Specialty medicines are the mainstay of today's pharmaceutical pipeline, with companies betting big on prospects for a few pearls to emerge from the sludgy drain of high costs, missed targets, and thwarted expectations. No other company is making a bigger commitment to leadership in the specialty class than Pfizer, which is managing a diverse portfolio of biologics and vaccines through a uniquely autonomous business unit (BU) structure that many regard as the organizational equivalent of targeted therapy. 

To explore the Pfizer strategy in detail, Pharm Exec sat down with the Specialty Care Business Unit's President and General Manager, Geno Germano. A pharmacist by background, Germano, 49, is an import from Wyeth, where he ran the US pharmaceuticals business from 2007 until the merger. What follows is a conversation covering the complexities and emerging challenges of building a successful franchise in this still lucrative—but increasingly crowded—sector. Will Pfizer's sheer size trump the competition and win critical provider and payer support in a line of business that prizes niche-driven focus and an intimate connection to the patient?  

 Let's begin with an overview of the business segment you are vying to serve. In a word, what's so special about specialty care?   

 Because of the broad diversity within the category, it is difficult to provide one simple definition. Commonalities across Specialty Care typically include medicines that are innovative, sometimes difficult to manufacture and possess clinical profiles of high value to small, but well differentiated customer bases, such as hemophilia or kidney transplant patients. But we also have large customer bases as with our psychiatry and ophthalmology businesses. Leveraging the therapeutic assets of these medicines depends on extensive commitments to clinical exploration, strong, field-based medical support, well trained and knowledgeable sales capabilities and sophisticated deployment of evidence and outcomes data. The entry hurdles are high, often requiring extensive investments in complex biologic manufacturing processes and expertise working with targeted distribution channels. It is also critical that we be deeply engaged with physicians, many of whom dispense our medicines directly to patients, and that we demonstrate a strong commitment to patient education and support.  

 How well is Pfizer positioned to compete in this segment?  

 Specialty connotes an image of smallness but the skills and resources required to compete successfully in this segment are actually quite significant.  Size and scale count, and Pfizer has these assets in abundance. The combination with Wyeth moves us from number five in revenues in this category to number one. The Specialty Care BU is itself a $15 billion business; standing alone, we'd rank 15th in the league table of the Big Pharma top 20. The combination with Wyeth has already helped us achieve an 84 percent boost in revenues on a year on year basis, reflecting the impact of leading-edge therapies like Enbrel for the treatment of rheumatoid arthritis and psoriasis, and Prevnar for the prevention of pneumococcal disease. And assuming expansion of our pipeline, we are poised for further growth.  

 What about the reputational pressures associated with the high price of specialty products? Is it fair to state that specialty is a litmus test for how society supports innovation?   

The factors I mentioned do add to the cost base, so specialty medicines are frequently priced at a premium compared to other drugs. Nevertheless, specialty medicines have traditionally been seen as an enormous driver of benefit to the healthcare system because of the therapy options they provide for patients with life-threatening conditions, where there are few other treatments.  This rich vein of value—still largely untapped—is a distinctive characteristic of the specialty class that Pfizer is putting front and center as we develop the business.  

 The barrier is clearly being placed higher in terms of establishing differentiation and securing access to the reimbursement rolls.   

Higher prices coupled with the life-extending impact of many such drugs can attract critical attention, typically raising three key questions. What is the real value of a drug that allows for an improvement in quality or longevity of life? Can the price be justified when compared to existing therapies? And does use of the drug lead to a reduction in overall health costs, for the long term?  

Payers expect Pfizer to provide metrics that can answer these questions. This in turn is driving a revolution in information and new diagnostic technologies. Specialty is where the key experiments are taking place to anticipate and bend the cost curve, such as targeting therapy toward the cohort of patients most likely to benefit from a drug, or building economic models to drive outcomes that improve patient status and enhance public health.  

 The specialty segment casts a long shadow in the effort to make healthcare more efficient and responsive to the patient. Is that your point? 

Yes. The complexity of the science that bring these medicines to market and the importance of a "high touch" approach to administering the medicine to patients means that we have to do more than supply the pill. The potential for these drugs depends on a networked approach, covering not just the right therapeutics but also a service infrastructure that can be mobilized to support the provider and the patient in managing his condition. This has led to many industry-led innovations in coordinating care, educating around patient compliance, mitigating adverse event risks, and finding the right price points to accommodate the significant variety in how, where and when these medicines are used.  

 Can you provide an example of Pfizer leadership in building this necessary service infrastructure?  

One Pfizer "best practice" is the International Growth and Metabolic Data Bases programs we have developed for children and adults with growth hormone deficiencies treated by our endocrine franchise therapies, Genotropin and Somavert. It contains evidence on key drug performance and outcome indicators drawn from a 60,000-member patient file across 50 countries, compiled over 20 years. The two programs are a link between Pfizer, prescribing physicians, and national health authorities in monitoring not only the safety and efficacy of the two medicines but also other broad outcomes measures like health services utilization, quality of life, and productivity.   

 The specialty segment is increasingly crowded, with more than 800 new compounds in various stages of commercialization. Market leadership thus requires a high degree of differentiation. What is unique in the way Pfizer is approaching the business?  

We confront competition from three sources: other large, diversified pharma companies; mid-size players with a focus on niche products; and smaller biotech companies dependent on licensing and other forms of partnership. Building market share depends on providing a distinct advantage to the customer base. Pfizer's unrivaled market reach—Jeff Kindler calls it the "spirit of small and the power of scale"—is actually something that sets us apart. Our product portfolio is the largest in the industry, with 24 medicines and vaccines in 11 different disease areas, including top-selling global products for inflammation, infectious disease, hemophilia and ophthalmology. Another 25 new compounds or indications are in various stages of development.  

Pfizer's broad portfolio means we can provide customers with integrated solutions rather than one-off sales. There is no single delivery or payment model in specialty—there is a big injectible/infusion delivery component, administered in-hospital or by physicians; and there are primary care–like products dispensed through pharmacies, for example our antipsychotic medicines. Vaccines require a direct distribution approach. Because we operate through several different business models, we work to leverage the expertise across the business, finding and adopting best practices to tailor a comprehensive value proposition serving the needs of each of our customers.  This, I believe, separates us from the competition.  

Additionally, Pfizer management is challenging us to extend our capabilities to customers by filling the "white space" that exists between Pfizer's nine BU's, covering biopharmaceuticals and the diversified businesses like consumer health and nutritionals. For example, there are new personalized medicine tools whose development can benefit from our contacts with the Oncology BU. With the Emerging Markets BU, we are exploring how specialty medicines can address the distinct patterns of disease in Asia and Latin America—as incomes in these regions rise, so too is their ability to pay for innovative treatments. The tolerability and effectiveness of many specialty drugs can also be enhanced with products that influence diet or maintain standard indicators of good health. Overall, the idea is to share resources and creative approaches that provide additional value to the customer.   

 How does Pfizer's Business Unit structure create the high level of product differentiation that customers expect?  

