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Pharmaceutical Executive Digital Edition - June 2011

The main solution to the nation's opioid abuse epidemic is for pharma companies to devise educational programs for physicians on the dangers of overuse, misuse, and abuse of these widely used painkillers. As part of a White House program to reduce prescription drug abuse and addiction, FDA wants industry to develop educational materials that will make physicians and consumers more aware of the dangers of opioids, as well as their appropriate use in treating pain. This communications program is the main component of a Risk Evaluation and Mitigation Strategy (REMS) to promote safe use of extended-release or long-acting opioids, which have been the subject of FDA/industry negotiations for several years.  

FDA estimates that more than 33 million Americans misused these painkillers in 2007—up from 29 million five years earlier. These drugs are associated with more emergency room visits, and unintentional overdose deaths involving opioids nearly quadrupled from about 3,000 in 1999 to more than 11,000 in 2007. Drug treatment programs are seeing more young patients coming in either addicted to opioid prescription drugs or in the first years of heroin use that started with opioids, explains Deni Carise, chief clinical officer at Phoenix House, a leading national drug abuse treatment provider, noting that "people think that taking a prescription drug is okay." 

Yet millions of individuals rely on these powerful painkillers to mitigate the pain of cancer, surgery, and other conditions, complicating REMS approaches. Patient advocates and physicians strongly oppose limited distribution or registration systems that could curb access to these vital therapies.  

Conversely, drug abuse groups want to expand the scope of the REMS to include immediate-release pain medications, such as short-acting Vicodin—the most widely prescribed drug in the US, with 131 million prescriptions in 2010, according to IMS Health. The new program is limited to extended-release opioids such as hydromorphone, morphine, oxycodone, oxymorphone, and tapentadol, because these contain a stronger dose of active ingredient and thus are more dangerous when abused.  

The REMS was announced in April by the White House Office of National Drug Control, along with other anti-abuse initiatives: the Centers for Disease Control and Prevention (CDC) will expand monitoring of prescription drug use, and the Drug Enforcement Agency (DEA) will crack down harder on "pill mills" and clinics offering easy access to pain meds. More federal and state "take-back" events will promote proper disposal of unused or expired medications, and state prescription drug monitoring programs will expand databases to track prescriptions and patient use. 

To better educate prescribers in the appropriate use of these medications and to alert patients to dangers of drug misuse, FDA wants generic and brand opioid manufacturers to collectively design materials for use by continuing medical education (CME) programs, which agency officials will scrutinize to ensure objectivity, accuracy, and absence of promotional bias. The industry group also will develop common elements for medication guides that pharmacists will give patients.  

In addition, companies will devise a collective strategy for evaluating the effectiveness of these educational and monitoring efforts in six months, 12 months, and annually thereafter to meet REMS Elements to Assure Safe Use (ETASU) requirements. Assessments will report on how many prescribers complete educational programs and the program's impact on patient access to opioids—for both appropriate and inappropriate uses. FDA has required similar REMS for two recently approved pain-relief products (Covidien's Exalgo and Purdue Pharma's OxyContin), and these would be incorporated into the new class-wide REMS. FDA wants to receive the industry REMS plan by fall so that the program can go into effect early next year.  

FDA adopted this moderate approach for the opioid REMS even though FDA advisory committees rejected such a voluntary educational campaign in July 2010 as too weak to curb abuse. But FDA faces fierce opposition from the medical community to any limited distribution system for opioids, and a broader program would create oversight responsibilities far beyond FDA's capabilities. FDA lacks authority to tell physicians what to prescribe, noted Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER). But FDA can require manufacturers to develop educational materials.  

The Obama administration proposes to put teeth into this educational campaign by asking Congress to mandate physician training on opioid use to obtain the DEA registration number needed to prescribe these and other controlled substances. But for now, training is optional for the 600,000 health professionals with DEA licenses to prescribe these drugs. In 2000, Congress approved legislation that requires eight hours of special training for physicians to prescribe and dispense buprenorphine for treating opioid addiction, but this involves much more limited drug use and far fewer physicians. The prospect of Congressional action in the near future is fairly dim, however, due to opposition to mandatory actions likely to limit access to pain meds from the medical pain community as well as manufacturers.  

Even though training is voluntary, requiring pharma companies to develop educational materials on opioid use for CME providers raises a host of issues regarding industry involvement in provider education. Most states require CME for physicians to renew medical licenses, which supports a vast physician education network involving both non-profit and commercial CME providers, many certified by the American Council for Continuing Medical Education (ACCME). An Institute of Medicine (IOM) report in 2009 called for eliminating all industry support of CME as the only way to curb drug company influence on prescribers, and many healthcare organizations are adopting such policies. Consequently, the $856 million that drug and medical device companies provided for CME programs in 2009 was down almost 30 percent from $1.2 billion in 2007; although declining, the amount still represents nearly half of the $2 billion spent on CME.  

