stimulate the formation of new blood vessels.
The cancer community found Folkman's paper fanciful, even threatening. This was especially true for the many researchers trained
in the laboratory rather than in the real world setting where Folkman worked as a surgeon, in regular contact with patients
suffering from perversely healthy, blood-rich tumors. Plagued by the "not in my back yard" syndrome, Folkman found little
institutional support for his conclusions, and it was left to circumstance whether others might take up the challenge of transforming
his theory into medical practice.