It's built into the model from the start. My team is responsible for the entire life cycle of our products, from proof of concept right to the end of the patent term. Our BU's asset teams frame and conduct Phase II and III clinical trials to establish the clinical basis for our products while also devising plans to build a market for the medicine and ensure access for patients at appropriate prices. It's an outward, "customer facing" structure, designed to integrate customer insights and health technology considerations into the development process.   

In the past, the key barriers to creating a strong market rationale for a medicine in development were more internal. Clinical development, which was separate from the business, tended to focus more on regulatory requirements for approval with less focus on the perspectives of the prescriber, the patient or the payer. I've had to confront that perception.  

Market forces dictate that it is no longer sufficient to set the prospect of FDA approval as the only marker of success in investing in a new drug; instead, the metric is how that drug is likely to appeal to customers in a competitive healthcare marketplace. Critical exclusivity time is lost if you cannot show value to the customer right from the start.  It means you have to demonstrate to multiple stakeholders an improvement over the current standard of care and how the medicine is going to be used in clinical practice.  

One of my goals, which I'm excited about, is to create more clarity and transparency around this value metric.  Whatever we do, it will be for a deliberate purpose: to prioritize value as seen through the perspective of the customer. We can only build the business if we meet customer expectations in serving the patient. If we are not clear on that, then we all lose.  

 What is the Specialty Care BU doing to improve the quality and scope of evidence that customers can apply in evaluating the benefits of a Pfizer medicine?  

Good information is essential to driving sales of specialty products. To generate meaningful data, we have formed market access teams responsible for creating a specific "payer value proposition" for each of our products. The market access lead serves as one of my nine direct reports; placing the function at this level is rare in the industry. It also shows our BU's commitment to creating a comprehensive picture involving economics, stakeholder analytics, patient needs, and outcomes—in addition to the science—when we make our case to the customer.   

We follow a threefold approach to developing and supporting the value proposition for our medicines. The first is proactive engagement, where for medicines in development we deliberately seek out a dialogue with payers at a very early stage. This involves frank discussions on what kind of therapeutic advances customers are willing to pay for, not only today but further down the road. It is also important to cast the net beyond payers to identify key "influencers" who understand the motivations of decision-makers and can act as third party advocates.  

The second is building a strong database around the economics of treatment, linked to health outcomes. For example, we have amassed evidence to show that early use of our lead inflammation product, the TNF inhibitor Enbrel, results in an approximately 50 percent rate of remission in patients with rheumatoid arthritis. Likewise, since the introduction of our best-in-class Prevnar vaccine, the incidence of pneumococcal disease caused by vaccine serotypes in children has dropped by 98 percent. Both demonstrate a significant public health outcome that payers can accept as providing real value for money.   

The third is negotiating pricing and reimbursement models that allow for some flexibility in how others pay for our medicines. Strategies involve tier copay positioning, rebates, patient access programs, and conditional reimbursement. This moves us beyond traditional contracting models: the emphasis is on linking price and reimbursement decisions to care guidelines that produce better outcomes.  

In this regard, one of our principal objectives is to relieve the growing burden on the patient in paying for the cost of specialty medicines. Insurers are targeting specialty drugs for higher tiered copays and co-insurance, a strategy that we believe is self-defeating as it can force patients of limited means to forgo therapy or skew adherence to recommended treatment. The result is medical complications that raise expenditures on other health services.   

We are committed to reversing this cycle through initiatives like our Pfizer Bridge Program (PBP). The PBP works with patients to help them navigate the complex reimbursement thicket for growth hormone products, providing our medicines free-of-charge until insurance coverage is secured. It also includes coaching, education and survey work to identify patients most at risk for non-compliance, with follow-up counseling to ensure they stay on therapy.  

 How do you know your customer-facing efforts are working?  

We employ a number of analytical tools to ensure we are fostering alignment around each of these customer-facing approaches. Our Medical Differentiation Index (MDI), a sophisticated modeling program, can quantify precisely where our potential offerings improve on the current standard of care and channel new sources of value to the customer. It integrates a vast stream of market statistics, observational data, and stakeholder analysis. We've found it useful in sharing our findings in negotiations with Health Technology Assessment authorities and other decision-makers.   

 Where do you see the Specialty Care BU in two years? What are your key metrics for success?  

A strong platform for organic growth is the goal. That entails maintaining sales momentum for our in-line portfolio while ensuring registration and uptake of our Phase III pipeline, led by three leading edge therapies: Prevnar 13 and its expanded adult indication, which we hope to file later this year; tasocitinib, a JAK inhibitor and the next generation oral treatment for rheumatoid arthritis; and bapineuzemab, our collaboration with Janssen AI, which represents a potential first-in-class treatment for the underlying causes of Alzheimer's disease. Real progress here is essential to fill the gap from patent expiries, maturing life cycles, and concluding partnership deals affecting some of our other medicines., 

My other priority is more subjective. It involves closer integration of the Wyeth and Pfizer clinical development and commercial pathways to make Specialty Care a truly cohesive business unit. We want an engaged, high-performing workforce operating at the highest level of integrity in delivering consistent results to our customers and patients—and superior returns to shareholders. In two years, I can count on you seeing us as not just the biggest specialty company, but the best. And it will be our customers who say that, not us.  

 What do you see as the primary obstacles to successful execution of this vision?  

Making sure that our growth does not impair flexibility, speed, and accountability in decision-making. Bigness must not obscure our "line of sight" in responding to the accelerating pace of change in the specialty drug market.  

Articles

Features

Pfizer's Specialty Product Business Unit leader discusses his vision for the drug giant's specialty business; now the largest in the industry.

Q&A: Geno Germano

When you've been in pharma for 25-plus years, you've likely had to wear a lot of different hats. Deirdre Connelly, president of North America Pharmaceuticals for GlaxoSmithKline, has collected more hats than most of her peers; she could almost outfit an entire baseball team. 

Connelly, 49, is based in Philadelphia these days. But she started off as a humble rep at Eli Lilly in 1984, and from there doggedly rose through the ranks: general manager for Eli Lilly Puerto Rico in 1995; regional sales director in 1997; head of the women's health business unit at Lilly's US affiliate in 2000, where she oversaw the successful implementation of the global marketing campaign for osteoporosis treatment Evista; executive director of US human resources in 2004; and, finally, president of US operations in 2005. 

Fortune named her one of its 50 Most Powerful Women in business three years straight. She came in at no. 47 in 2007, no. 42 in 2008, and as of this year she's sitting pretty at no. 37. And now Deirdre Connelly has another feather for her cap, having been named the Healthcare Businesswomen's Association's 2010 Woman of the Year. 

Connelly attributes all those promotions and accolades to two things: work ("A lot of work," she emphasizes) and the guidance of men and women, like former Lilly CEO Sidney Taurel. "I had a couple of extraordinary people that took me under their wing and taught me a lot," she says.  

Deirdre Connelly's ascension to US president of Lilly wasn't a surprise, per se—but it was also something Connelly says she had never really considered: "If you had asked me at the beginning of my career if I was going to end up as president, the answer would have been 'no.'"  