ACCME expects pharma companies will provide independent support for opioid-related CME activities, and most doctors won't complain. Only 15 percent of physicians want to completely remove industry CME funding, according to a recent survey, although 88 percent acknowledge that commercial support biases educational presentations. Doctors evidently feel they can deal with pharma bias, and they don't want to pay more for these programs. 

FDA says it will review opioid course materials to eliminate any promotional slant, and ACCME cites a "firewall" policy that permits pharma to fund educational efforts without any say on content or presentation. FDA also may look to outside opioid experts to prepare some of the REMS training materials on prescribing to treat pain, which would moderate industry's role. "It is essential that the information be independent and avoid any commercial overtones," emphasizes CDER deputy director Douglas Throckmorton. Yet, the REMS plan raises objections. Rep. Mary Bono Mack (R-Calif.) complained to FDA commissioner Margaret Hamburg that the agency's actions merely "punt to the drug companies when it comes to prescriber education." 

Just how some 16 brand and generic firms will devise a single shared system for educating prescribers and patients, and for monitoring the program's impact, is fairly murky. While components of the educational materials and MedGuides will apply to all drugs in the class, each manufacturer also will have to provide drug-specific information. And a common approach is needed to obtain independent audits of training quality and impact and to survey continuing abuse and deaths.  

ACCME says it can support CME assessment by tracking how many physicians take training courses and how much they learn about opioid prescribing. Yet, each company will be responsible for providing post-marketing safety information to FDA on its particular products and will have to monitor CME programs.  

It remains to be seen how the opioid REMS affects industry involvement in physician training. "FDA endorsement of industry education should cause the critics of speaker bureaus and industry support of CME to embrace these techniques for improving patient care," says John Kamp, head of the Coalition for Healthcare Communication. "But I'm not holding my breath."  

Columns

FDA's opiod REMS implies there is still value in industry-sponsored CME

Educating Physicians

Organizations make strategic and operational decisions based on data. Poor quality data can negatively influence how a company is perceived in the marketplace; therefore, it is critical to ensure data quality is given the highest priority. With data standards development in the biopharmaceutical industry, there are now more opportunities for businesses to ensure data quality. 

Using standards can increase process efficiency and effectiveness, saving clinical trial data process lifecycle resources as well as improving compliance. Implementing standards, while a goal and a trend in clinical development, presents some key challenges, including how to leverage different standards across the development lifecycle. Genzyme has implemented or is in the process of implementing CDISC standards end-to-end, including PROTOCOL, CDASH, LAB, SDTM, ADaM, and Controlled Terminology as well as utilizing BRIDG as its underlying information model. To leverage the standards, we are building a Metadata Repository (MDR) to govern data collection, data processing, and data submission, and to leverage the usage of different standards enterprise-wide. In order to increase efficiency and effectiveness, a data validation tool is needed for improving data quality and ensuring data provided by one of Genzyme's many partners or by internal teams matches all specified requirements and ensures "quality by design." 

Data quality isn't just about the data. It is about people's understanding of what it is, what it means, and how it should be used. Poor quality data will: 

				» Increase costs through wasted resources, the need to correct and deal with reported errors, and the inability to optimize business processes; and 			

» Ensure lost revenue through customer dissatisfaction, lowered employee morale, and poorer decision-making. 

This is an event-driven, process-oriented world, and quality data will be essential to success. 

Data quality plays an important role in our business world as well as in daily life. Data quality is not linear and has many dimensions such as accuracy, completeness, consistency, timeliness, and audit ability. Having data quality on only one or two dimensions is as good as having no quality. There are many factors that influence data quality, such as data design, data process, data governance, data validation, etc.  

Data design is about discovering and completely defining your application's data characteristics and processes. It is a process of gradual refinement, from the coarse ("What data does your application require?") to the precise data structures and processes that provide it. With a good data design, your application's data access is fast, easily maintained, and can gracefully accept future data enhancements. The process of data design includes identifying the data, defining specific data types and storage mechanisms, and ensuring data integrity by using business rules and other run-time enforcement mechanisms. A good data design defines data availability, manageability, performance, reliability, scalability, and security. 

				» A set of processes that ensures that important data assets are formally managed throughout the enterprise; 			

				» A system of decision rights and accountabilities for information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods; 			

				» A quality control discipline for assessing, managing, using, improving, monitoring, maintaining, and protecting organizational information; 			

				» Putting people in charge of fixing and preventing issues with data so that the enterprise can become more efficient; and 			

» Using technology when necessary in many forms to help aid the process. 

Data governance describes an evolutionary process for a company, altering the company's way of thinking and setting up the processes to handle information so that it may be utilized by the entire organization. It ensures that data can be trusted and that people can be made accountable for any business impact of low data quality. To ensure data quality, data governance processes need to be developed.  

Data Validation is the processes and technologies involved in ensuring the conformance of data values to business requirements and acceptance criteria. It uses routines, often called "validation rules" or "check routines," that look for correctness, meaningfulness, and security of data that are inputted to the system. The rules may be implemented through the automated facilities of a data dictionary, or by the inclusion of explicit application program validation logic. 

What can help us to appropriately implement these data quality principles into the business process? We think it is important and useful to leverage industry common sense by implementing CDISC standards as a basis for data design and validation. 

The CDISC standards have been developed to support the streamlining of processes within medical research, from the production of clinical research protocols, to reporting and/or regulatory submission, warehouse population, and/or archive and post-marketing studies/safety surveillance. (You can find all CDISC developed standards at: 

.) Using standards proactively in clinical trial development benefits business in many ways (see graphic, adopted from HL7 RCRIM). 

With all these listed advantages for using standards, Genzyme has implemented or is in the process of implementing CDISC standards end-to-end. At the same time, we are building a Metadata Repository, which will help us to develop consistent and reliable means to apply standards in our business processes, and leverage information enterprise-wide. 

At Genzyme, we have developed a data governance process and are setting the process for data design from protocol development and data collection to reporting and submission.  

Data quality is an area fraught with tough challenges; for instance, the actual damage of dirty data isn't always that tangible. Using high-quality clinical trial data is very critical for the pharmaceutical industry. It benefits patients, sponsors, and regulator organizations. To improve data quality, data validation is a must-have process. This process can ensure correct metadata will be used in data collection, transmission, and data derivation processes, and can identify data outliers and data errors. Data validation generally can be defined as a systematic process that compares a body of data to the requirements in a set of documented acceptance criteria. With the development of many standard initiatives at Genzyme, we have implemented or plan to implement standard protocol, standard CRF, standard central lab, SDTM/ADaM, and many other standards. All of these efforts will help Genzyme to improve the data quality; however, to ensure we will have a data quality consistent with our standards as specified, a data validation tool is needed.  

The data validation tool (DVT) can provide data quality checks based on implemented standards and provide metrics to gauge our data quality. The vision and ultimate goals resulting from this tool are to: 

				» Evaluate CRF, Central Lab, SDTM, ADaM data, and define XML files against CDISC standards and Genzyme-specific requirements to ensure that Genzyme receives, produces, and submits quality data; 			

				» Align with Genzyme Metadata Repository to ensure metadata validation; and 			

» Automate and streamline data validation processes. 

By implementing standards, developing the data and process governance, defining the standard process, educating and training users, and maintaining the standards/processes, we will be able to reduce: 

				» Potential risk of accepting poor quality data from CROs; 			

				» Potential risk of analyzing poor quality data; 			

				» Potential risk of submitting low-quality data to regulatory agencies; 			

				» Potential risk of re-work or duplicate process on the similar data issues due to lack of data validation process; 			

				» Potential of low/no efficient data validation process; 			

» Potential for not using resources smartly. 

The end result? It will improve our business process efficiency and effectiveness and bring business ROI. 

Julia Zhang is Associate Director, Standards and Architecture, Global Biomedical Informatics, at Genzyme. She can be reached at 

Sue Dubman is Senior Director, Global Biomedical Informatics at Genzyme. She can be reached at 

The payoff is superior performance in key areas such as clinical trials

To Genzyme, Quality Data Depends on Quality Governance

Late nights in a dull and dingy conference room with your brand team, trusted partners, a stack of market research, and a pizza, carefully crafting your brand's positioning, could ensure that you'll not just win the sprint, but also the marathon. 

Matthew Mizer, Senior Vice President, Group Account Director | GSW Worldwide			

A crystal clear, highly focused positioning of your product is absolutely essential. It's often the cause of less than successful launches where follow-on products quickly take share.   It takes courage, diligence, and discipline to create a sharpened positioning statement that may not cast the widest net, but builds the strongest foothold.  There are case studies upon case studies of brands that were greedy, launching with the promise and pomp of an exciting new drug accompanied by a goal of owning a therapeutic area almost from the start. 

Customers don't always believe newer is better. 

By targeting the customer segment with the perfect marriage of unmet needs and opportunity for positive customer experiences, you begin your brand's life cycle with a solid group of advocates that can only grow. 

The more often utilized mass market approach, seeking the broadest path to the fastest share, often results in poor customer experiences from which it's hard to recover. 

This is where the courage comes in. Our instincts tell us to grab as much as we can, as quickly as we can, before anyone else gets there. 

The right patient and proper use of your product. 

Don't forget, it takes a lot more money to undo a negative customer experience than it does to get it right the first time. Most importantly, no marketing tactic in the world is more effective than your customer's word of mouth. Make sure their words are the ones you want to be heard. 