Former co-workers at Lilly tell a different story, however. Company HR consultant Catherine Foley was one of Connelly's many nominators for this year's HBA award (she also put together the dossier for Connelly's nomination last year). Foley began working with Connelly when she was putting together a leadership program for new MBA hires. Connelly signed up as a faculty advisor.  

Foley paints a picture of a woman determined to impact as many blooming Lillyites as possible, regardless of gender. "One of the common themes we discovered when we were collecting information for Deirdre's Woman of the Year nomination was her commitment to mentoring," says Foley. "She gave clear and direct feedback, scheduled time to meet with mentees, and just followed through in general, which is a rare thing." Connelly opened up to the acquisitive young staffers, explaining how she learned from various missteps and personal setbacks and used those experiences as career fuel. 

She left Lilly in 2009, after almost four years at the helm of its US operations (and 24 at the company) to tackle the challenges that come along with  being president of North American Pharmaceuticals at GSK.  

Connelly is the first female to hold that title, and one of only two women on GSK's corporate executive team (the other is SVP for HR Claire Thomas), but she dismisses any question of discomfort with a wave of her hand. "It's not run in a way where you feel like you're either a man or a woman," she says. "The approach is very professional." Connelly points out fellow team members Moncef Slaoui (from Morocco) and Abbas Hussain (born in India) as further examples of the team's diversity, but admits she'd like to see an even more varied crew in the future. "Our customers are very diverse, and the more we reflect that in our organization, the more we can offer them." 

Outwardly reserved, though not shy, she already commands the loyalty and respect of her GSK cohorts, as evidenced by the many WOTY nominations she received from, among others, GSK CEO Andrew Witty and Catherine Sohn, senior vice president of Worldwide Business Development for GSK's Consumer Healthcare division. 

Sohn, who was the HBA's Woman of the Year in 2003, praises Connelly's openness: "I ran into her in the cafeteria one day, and I was amazed at how approachable she was, both for senior- and junior-level people," she says. "Our job [as an HBA Woman of the Year] is really to be a role model and an advocate for women's leadership," she says. That includes speaking to various HBA chapters and participating in Q&A sessions around the country. "They're always humbling, those Q&As," notes Sohn. The weight of leadership is never greater than when you're facing a crowd of 300 women.   

In fact, Sohn met Connelly for the first time in November of 2008 at an HBA Leadership Conference in Chicago; she remembers Connelly as the clear standout among the speakers at the conference, and says she made quite an impression on the audience. "I still have the brochure from the lunch," Sohn says. "I use some of her bullet points in my presentations."  

For symbolic reasons alone, Sohn encourages Connelly to strive for excellence in her current position at GSK, noting that she'll be a beacon to other women hoping to smash through the c-suite glass ceiling. Meanwhile, Connelly says she's committed to giving a boost to as many female pharma young guns as possible. "There's a new, plentiful generation of women in the groups that report to me," she says. "So I expect to work to ensure that many of them sit on our executive team in the future." 

It was Connelly's father who inspired her career path. Born to Irish-American Owen Connelly and Puerto Rican mother Dolores Montecinos in 1960—the middle child of nine—she spent the first 18 years of her life in San Juan. When it came time to leave the nest, Deirdre decided to head to the mainland, choosing Pennsylvania's Lycoming College after hearing about its accounting program from her father. Three accounting classes in, she switched her major to marketing and economics. 

"I love economics," says Connelly, with a smile. "It's just fascinating." 

Connelly, who is bilingual, also says the college's small size was a boon. "My older siblings had grown up in more of an English-speaking environment," she explains. In a smaller, more forgiving setting, she was able to approach professors if she was having trouble understanding lectures.  

Owen instilled in his children a sense of respect for the healthcare arena; several went into the industry, either on the pharma or physician side. One of Connelly's older sisters is a hospital rep for GSK in Texas. She was one of the first people Deirdre called when the GSK offer came—she wanted to make sure her sister was OK with little sis taking a job at the same company. "Though I didn't tell her I'd already accepted the job," she admits.  

The road to GSK began some six months before CEO Witty extended the offer. Connelly had been approached for the position by a recruiter, but was perfectly content captaining Lilly's team. However, a Wall Street Journal profile of Witty (and his efforts to steer the British juggernaut in a more global direction) caught her attention. "I thought, 'This seems like a guy you would like to have coffee with,'" she says. Soon enough, the two had a coffee date, originally slated to last 45 minutes. 

"We stayed for two-and-a-half hours," Connelly says, laughing. "We talked about everything pharma. It was fantastic."  

More to the point, Witty impressed her with his strategy of melding business and values, and putting the company's money where its mouth was. And he himself was new to the job; Witty had just taken over as CEO in May of 2008. Connelly saw an opportunity to slip into a leadership role that would put her in a prime position to drive GSK's global diversification strategy.  

Witty and Connelly's personal values were similar, as well: "For me, faith is important; family is important; integrity and transparency are vital too, so people know who you are and what you stand for. 

"The business we're in is very serious," she says. "People's lives depend on it." 

One year into the assignment, she's already a company woman through and through, preferring to talk up GSK's strengths and values rather than herself. She speaks at great length about the company "performing while transforming" in the US, as well as GSK's many Physician-Patient Assistance Programs (P-PAPs) and the volunteer work the company does.  

This emphasis on transparency cuts right to the heart of GSK's US strategy, which comes with its own acronym—TRIP (Transparency, Respect, Integrity, Patient focus). And though the patient comes last in that acronym, Connelly says the patient perspective is always foremost in the company's mind. So she champions Glaxo's Bridges to Access program, which offers non-oncology medicines to low-income patients whose medications aren't covered by insurance; CARES, a new program launched last month that offers oncology copay assistance; and several other similar programs, including a new offer to provide vaccines free-of-charge to eligible patients in the US. It all goes back to the company's raison d'être: "We bring medicine to people who need it." 

Other company outreach efforts include "Orange Day," during which teams of GSK employees around the globe pick a day to tackle a community project (on company time). Connelly has participated in several of these days, but two stand out in her mind:  

During a GSK sales convention in New Orleans, the execs took all 3,000 of the convention-goers to build bookshelves for schools still struggling to crawl out from under Hurricane Katrina's shadow. And they brought books to fill the shelves as well. "At the end of the night, we had thousands of books and hundreds of bookshelves," Connelly says.  

Another group she was part of built desks for schools in a similar predicament. "It made me miss the bookshelves," she says. "I volunteered to do the screws. I was drenched in sweat—it was better than my treadmill." Though Connelly says she doesn't do this volunteer work for the good press, it's an important part of educating the public about the good GSK—and pharma in general—is capable of. 

A large part of the aforementioned "transparency" comes in the form of a more flexible approach to intellectual property, especially when it comes to efficacy patents relevant to neglected diseases in developing countries. In January, the company made 13,500 malaria compounds available to researchers and set up an "Open Lab" (with $8 million in seed funding) to underwrite work on the most promising compounds.  

Another element of GSK's transparency is payment disclosure. With physician payment "sunshine laws" cropping up across the nation—and a federal act looming in Congress—pharma companies can either voluntarily shift their policies now or wait for government to give them a solid cuff to the head. Several companies have already switched gears, including GSK, which will report all payments to US healthcare professionals and publish the names of all its clinical trial investigators. Furthermore, as of 2009, they've placed a hold on all US political contributions. 