Carefully crafting your brand's positioning could ensure that you'll not just win the sprint, but also the marathon

Be Courageous

 convened on March 29 its annual panel of eight business development experts to crack the bat on best practice in licensing and M&A for the year ahead. What follows is a summary of the group's discussion, with the major conclusion being that the quest continues for that rare triple play: finding a good, well-differentiated asset; forging a productive partnership around it; at a price that compensates for the warp speed curve ball of risk. Now that the best deals are getting more scarce, it's no time for rookie performance.  

It is equally evident from the conversation that the external policy and regulatory environment still has a subtle but significant impact on prospects for additional momentum in the volume of transactions. Yet it looks like companies are settling for a smaller package overall, as players "slim down" to digest the spiraling impact of some of the major groundbreaking acquisitions over the past 18 months.  

Certainly the stars in the field are still well aligned: Big Pharma has the cash, while small biotech has the ideas without the assets to commercialize them. Our group consensus is the gap needs to be bridged—and at no time in recent vintage can a better case be made for enlightened government policies on IP, taxes, and other incentives.  But will election-year politics intervene and give the industry a bunt single rather than a home run? 

Forward-looking surveys such as the Campbell Alliance annual review of dealmaker intentions suggest that a fundamental change is under way in the targets for investment. At the same time, the volume of transactions has yet to mark a full recovery from the low point in 2009. Overall, does this mean that selectivity is now the most prominent theme in sealing a good deal? 

 Our latest analysis presents a mixed picture. There has been a recovery in deal volume from the low point in 2009, but that has to be evaluated in terms of which phase of the development cycle attracts the greatest interest. Our findings indicate that licensing activity for compounds in Phase III of development has been flat for the past two years. Conversely, Phase II deals experienced a sharp pickup last year, more than compensating for the near-collapse of that segment in 2009. However, this might be seen as a temporary trend, as it has not continued into the first quarter.  

What the survey is now showing is significant new interest in early phase deals. We see a return to seeking commercial potential in basic research, as a way to stay ahead in the competition for new treatments.  

Does this trend account for the commitment of Big Pharma in exploring new models of partnership in business development? 

Yes. It is driving the outreach to academic institutions around translational medicine and helping to refine priorities of corporate in-house venture capital (VC) groups. Companies are striving to be more strategic in evaluating targets among a complex set of opportunities and risk, by prioritizing the best fit around therapeutic classes. Surprisingly, previous winnowing out criteria like not being first in class counts less than finding the right disease segment, with a compound that fills an unmet medical need. We also found that the hype around companion diagnostics may be misplaced. These don't rank as high as a focus for in-licensing activity. What is attracting interest is antibody drug conjugates, where there is promising early-stage activity and not much on the market already.  

Is the growing concern about risk having any impact on the valuations attached to deals? 

Our survey finds that deal terms are trending down a bit due to a higher perception of risk. The risks include the escalating costs of clinical trials, crowded therapeutic categories and the space you have to launch, and the payer push-back on reimbursement. 

Todd Davis, Cowen Healthcare Royalty Partners: 

The cost of capital for Big Pharma is going up. This is particularly true if you are dependent on a single product for a double-digit percentage of your profits while a patent cliff is looming. Clinical benefit in a therapeutic segment where differentiation around medical need can be demonstrated is a driving factor in valuation because the biggest risk is not getting access to patients due to price. What is it going to take to get reimbursed? This is the fundamental question in asset valuation today.

 Another factor shaping valuation is the emphasis on targeted therapies; at least in theory, if the eligible patient population goes down, the value of the asset will go down too. But you have to balance that in the expectation that in some cases a targeted therapy will command a price premium because of superior efficacy. In addition, if the survey findings ring true, the budding interest in early-stage deals will by itself build higher valuations due to increased competition for the best candidates, while the valuations for the Phase II and beyond compounds will decrease due to less demand.  

Market dynamics do count. Is it a problem that the industry appears to be embracing the same approach to licensing? Like the "lemmings off the cliff" analogy, could we all be pursuing the same opportunities to the detriment of optimal returns?

Companies have different priorities even if the criteria in evaluating targets and opportunities are similar. That tends to keep things fluid. Another element is reputation: companies like Genentech or Shire have been able to establish themselves as "first to play" in specific therapeutic areas and thus people will tend to follow their lead.  

 The industry tends to talk to the same experts. It is not surprising that companies will form similar conclusions. On the science side, discoveries are made, the papers are written, everyone reads them, and judgments are made as to whether these open a new commercial pathway. Companies also know that valuations are determined in part by what Wall Street likes. People have to pay attention because if Wall Street is already fired up then the deal will be seen as attractive.  

 When we acquired TKT in 2005—a very good deal for the record books —the initial reaction from Wall Street was negative; it drove our share price down as the analysts did not understand the rationale for Shire wanting to be in the orphan drug space. Once we went out and explained how this acquisition fit our overall business plan the situation turned around completely. This reveals the importance of clearly communicating the ways in which your strategy differentiates you against the competition—and, actually, the orphan space is hot.  

With this initial discussion around the Campbell survey as background, can we now focus on your assessment of the most important drivers of action on the licensing and deal-making front this year?  

The industry is obsessed with managing risk, perhaps overly so. The desire to avoid it has never been higher. Companies are sitting on huge stockpiles of cash that they won't invest or will invest reluctantly. The US tax structure discourages repatriation of overseas profits but the larger explanation may be because the planning cycle is so unpredictable. Companies are retrenching in many areas that are seen as critical to future innovation, as evidenced by Pfizer's decision to trim upwards of $2 billion from its annual R&D budget. This has implications for jobs and economic growth here in the US but also in other markets that favor the biopharmaceuticals sector as an industrial policy priority.  

A key driver is the dawning awareness that the US is no longer going to subsidize the rest of the world in paying for pharmaceutical R&D. The domestic pricing environment going forward is likely to be much more like Europe. Anticipation of that is a key element why concerns about risk have increased. Likewise, the global consensus around IP is eroding and the impact of some changes could reduce the effective life of a patent by five years or more. Valuations would have nowhere to go but down.  

IP is vital to maintaining a credible planning cycle in an industry with such long-term payouts. Yet the trend in public policy is not to extend the period of exclusivity for small molecules and even to reduce exclusivity for new drug technologies like biosimilars. The Obama Administration thinks this will offer large savings to purchasers, but the rationale is wrong: Companies will be reluctant to invest in innovative new products for patients if the period of market exclusivity isn't sufficient to offset the cost and risk. So the savings the Administration is banking on may never be realized because the new products on which the calculation is based may not come to market.  

All of the areas where future growth is perceived to be high carry with them an equally high threshold of uncertainty and risk. The best example is the emerging country markets. Breaking out from the pack to succeed in China is becoming harder every day. What this means is it's more of a challenge for two parties to get to an agreement on valuing a deal, which is why about three-quarters of the deals being negotiated today include contingent valuation rights clauses, because uncertainty is so hard to measure.  

We also have to acknowledge the impact this has internally within many of the smaller companies in biotech, where you have a board of directors that expects the company to do the "big deal" and the management team which has to confront these on-the-ground realities. This perception gap is frequently overlooked as to why so many negotiations fall short of goal.  

John Craighead, Biotechnology Industry Organization (BIO):

 Public policy has a deep impact on industry investment. Large pharmaceutical companies are sitting on a lot of cash, but the unfavorable US corporate tax rate makes it more challenging to expand investment with this capital. One possible driver of success is to structure investments around offshore entities that moderate the tax exposure.  

 Another trend is the insistence of payers that new medicines demonstrate clear clinical differentiation against existing therapies. This poses more challenges to the drug developer, but on the positive side it forces everyone to be more innovative and demonstrate clear benefit to patients.  

The current pipeline emphasis on specialty orphan drugs has not been evaluated in terms of the impact on pricing and future innovation. The prices for many of these inventions are staggering, the treatment effect is sometimes quite modest, and the eligible population is low. If the industry allows the perception to root that these "designer drug" prices represent the norm, then it is in trouble politically.  

Considering that collectively these drivers are making the deal-making environment more volatile, what practical measures are companies taking to mitigate risk? 

Companies are doing more realistic evaluations to determine whether a licensing candidate is likely to cross the finish line in gaining registration approval. The key criteria is not being tagged as a "me too" product. The candidate has to be different and show a real clinical benefit to get paid. There is also a strong focus on new models for risk-sharing. These include monetizing existing royalty streams; moving beyond the traditional funding/financing models to embrace scalable, short-term JV financing linked to a defined outcome; enhancing the quality of licensing agreements through a contract approach; and leveraging contingent value rights (CVRs), which are licenses structured as a public security holding. In addition, more deals are being structured around rights that might vary by region. Although this requires a higher degree of complexity in the agreement, it can lessen risks. For example, obtaining rights in Europe is an easier play right now because much of the pricing risk we are confronting here in the US has already run its course there. The IP environment is also more settled in Europe.  

The outreach to academic institutions and medical centers is another way to address volatility in the environment. I wonder whether this approach might be better focused on the smaller biotech—or consortia that involve biotech, the academic centers and Big Pharma working together on projects that lead to proof of concept.  

There is reputational value in industry supporting the work of academia. The commitment is a modest one. Basically, these arrangements give the pharma company rights to examine interesting streams of research and to have right of first refusal for ideas that could eventually lead to a commercialized compound. It's all about early access at low risk. And we know that the VC community is less interested in early stage, so this fills a gap.  

 The best protection against risk is the new product that can be acquired or licensed right after FDA approval. Despite the other options, this remains the gold standard. The problem is there are fewer such products, which increases the appeal of these alternative approaches. 