Connelly just celebrated her one-year anniversary with GSK—a tough year in which the world's fourth-biggest drugmaker has faced more than its share of disappointments and controversies. The FDA rejected restless leg syndrome drug Horizant (gabapentin enacarbil) in February for safety reasons. Meanwhile, antidepressant Paxil (paroxetine) lawsuits in the US and Canada continue to plague the company 

The biggest thorn in the company's side, however, is the resurgence of "Avandiagate." The first iteration of this problem took place in the summer of 2007, long before Connelly set foot on GSK's corporate campus, when FDA medical reviewer David Graham investigated evidence of an increased incidence of heart attacks among Avandia (rosiglitazone) patients. GSK claimed the evidence was inconclusive. The situation threatened to become another Vioxx situation—a potential disaster for GSK and its reputation for clinical integrity. FDA ended the tussle by slapping a black box warning on the diabetes blockbuster and making the company conduct another study of the potential link between the drug and cardiac incidents. 

Flash forward to February 2010 and the Senate Finance Committee's 342-page airing of grievances against GSK—grievances that include alleged "researcher-bullying" and study ghostwriting. The company has since been smacked around by the Senate and the media over allegations of "misrepresented" data on Avandia. This is a big test for Connelly's "patient first" philosophy. The company has struck back with a detailed 30-page rebuttal covering sponsored clinical trial evidence on ischemic heart risk dating back to 2000.  

"It's not uncommon for politicians to give pharma bad press—it gets them a few points when they're running their campaigns," Connelly says. "And that's okay. But people need to trust us. They need to know we are developing those medicines and approaching our mission with the greatest respect for them as patients." 

Compounding the effect of these legal problems is the patent cliff facing the entire industry. GSK lost Valtrex (valaciclovir) and antiepileptic/mood stabilizer Lamictal (lamotrigine) in 2009. It'll also lose the Seretide/Advair (fluticasone propionate/salmeterol xinafoate) combo after this year; antiviral combo Combivir (lamivudine and zidovudine) expires during or after 2012; and around 2013, two more antivirals and Zyban's (burproprion) formulation patents will go generic. 

Connelly sees these challenges as opportunities for GSK to prove its R&D mettle. The structure of the company's R&D division, headed by Moncef Slaoui, has undergone some drastic changes. The department now operates as a sort of miniature, centralized galaxy of biotechs—called Discovery Performance Units (DPUs)—each working on a particular project. The scientists are more like the first Apple employees than research machines: the atmosphere in these mini-biotechs is one of collaborating in a high-tech garage. "One of the buzz phrases we use is 'repersonalizing R&D,'" says Kevin Colgan, GSK's vp of External Communications. 

R&D doesn't just rely on internal discoveries. Like other companies, GSK is branching out through licensing deals and partnerships with academic institutions and those smaller biotechs they're mimicking in-house. Currently, the company has 47 outside partnerships, and that number will only grow going forward. 

While her background is in sales, Connelly prides herself—though somehow in a self-deprecating way—on being well-versed in the scientific complexities of GSK's drugs, both in the pipeline and on the market. She co-chairs an internal forum that decides which R&D projects to fund, which necessitates more than just a working knowledge of drug development. While she's not a scientist, she's more than happy to study up. "It's a lot of homework, but it's fascinating. I'm not afraid to say, 'I don't know—teach me,'" she says. "That's what I've always done before and will continue to do now." 

She advises all pharma up-and-comers—men as well as women—to adopt this philosophy. Other tips: "Take what you do very seriously, but don't take yourself too seriously. Be genuine and transparent and sincere. Work hard and do your job." 

Connelly doesn't lead what one might call a sedentary life. Her territory is North America, so she spends most of her time in the States—60 percent in Philadelphia, another 30 percent in Research Triangle Park in North Carolina. But because the GSK home office is in the UK, she also gives London about 10 percent of her time.  

When the nostalgia bug bites, she sometimes goes back to her rep roots and heads out for a day of sales calls. "It shows respect for my teammates," Connelly explains. "The job these guys have is not the job I had when I started 24 years ago." And these are not just ride-alongs, she adds. During these jaunts, she carries the bag. (The bag doesn't carry samples, though, since she's not registered for that.) 

One doesn't just jump back into the rep fray, of course. Connelly had to complete four hours of training for each of the two products she was presenting, as well as go through all the standard certification requirements. Since she'd never presented those products before, that added another layer of work.  "We bring medicine to patients, and that requires a lot of preparation," she says. 

Most recently, Connelly saddled up and called on eight doctors in north Philadelphia. She concealed her title—unless directly asked, of course. Doctors, she says, are typically agog when they discover GSK's president of North American Pharmaceuticals has come to see them, but Connelly always reassures them that the honor is all hers. She tells them: "You're our customer—I'm here so we can hear what you have to say." 

As head of GSK's North American pharma, Deirdre Connelly has the daunting challenge of trying to turn around the sluggish US market. If she succeeds, Connelly may find herself auditioning as the first female Big Pharma CEO.

Woman of the Year: Deirdre Connelly

Issue PDF

Pharmaceutical Executive Digital Edition - April 2010

As the pharmaceutical industry seeks to transform drug development, there is a growing consensus that traditional cost-cutting and productivity-enhancement methods have largely run their course. There are, however, an array of new business tools and platforms that can help companies leverage their assets more effectively in managing the three principal sources of risk that currently interact to push drug development costs higher. These are: 

The uncertainty related to accurately assessing a candidate drug's clinical utility and value			

 The logistical and management challenges involved in delivering robust clinical information about a candidate drug to the right sources, in a timely manner 

 Exposures arising from imbalances between the fixed-cost base that supports operations and the requirement to deliver clinical results that are useful and relevant to regulatory decision-makers.  

Industry has little choice but to adjust to this segmentation of risk. New development models can help redefine the boundaries within the traditional pharmaceutical business model, and answer the key question of what a pharma company must own to gain competitive advantage, and what portfolio, operational, and resource risks can be hedged through risk-based partnerships. 

Through changes that involve more structured access to resources, better deployment of capital as well as development of new monitoring and evaluation systems, companies will find they can shed the bureaucratic, large-scale, fully integrated business model and move to a nimbler, more modular way of leveraging resources to increase the value of their clinical programs and assets. 

Any risk-based transaction involves evaluating both the upside and the downside variance associated with expected outcomes. Exhibit I illustrates the major challenges and potential solutions for each of the three types of  development risk—portfolio, operational, and resource.  

 is the threat to moving assets through proof-of-concept and large Phase III studies, and on to the market in time to address imminent "patent cliffs."  Current constraints—including P&L pressure, cuts in development funding, and increasing regulatory and reimbursement expectations coming from the payer community —are yielding more late-stage failures and forcing companies to respond by concentrating risk in a limited number of development programs. 