 Risk mitigation is being advanced through good P&L management and new approaches to project financing [i.e. using other people's money]. But many traditional sources of outside funding are drying up; about a third of all VC firms are just not raising any new funds, or are exiting the biotech/pharma business altogether, with the remainder either decreasing the amount of their commitments or staying the same.  

Overall, our research at Cowen Royalty concludes that the VC community is at half the financing strength it once commanded. So if the VCs have walked away, and Big Pharma is not filling the gap, then the only option is to consider a new model. One such model is project financing with a shared platform, containing defined criteria for moving projects to the next stage of development , and a guaranteed exit where you can get bought out. 

Given the challenges of replacing the old VC model for financing licensing and M&A deals, what are the implications for the pace of future innovation in medicines? 

The obvious thing to say is, with less money invested across fewer companies, we are going to have less innovation. To reverse that mindset, new ways have to be found to convince investors to part with their cash. Co-investment is one way to build investor confidence and reduce their risk: another is to demonstrate differentiation as early as possible, not just in the clinical sense in treating the disease but in showing value against competing products and a path to reimbursement.  

 I am a little more optimistic. There will continue to be money for innovation, but the process has to adapt. Studies will no longer be structured to ensure the best arguments to secure registration, but to provide real learnings for the entire scientific enterprise. That's just one change that must take place to maintain the industry's credibility.  

The US government is not creating a policy environment to support innovation. The debate is all about limiting budgetary exposure to high-cost drugs. We are at the point where Medicare and other public payers might be motivated to encourage the FDA to refuse authorization for drugs because they don't want to be exposed to reimbursement. That's a cycle that only leads in one direction: less innovation.  

Is there no sense that increased federal financial support for drug discovery could help counter any pullback by a risk-averse private sector? 

The Obama Administration has proposed more funding for the National Institutes of Health, and much of this would be targeted to help facilitate commercialization of promising compounds. But this money is a drop in the bucket compared to what the private sector does already. And government support tends for political reasons to be widely dispersed, which means critical scale around the most feasible projects is lost. My company received $244,000 from the $1 billion appropriation for the therapeutic discovery tax program. Although it was appreciated, when the appropriation was distributed among the thousands of projects, the amount proved too small to make much of a difference to all but the very smallest companies. On the other hand, a better corporate tax rate linked to investments in R&D could free billions in new investor and industry cash now sitting on the sidelines.  

What government really has to focus on is identifying where the regulatory uncertainties are and building more clarity—predictability—into the approval system. 

 One other thing government can do is to end the cycle of litigation geared to limiting the period of exclusivity. Give the industry a fixed time for exclusivity, as in the European system, and make it strong enough that there would be no litigation within that time frame. Investors would respond by taking on a bit more risk.  

I agree, with a caveat that most politicians don't understand even the basic risk-benefit calculation that companies use to decide on investments. Members of Congress seem to believe that when the FDA approves a drug as "safe and effective," it is going to be safe just because the FDA decreed it so. Not true. The political rationale is disconnected from commercial reality; the politicians want from the industry radical innovations that cure or reverse the course of disease while expecting such breakthroughs will always be benign in terms of side effects and will cost very little in terms of reimbursement. We are moving to an environment where therapeutic assets are deployed by committee-think, and a single payer or committee could end up deciding what your product portfolio should be and what returns you will get from it.  

The defense industry already operates that way. The Department of Defense (DoD) is active in early stage research, establishes contracts to fund development costs, and decides as a sole purchaser what its price will be when the product is ready for deployment. It can often revise the contract to take account of things in the deal that didn't go well.  

 I assume we are unanimous in seeing the DoD as a poor model for the biotech industry. Our goal has to be to prevent the politicization of this business. It's already apparent at the FDA. Most of the reviewers and committees are objective and want to decide based on the evidence presented to them. It's Congress and the policy community that carries a different agenda. In practice, they can force the scientists to do what is expedient.  

Deflecting this negative trend set requires a strong outreach by the industry to build enduring partnerships. What are the elements of a good partnership? And what does senior corporate management think about your own function's value within the company?

 Shire lives and breathes from the practical value of partnership. We don't have a strategic focus on in-house research, so almost all that we do is focused on licensing and M&A. Rather than justify our existence, as is the case in other companies, we need to demonstrate that our deals deliver a return, contributing to our growth toward our current status as a $16 billion enterprise.  

The elements of a good partnership? The most important is good management and being sensitive to the culture of the other party in the negotiations. In talks with Big Pharma, you must be tolerant and flexible. While the biotech's project team may stay the same, thoughout the collaboration, the Big Pharma team is likely to shift a lot in terms of membership. You have to probe deep to find who actually makes decisions—and then once you know who it is, that person may leave. Or the portfolio that brought Big Pharma to the table with you may suddenly be adjusted and you find your therapy area is no longer a priority. The bottom line is building in the right governance structure, which can provide an agreed format to quickly resolve unanticipated issues.  

Features

With Yankee stadium as the backdrop, Pharm Exec convened its annual panel of eight business development experts to crack the bat on best practice in licensing and M&A for the year ahead.

2011 Dealmakers Outlook

Surveys show that most smokers (74 percent) want to quit, so it's not as much a question of "if" they should quit but "when" to do it—because they know how hard it will be. According to scientists, smoking is more addictive than cocaine, heroin, or alcohol. 

While smoking-cessation products have created a $2 billion market, these products have shown a significant failure rate, with many people falling back into the habit. 

Enter NicVAX, a nicotine conjugate vaccine. Four monthly shots can sufficiently block nicotine passage through the blood-brain barrier to prevent addiction for a full year, thus getting smokers through not only the initial and most challenging part of smoking cessation, but allowing sufficient time to break old lifestyle habits and transform into new ones as well.

 The NicVAX Program can provide smokers with a smoking-cessation offering that aligns with their needs and lifestyle: a product that will enable them to effectively quit smoking, available at a location convenient to their daily routines, and at no out-of-pocket cost to them. 

Pharmacists are now authorized to vaccinate in all 50 states and have played an increasingly integral role in successful influenza immunization programs. Many pharmacies now actively market expanded offerings of immunization and "minute clinic" services. The NicVAX Program could well focus on pharmacy implementation to provide smokers with optimum access to the vaccine. Insurers could provide smokers with further incentive by waiving any copay for the vaccine. 

Bigger and more personal than any one celebrity could possibly speak to. As such, the product is an ideal opportunity for more powerful customer engagement through social media with both site and messaging tailored according to a smoker's segmentation, based upon demographic and psychographic profiles. Participants in the NicVAX Program need not feel alone in their efforts with access provided to online and pharmacy programs. 

NicVAX is trying to buck the trend of smoking-cessation products' high failure rate

Drugstore Vaccinations

With vaccines come questions, heated debate, and controversy. Pharmaceutical company communicators must return the conversation to the ultimate goal— preventing disease. 

Nick Colucci, CEO & President | Publicis Healthcare Communications Group			

Gardasil entered the pharmaceutical market with welcomed anticipation—and it wasn't just because it was introduced as the world's first cervical cancer vaccine or because of its controversial nature. It was because the market saw a social/medical need. 

Tobacco use is a serious public health threat. It is the single leading preventable cause of death in the United States and responsible for more than 440,000 deaths every year. According to the Centers for Disease Control and Prevention (CDC), approximately 45.8 million US adults and 3.1 million high school students smoke, triggering some $75.5 billion in excess medical costs and another $81.9 billion in mortality-related productivity losses annually. Despite widespread knowledge of tobacco's dangerous health impact, many smokers are unable to quit, due to tobacco's addictive nature. 

The alarming gap in awareness is an opportunity for the industry to show leadership. The societal call-to-action requires getting the message out early to everyone charged with making a difference—hitting exactly the right chords with physicians, caregivers, and patients. 

Unbranded campaigns do society's essential health education heavy lifting. They set the tone for family kitchen-table discussion. Like the Viagra-effect, making it acceptable to discuss erectile dysfunction with your partner or your physician, disease-oriented, non-branded public campaigns make people think and talk. The Viagra-effect also brought patients into the physician's office, prompting identification of heart disease and diabetes, among other diseases. 

We as an industry must speak to indisputable and widespread health urgencies. The benefit of knowing that young people might be protected from tobacco addiction is life-saving. The reality is that there are health concerns we need to take on—despite the controversy—and pharma is using unbranded campaigns as a path toward unlocking inhibitions around sensitive health issues. Ultimately, that will translate into doing good and good business. 

Oftentimes, marketing a first-in-class drug also means raising awareness about a growing or little-recognized disease. Even after navigating regulatory hurdles, makers of innovator therapies must educate patients, physicians, and payers on the merits of their drug, and, as is often left to pioneers, create new understanding.

Before Viagra came along, the world had never heard of erectile dysfunction.   Heavy  advertising  and  other promotions   by   Pfizer   made   Viagra   a household name. 

First-in-class drugs may not ultimately be the best in class. Market share can easily be lost due to innovation. With the incredible pace of scientific research, each passing day leads to better understanding of a drug target—knowledge that may benefit the follow-on drug maker. To compete in the long term, companies must differentiate products. 

In the incredibly competitive autoimmune market, advertising and branding trends are driven by benefits. Although physicians and patients are always looking for new treatments, they remain reluctant to switch from therapies that show good results without solid proof that a newer biologic will improve care. For example, a novel, first-in-class biologic for Chrohn's disease with solid data had a slow uptake because side effects seemed worrisome. Gastroenterologists chose to exhaust use of existing anti-TNF therapies before trying a newer option. 