Increasingly, companies are mitigating this risk by building networks of allies with access to both capital and risk-based services. This approach stretches development budgets and releases the latent value in the portfolio without increasing exposure to failure. It provides more "shots on goal" through better focus and shared deployment of resources. 

 have traditionally centered around outsourcing isolated elements of the clinical development value chain, such as data management and site startup.  This parceled approach has often led to higher costs, a dilution of accountability, and massive inefficiencies throughout the process. Over time, this has institutionalized a risk–reward imbalance between partners that can undermine trust and create a disincentive to "manage out" an unacceptably high variance in operational outcomes.  

In spite of the industry's greater focus on planning and budgeting for clinical trials, median time frames  and sharp variations in clinical development costs remain unnecessarily high. When pharma was a high-margin business, these variations—a latent exemplar of organizational inefficiency—went largely unaddressed.  But they are no longer possible to ignore, as the cost and operational unpredictably of trials are incompatible with today's less profitable business model.  

Several recent case studies show that limited control over operational risk significantly impacts clinical trial time lines, costs, and management overhead. Addressing this element of risk is therefore a key element in transforming the clinical development model to reduce time lines and cost variability—and to recapture time-based competitive advantage. 

 arises from the misalignment between fixed, supply-side resources—including large, fully integrated business functions—and highly variable demand-side market fluctuations. Industry leaders are realizing the importance of using fewer fixed assets, and transforming fixed costs into variable costs. This involves moving specific parts of the business to a more differentiated base where clear lines of responsibility serves as a way to manage market volatility. 

One emerging trend is for pharma leaders to build networks of allied organizations to absorb and integrate potential non-core functions, such as data management and sales forces. By transforming fixed costs in this manner, companies will find that they can limit exposure to redundant cost risks and respond rapidly in an environment in which change is a constant factor.  

Although not insubstantial, direct cost savings from addressing operational risk are small when set against indirect reductions in overhead, recaptured opportunity cost and time based competitive advantage in reaching the market faster. Increased speed to market can yield overall savings of more than $1 billion, for a mid-size development portfolio—not a trivial sum. 

To understand the root causes of operational risk, Quintiles Consulting conducted interviews with cross-functional development teams at several companies. The survey found that respondents were outsourcing clinical development tasks in piecemeal fashion. The companies awarded tactical responsibilities in the clinical development value chain (such as data management or monitoring) to a range of vendors through a procurement process designed to minimize the cost of each step. After that, sponsors tended to recognize and pay for value based on completed "inputs" to the development process, such as the number of monitor visits or number of sites initiated.  

In several companies, the outsourcing process has evolved to cope with the disparate needs of different functions, geographies, therapeutic areas, and external service providers. In these cases, there is no longer a single way of doing business. Case studies show that many pharma organizations are structured to actively encourage up to 100 percent management overhead on outsourced trials, with functions and roles being duplicated depending on the composition of the various internal and external teams.  

Analysis shows that much of the behavior that drives this inefficiency is caused by a perceived risk–reward imbalance in these relationships, which reinforces a lack of trust and consequently leads to a high burden of internal oversight. This vicious cycle can institutionalize and perpetuate inefficiencies for the contracting company.  

Industry is exploring new approaches that reengineer the risk–reward imbalance through better alignment of incentives, that encourage a focus on outcomes-based metrics. These are more effective vehicles for delivery due to three factors: First, they increase the accountability of the service provider for solving operational problems, rather than simply taking direction from the sponsor; second, they encourage a deeper exploration of design and operational feasibility between the service provider and the sponsor prior to starting the trial; and third, they rebalance the risk inequity by imposing real penalties for late delivery of agreed outcomes.  

Under outcomes-based pricing and management models, service providers promise discrete outcomes in the form of agreed-upon units of measurement (such as a randomized patient), with minimal sponsor oversight. This "risk trade" transaction model radically changes pricing, moving away from costs based on a unit activity (such as a visit) and associated change orders, and toward a price to adopt the risk of guaranteeing an outcome (such as providing an FDA-auditable data set by a specific date).  

As part of the "risk trade" transaction, service providers must agree on a more equitable level of control over the design and execution of a trial, sufficient to keep the risk to an acceptable level for both parties. This usually involves a greater degree of integration in planning and design activities such as feasibility and site selection.  

As yet, no Big Pharma company has solved the problem of owning the entire risk in the value chain by working in alliance with service providers in that chain. Recently, however, several companies have launched transformation initiatives, some involving relatively radical departures like outcomes guarantees. While most of these initiatives are still in the pilot stage or apply only to a small part of the business, their rationale is already clear: 

 To transform the rules of the game for drug development in order to unlock the latent value in the portfolio within fixed or shrinking budgets and development organizations

 To determine the optimal unit of outsourced work, who is responsible and accountable for delivering it, and what degree of autonomy/oversight is required to balance efficiency, control and risk. If the ultimate deliverable is an agreed outcome at a specific time, the new operating principles shift variable price inputs to the trial to fixed price outcomes, thereby redefining the answers to these questions. 

 To mitigate the inherent risks in outcomes-based models. In order to do this, the traditional role of the sponsor and service provider will need to be explored. Changes will likely cover variables such as site selection, start-up/close-out timeliness, monitoring efficiency, and execution flexibility. Contracts will likely be based on the time value of outcomes.  

Insights from the successes and failures of these pilot projects will lead to refinement of new operating models and usher in a new paradigm for drug development. In an era of constant change, those organizations that can nimbly manage the three dimensions of development risk (portfolio, operational and resource) will emerge as winners. The key question facing development leadership teams is how to rebalance risk to meet this challenge and ensure a project's viability and competitiveness.  

Adrian McKemey is a Managing Director with Quintiles Consulting and leads the Product Development and Commercialization Practice. Badhri Srinivasan leads the Enterprise Transformation Unit, an organization dedicated to mining the experiences accumulated over 10,000 clinical trials. Peter Payne leads efforts on assessing, mitigating and pricing asset and clinical development risk to support risk sharing initiatives at the portfolio, operational and resource level.  

Re-examining service provider roles can bring safety and speed on the road to registration.

Managing the Three Drivers of Risk in Drug Development

To climatologists, April is a transitional month, when the frozen fields of winter yield to showers that prime the soil for renewed growth. This month's issue of Pharm Exec tracks this same timeless pattern, but in reverse. Two feature stories illustrate how the next generation of industry leaders is managing the change from an era of plenty to today's harvest of scarcity, where the soil for science is fallow and the seeds of drug discovery take much longer to root.  

Our cover profile of 2010 HBA Woman of the Year honoree Deirdre Connelly of GSK, and a Q&A with Pfizer's Specialty Care business lead Geno Germano, both suggest that success in this harsh commercial climate depends on one overriding factor: the ability to read, interpret, and anticipate business conditions through the eye of the customer. This skill is followed closely by leadership acumen, where top management must set the example for clarity, consistency, and integrity in meeting business objectives.  

Connelly's background makes her one of the few industry leaders with direct experience in the human resources function. HR has been a neglected aspect of management in flush times, but one which should garner increased visibility as companies look to wrest higher productivity from a smaller work force. One testimonial cites her approachability to junior staff, based on a simple reference point: "I don't know—teach me." Few words matter more now that responsibility for executing strategy is being pushed to a new generation of "empowered" managers often barely out of their thirties.   

An adjunct to Connelly's curiosity is Geno Germano's commitment to the "light touch" in meeting tougher standards for access to high-priced specialty medicines. Strong analytics are critical, but represent a defensive mindset. Obtaining a premium price based solely on quantitative evidence of "value differentiation" is going to be much harder when it is sown in the parched terrain of patent expiries and genericization. It's best to venture a step beyond economics to mobilize the people power that drives partnerships. As Germano notes, this requires costly, time-intensive investments in human capital, where customers are engaged at an early stage in the product development cycle and are bonded to a service orientation that involves the entire resources of the organization for the long-term. It's a strategy drawn to complement the human profile—in other words, "customer facing."   

The competitive advantage from embracing insight and intuition to get closer to customers is hard to quantify in the standard business plan. But a third feature this month, on the brave "neuro" world of cognitive enhancement therapies, suggests there may be a solution at hand. You guessed it: a new drug. Senior Editor Walter Armstrong tracks the scientific hurdles, ethical dilemmas, and regulatory fault lines confronting the evolving field of cosmetic neurology. Big Pharma is exploring potential applications against age-related conditions, but full use of the brain's softer right hemisphere is going to be needed to anticipate the reputational mine fields of spending scarce research dollars merely to make otherwise healthy people "smarter."   

The April issue ends with a pessimistic brief examining the work of Lilly executive Bernard Munos, on the scope of the industry's productivity challenges in conducting R&D. Munos' calculations lead him to conclude that industry must embrace a new research model, as current efforts to address the gap in NCEs —including mergers, out-licensing, and cost cuts—are insufficient when measured against the impact of a risk-averse regulatory and payer climate. He notes that the trend toward industry consolidation is dangerous. Despite rhetoric to the contrary, no large organization has the tolerance for the "disruptive" innovation that tends to produce the most medically significant breakthroughs.   

From the Editor

Success in this harsh climate depends on seeing business through the eye of the customer

A Challenging Harvest

"Industry is caught in a pincer between [a drug] output that is essentially linear, and likely to remain so, and a cost of producing [drugs] that is increasing exponentially. At some point, the situation will become untenable. This could tempt investors to force wholesale change onto the industry unless the industry pre-empts them with radical initiatives." So concludes Bernard Munos, a strategic advisor at Eli Lilly, in a recent 

article on drug discovery. "Lessons from 60 years of Pharmaceutical Innovation" is a deep statistical dive into the performance of the integrated R&D model from 1950 to 2008, delivering an iconoclastic analysis, supported by surprising facts and provocative recommendations. Here we offer Munos' four main takeaways. To read the entire study, go to 

Figure 1: FDA approvals of new drugs, 1950–2008 

Since 1950, a total of 1,222 new drugs (1,103 small molecules,  119 biologics) have come to market. The annual rate has remained surprisingly constant, except for a 15-year bump that peaked in 1996 when there were 51 approvals—a result of FDA clearing its big backlog. This long view contradicts received wisdom that productivity is cyclically depressed. "If nothing that drug companies have done in the past 60 years has succeeded in raising mean annual output, there is not a high probability that established strategies will change this now," Munos writes. "This suggests that this output … reflect[s] the innovative capacity of the established R&D model." 

Figure 2:  Estimates of development cost of a new drug, 1950–2008

The industry's annual investment in R&D has grown dramatically over six decades, reaching $50 billion in 2008. Recently, the cost of bringing a single new drug to market has more than doubled, from $1.754 billion in 2000 to $3.911 billion (adjusted for post-approval R&D, new indications, non-US approvals; success rate; inflation; regulatory cost increases). Only 27 percent of all new drugs cost less than $1 billion to develop, while only 21 percent become blockbusters—a rate that has not improved over 20 years, despite the increasingly sophisticated sales forecasts and market analyses to increase predictions of success. This cost-to-productivity ratio is inadequate to secure the future of the industry, says Munos. 

Figure 3: The average impact of M&A on small and large pharmas

Getting bigger has been no better at upping output than spending more. In fact, the Big Pharmas that have grown organically rather than through M&A activity have outperformed the high-dealing firms (based on an analysis of 24 acquisitions, six mergers, and 10-plus years of before-and-after data). "Only small companies show a slight, but significant, increase in new drug output. For large companies, M&As do not seem to create or destroy value.... [Their] impact can be summarized as 1 + 1 = 1," Munos writes. But industrywide consolidation could have an overall negative effect on productivity. Munos detected an unexpectedly close correlation between the number of new drugs produced and the number of companies operating in any given year.  "A larger number of companies [may] accelerate the acquisition of knowledge, creating...a spillover—an industrywide benefit that enables all companies to be more productive." 

Figure 4: Predicted income for the top 13 pharmas, 2009–2018

The patent cliff over which the industry is currently plunging is likely to result in a 5 to 10 percent loss in sales and a 20 to 30 percent loss in net income between 2012 and 2015. Sales should recover through 2018, but income may continue to suffer, clawing back only 5 percent. That scenario will make any pharma CEO tremble. "If the performance of the current business model cannot satisfy stakeholders, M&A are not a solution, and the process improvements and cost-cutting measures commonly used cannot make a sufficient difference, perhaps the industry ought to embrace a more radical change and seize the opportunity to redesign the model," writes Munos.  

»  "Venture outside [the] comfort zone" when redesigning its engine of innovation. 

»  Embrace experiments like open-source R&D, innovation networks, and public-private partnerships to "harness the 'global brain" and access the best science. 

				» Increase the odds of breakthrough discoveries by creating "a separate, protected area the sole purpose of which is disruptive innovation."			

				»  Cut back on the process culture that "create[s] little value in an industry dominated by blockbusters."			

Back Page

Big thinker Bernard Munos delivers the goods.

How to Save Your Drug Company

FDA wants more respect and less second-guessing of its regulatory actions. The strategy is to build in-house scientific expertise and improve evaluation methods so that a decision to approve a drug for market—or to require postmarketing studies—doesn't draw criticism on the political front or challenges from experts with differing opinions.  

Strengthening FDA's science base has been a leading theme for Commissioner Margaret Hamburg since she took the helm at the agency a year ago. Hamburg has gained modest recognition for this effort from the Obama administration, which earmarked money for a small science program in the 2011 budget plan, and from the National Institutes of Health (NIH), which is funding research on ways to improve the science of evaluating new drug safety and efficacy.  

Up until now, the field of regulatory science has not received the resources, or the intellectual energy, that it deserves, Hamburg stated in announcing the FDA-NIH collaboration in February. "We have allowed the arm of regulatory science to become weak and under-developed," she said, adding that if this situation is not fixed "we will row in circles." 

Hamburg and others are dismayed that the nation's huge investment in biomedical research, epitomized by decoding the human genome, has not translated into important new treatments. For that to happen, Hamburg stated at a February meeting of the Personalized Medicine Coalition (PMC), biomedical discoveries "must be married to a robust investment in regulatory science." This includes developing new tools and standards to assess medical product safety, effectiveness, potency, quality, and performance. Hamburg is looking for standards for novel cell-based therapies, reagents to test flu vaccine potency, and strategies for screening compounds for serious adverse events, among other advances.  

Regulatory science is key to advancing personalized medicine by providing the research community with a better understanding of the genetics of drug metabolism and an idea of which patients may be at risk for adverse effects from a particular drug, Hamburg explained. The discovery of genetic markers, for example, has led to labeling to prevent use of certain colon cancer drugs by patients with the K-RAS mutation, who are unlikely to benefit. And biomarker validation projects have produced new rodent assays that can pick up early signs of kidney toxicity.  

Hamburg promises to issue long-awaited draft guidance this year on biomarker qualification and the co-development of drugs and diagnostics. At the same time, the commissioner is seeking agreement across FDA centers about the kind of evidence needed to rely on a test result to shape a drug trial, or product approval and relabeling. Hamburg also plans more guidance on clinical trial design—particularly for smaller trials—and more flexible endpoints for rare disease treatments.  

Because FDA has very limited resources to expand its scientific capabilities, Hamburg is looking for assistance from other government agencies and from industry. In February, Health and Human Services (HHS) secretary Kathleen Sebelius joined Hamburg and NIH director Francis Collins in announcing a collaborative effort to promote regulatory science and ensure speedier patient access to therapies. The three-year, $6.75 million program is tiny by NIH standards, but won praise as an important first step towards developing new approaches to biomedical product development. NIH and FDA are providing $2 million and $250,000 each year, respectively, which will support two or three annual grants to academic researchers.  

Collins and Hamburg will co-chair a Joint Leadership Council composed of leading scientists from both agencies. The council will define the research agenda with help from the broader research community at a public meeting this spring. The panel also will encourage NIH officials to consider regulatory issues in building the institute's research programs, and seek to integrate the latest science into FDA's review process.  

Many of these issues were examined at a workshop sponsored by the Institute of Medicine (IOM) Drug Forum in late February. That group has been discussing the need to improve FDA's science base since it issued a 2007 report on drug safety, which highlighted this gap in agency expertise. Hamburg noted that FDA's partnership with NIH might provide a model for similar relationships with other government agencies, such as the National Institute of Science & Technology (NIST) and HHS' Biomedical Advanced Research & Development Authority (BARDA).  

Despite Hamburg's vigorous campaign to strengthen science at FDA, the commissioner has limited resources to carry out her plans. The Obama administration's FDA budget plan for 2011 provides $25 million for an Advancing Regulatory Science initiative—an amount that reflects the overall squeeze on FDA funding for next year. Only by collecting $1.5 billion in user fees does FDA's total budget reach $4 billion, representing the 25 percent increase highlighted by the White House. With just a 6 percent rise in appropriations, FDA barely breaks even, explained consultant Steven Grossman.   

Moreover, much of that $25 million is targeted to specific projects, such as improving FDA expertise in nanotechnology and stem cell research, and setting standards for biosimilars. FDA chief scientist Jesse Goodman would have $3 million to oversee research and collaboration. But there's a paltry $4.5 million allocated for FDA's much larger Critical Path Initiative, which has been struggling to support biomarker validation collaborations and to modernize clinical research.  

The proposed amount will enable FDA to bring in a handful of scientists to bolster these initiatives, expand staff training, and provide support for research projects. There is talk of forming a network of academic "centers of excellence," and of an independent research entity to help FDA answer tricky questions about product efficacy and safety—but those require much more money to move off the back burner. At the IOM workshop, HHS deputy secretary Bill Corr emphasized the administration's commitment to these efforts, describing the admittedly modest funding of science at FDA as a "foundation for more to come." 

However, some policymakers are skeptical that FDA needs more resources to do its job. Rep. Rosa DeLauro (D-CT), chairman of the House Appropriations subcommittee that oversees FDA funding, declared that "FDA has many problems that won't be solved by throwing money at it." DeLauro is unhappy that drug safety issues continue to erupt, and that FDA has trouble implementing programs that are already on the books.  

One optimistic note, observed Eli Lilly vice president Gail Cassell, is that other government agencies such as NIH and BARDA are becoming more aware of FDA's importance in developing new therapies and countermeasures against biological threats. Cassell recently chaired another IOM meeting on strategies for developing medical products for public health emergencies, which examined FDA's critical role in facilitating access to such treatments and to products with low commercial viability.  

Hamburg acknowledged that current initiatives don't provide enough money to do all that needs to be done, "but it's a start." At a minimum, the commissioner hopes to systematize how the agency addresses regulatory science and expands collaborations with external partners. The larger task of restoring the confidence of policymakers and the American people in FDA requires sustained funding and autonomy to do its work without being "buffeted by outside forces."  

But even modest funding for regulatory science will draw the attention of academia, noted New England Journal of Medicine editor Jeffrey Drazen. And, he added, it may help get the politicians off of FDA's back. 

's Washington correspondent. She can be reached at 

Washington Report

FDA Commissioner Margaret Hamburg looks to bolster the agency's scientific expertise.

Science to the Rescue

Dutch specialty pharma Eurand was initially formed years ago as a leverage biopharma offshoot from Wyeth. The company now has its own pancreatic enzyme on the market—Zenpep (pancrelipase) was approved by FDA last August for treatment of exocrine pancreatic insufficiency (EPI). Patients with EPI, which can be caused by genetic disorders like cystic fibrosis (CF) or be symptomatic of conditions like alcoholism, do not produce the enzymes necessary to digest food and therefore need supplements like Zenpep.  

 Michael Walters, Executive Vice President of Sales and Marketing, Eurand			

The company has also taken the unique step of releasing an authorized generic along with the branded drug. Eurand Executive Vice President of Sales and Marketing Michael Walters talked with Pharm Exec about the thought process behind this novel strategy. 

: Was your first mode of attack to educate the physicians and the specialists about this drug? 

: Awareness was certainly higher for cystic fibrosis; but it was very low within the gastrointestinal (GI) market segment. The GI market segment is built of gastroenterologists and primary care physicians. Those are the physicians treating EPI due to other conditions. 

We made conscious decisions to deploy two dedicated sales forces to physicians: One into cystic fibrosis, and one into the general GI market. There were already people within Eurand with both expertise in the cystic fibrosis area.  So for the launch of Zenpep, we expanded that number from about six to 16 field reps. 

In the case of the GI market segment, so that we could really link approval and launch, we leveraged the experience of Innovex to recruit, to train, and deploy 49 people into the GI market segment. 

With these two segments, it's essentially launching different products, because the ways in which physicians use these drugs—and the ways they perceive the drugs—are very different in cystic fibrosis versus GI. 

If you look at the GI market segment, for example, what we saw were two discrete "buckets" of business.  One was a group of prescribers who were clearly promotion-sensitive. The others were more price-sensitive—these were the doctors who prescribed less often.  

Now, if you looked at the number of doctors you'd have to touch, we were  seeing about 33,000 as the market. So one of the things we asked as we looked at this segment was, "How do we begin to develop specific tactics and tools that will support the sales representatives in this more promotion-sensitive element?  And how do we do the same through non-personal promotion in this more price-sensitive area?" 

: When Zenpep was approved, one of the tactics we used was to come out with an authorized generic—but only for the low-dosage strength. An authorized generic is not new, but it tends to be an end-of–life cycle tool. As we launched Zenpep, we saw we had a product that had very high share among lower decile doctors and, with these doctors, very high usage with our low-dosage strength. So with this strategy, physicians could essentially move from one low-price product to another, and we could rely on some of the same non-personal drivers to flip this business. 

Generics are positioned differently in the marketplace with respect to copays; therefore, you really can provide a solution to patients by providing a low-cost product with a low copay burden, and cause little disruption as you move your old business to your new FDA-approved product. But again, we did that for one strength only. 

: Was there any worry about the other strengths? 

: No. One of the things that came out of research is that patients are very focused on pill burden. And the doctors who are more promotion-sensitive tended to write the higher dosage strengths.  So we weren't concerned about cannibalizing the high strengths with the lower strength. 

: Eurand won't have a direct-to-patient campaign, but will you jump into the online fray? 

: If we look at cystic fibrosis, there really are great reasons to took to an online vehicle. One of the big concerns with cystic fibrosis is cross-infection.  Patients with cystic fibrosis, unfortunately, become chronically infected with pseudomonas, which causes a loss of lung function over time and is linked to probably 80 percent or more of the mortality in CF. Hence, the centers don't want CF patients interacting in the same room, and so we do see that there is a very vibrant online community within CF. 

If you look at different online vehicles, Twitter and Facebook are great for getting information out; but if you contrast them to blogs, which we see more in the CF world, that's a more dynamic environment. So in CF we see the blogs as an area where there is a lot of patient activity and a lot of family activity, compared to Twitter, Facebook, etc. What we want to do is build awareness of our brand and, more importantly, knowledge of the product. So we need to position our messages near those blogs. 

Of course, having said that, in the GI segment you also have some patients with EPI due to alcoholism; online isn't a good way to interact with that group of patients. 

: When you talk about messages, do you mean display ads? Is this something you've rolled out yet? 

: It is something that we have rolled out, and it's something that we've gotten very good feedback on. As a matter of fact, one of the things that we do is try to understand what would take a person to our site. Now we know that 

 has directed people to our site; we even know what percentage of people it has directed to our site to gain more information. 

: Are there any ideas of partnering with them to make something like a "patients like me" CF channel? 

: Yes. Rather than trying to invent something, we want to rely on something that the CF community is already using, and that's why we've gone the route we have. Previously, a lot of the supplemental enzymes would be broken down before they ever reached the site they needed to in the small intestine.  

: How does this drug differentiate itself from the competition?  

: Unfortunately, a lot of the previous supplemental enzymes were broken down in the acidic environment of the stomach before they ever reached the site they needed to treat in the small intestine. Hence the advent of enteric-coated enzymes. Zenpep, importantly, is not just an enteric-coated enzyme. Pancreatic enzyme products today contain three key enzymes: amylase to dissolve sugars and starches; protease to break down proteins; and, importantly, lipases to break down the fats.   

What happens is lipases are unstable in the stomach. They're unstable in an environment where there's a very low pH, which is very acidic. So before there were enteric-coated enzymes, people would have to take large quantities of enzymes but, Zenpep is an enzyme that was developed to meet an FDA guidance issued in 2004 to ensure conformity to the official product label. Why is that guidance important? It's about the manufacturing of enzymes. Because enzymes are inherently unstable, and manufacturers would overfill to deliver the label amount of lipase. Under the USP Guidelines the overfill was something like 165 percent of label claim. So a product that claimed 10,000 units of lipase could have 165 percent of that amount, if the product was new. On the flip side, if it was an old product, it could have as little as 90 percent of the label requirement: in the example I just gave you, a 10,000 label, 9,000 units. 

Thus, FDA guidance stated that  for a product to remain on the market, manufacturers had to submit NDAs and develop products that were sufficiently stable to have zero overfill.  That is to say, the product had what was on the label. 

Columns

Dutch pharma releases the same drug as a brand and a generic. Will this two-pronged attack work?

Twice as Nice

Is President Obama popping the stimulant Provigil? The gossipy Daily Beast Web site floated that question in February following the release of the president's annual medical exam, including the notation "jet lag/time zone management, direct physician prescribed program, occasional medication use." The Cadillac of cognitive enhancers, Provigil has a narrow indication (excessive daytime sleepiness associated with narcolepsy, sleep apnea, and shift work), but a wide off-label reach because it is generally viewed as improving on the drawbacks of Ritalin and other amphetamine-type drugs—less of a rush and crash, fewer jitters, and allegedly minimal abuse or addiction potential. The little white pill with the sleek name comes closer than any other drug to conferring control over the body's sleep cycle. 

That there is a significant craving for such control, especially among professional elites in a world increasingly defined by frequent global travel and a nonstop stream of digital information is abundantly evident. Approved in 2002, Provigil has enjoyed phenomenal sales growth: $5 million in 2005, $1 billion in 2009, and projections of $7 to $10 billion by 2018. Along the way, it has turned Cephalon into a top-10 biotech. The Philadelphia-based firm has returned the favor by nearly tripling the pill's price, a move that scarcely made a dent in its off-label use, which accounts for 90 percent of all prescriptions.  

Boosting the brain artificially is as commonplace as the consumption of caffeine and nicotine, but the off-label use of drugs for lifestyle enhancement remains officially off-limits. The medical establishment, the drug industry, and FDA have all strictly hewed to the time-honored disease model of healthcare. Yet after a decade in which consumer demand has risen to a din, Provigil—or, more specifically, Nuvigil, the new longer-acting version—may prove to be the tipping point, the right drug at the right time to shatter the old paradigm. Last year, Cephalon applied for the first "medical treatment" for "jet lag disorder," potentially opening the floodgates to the first neuro-lifestyle indication and a market of tens of millions of travelers. 

The significance that FDA attaches to this decision was signaled by its granting the submission "priority review" status typically reserved for serious or rare diseases. The agency's ambivalence about approval may explain why it then missed the deadline by months.  

"FDA is in a real quandary," says Anjan Chatterjee, professor of neuroscience at the University of Pennsylvania medical school. "If they open a regulatory door to cognitive enhancement, even a crack, the genie will be out of the bottle once. On the other hand, there's a larger public health imperative to do something because so many people are already using these drugs." 

Public speculation that Obama uses Provigil is only the most novel evidence that cognitive enhancement (CE) has hit critical mass, both as an industry and as an issue. Surveys regularly show the use of ADHD drugs by the nation's exam-cramming college students at seven to 25 percent. In 2008, the journal 

 reported that in an informal tally of 1,400 readers, 20 percent said that they use Provigil, an ADHD drug, or a beta-blocker to "improve concentration" at work. Meanwhile, 

 a Silicon Valley webzine, reported that local entrepreneurs increasingly equate Provigil with a competitive edge. Many users admit to acquiring the drug over the Internet or on the street, where quality and safety are a crap shoot.  

Cognitive enhancement is a $20 billion market of aging Boomers, cramming students, global travelers, and battling soldiers. What's pharma going to do about it.

Pharmaceutical Executive-04-01-2010