Sometimes great scientific studies or even superior dosing regimens aren't enough to grab people's attention. You have to connect with your audience, listen to their concerns, and together conquer a disease impacting patients' lives. To set autoimmune brands apart, advertising agencies need to mine a brand's unique story, which too often is buried beneath complex data. Strong data are the essential reason therapies reach market. However, clarity of communications sets them apart. In addition, we need to uncover the real needs of the patient, looking at them as a human being first. 

One of our roles as communications and creative experts is to communicate those unique brand differentiators in a relevant manner in order to connect and engage. Good data are a must—conveying patient value is the differentiator, and understanding creates societal benefit. 

Pharma company communicators must steer the conversation about vaccines to the ultimate goal-preventing disease

Branding a Unique Story

When Hungary took over the rotating presidency of the European Union (EU) at the start of 2011, it identified as one of its explicit priorities "a positive outcome regarding the draft legislation on information to patients on medicinal products."			

Nearly five months into its six-month term chairing the EU council, Hungary doesn't have much to report. It has not initiated a single discussion of the draft legislation among its fellow member states. 

Incompetence? Improvidence? Inertia? None of these things. 

Although the updated information rules were proposed as far back as 2008, Hungary is not to blame for the failure to move the legislation ahead. Its hands are tied by the procedures that govern the creation of new EU rules. 

As with all other EU legislation, the starting point for this proposal was the European Commission, the EU's central civil service. The Commission's 2008 proposal was duly discussed over the following two years in one of the EU's two co-legislators, the European Parliament. 

The discussions were meant to move ahead in the EU's other co-legislator, the council, which is made up of ministers from the 27 EU member states. But these discussions haven't started, because everyone is still waiting for the Commission to fulfil a promise it made in November 2010 to modify the proposal. 

It was John Dalli, the European health commissioner, who made the promise. From the time he took over as commissioner at the start of 2010, Dalli had repeatedly made plain his distaste for the proposal he had inherited. He said it focused on the needs of industry rather than the needs of patients. He told the parliament during the final debate there, late last year, that he would come forward with a modified proposal reflecting his pro-patient view—a view that the parliament supported.  

But at press time, half a year on from Dalli's promise, the modified proposal is nowhere to be seen. And consequently, no one else can move either. 

As the Hungarian presidency pointed out recently, in a tone of disappointment, the dossier is stuck in the commission, not in council. "It is a top priority for the presidency, but the Commission still hasn't come back with its updated version," said a presidency spokesman. "The chair and everyone are keen to start working on it as soon as the Commission comes out with something," he added at the time.  

Already by that stage, the presidency's best hope had been reduced to preparing a general approach for the meeting of Council that will bring health ministers together in June. But even that scaled-down objective depended on the Commission producing its modified proposal by mid-May. Mid-May has come and gone, without any modified proposal being launched into the gap. The presidency "is bound to remain idle for want of a proposal to discuss, not for want of ambition," said the spokesman. Hungary is now certain to hand over the presidency to Poland at the end of June with this ambition unfulfilled. 

It isn't the only ambition that has gone unfulfilled in EU pharmaceutical policy over recent years. When the proposed update of the rules on information to patients emerged in late 2008, it formed part of what can best be described as a fanfare of good intentions and forward thinking—a three-ring circus of plans for the future. The Commission accompanied its legislative proposals with a strategy document boldly entitled "Safe, Innovative, and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector." 

Its scope was broad; two of the three legislative proposals it made at the time have fared better than the information-to-patients proposal, have since been adopted, and are set to come into full effect over the coming months and years: an update to the rules on pharmacovigilance and tighter controls to combat counterfeit medicines. 

But for all its expressions of anguish over "the complex landscape in the EU," the Commission's proposed actions have in most cases yet to see the light of day. It said it would improve the EU rules on pricing and reimbursement to promote "genuinely transparent and speedy" decisions—but no deadline was set for any of these moves, and all that has resulted so far is a public consultation launched in March on what might be changed in its pricing and reimbursement rules—accompanied by a disclaimer that member states in any case will remain, as they are now, free to do more or less what they want. Similarly brave words about introducing "more efficient market mechanisms" went, in the end, no further than urging price competition for non-reimbursed medicines—and that has still not happened across Europe.  

Another of the deficiencies that the 2008 strategy document noted was that European patients were not enjoying equal access to medicines, particularly in smaller markets, and again it promised a response. But although the commission set itself a 2010 deadline to develop "options to improve the availability of medicinal products for patients in need, with a particular focus on smaller markets," news of any action has yet to emerge.  

On some of its promises, the strategy document has, of course, made good—with the approval of new rules on cross-border healthcare, with greater international cooperation on use of foreign clinical trial data or the import of ingredients, with the ongoing review of the widely-criticized EU rules on clinical trials, with promotion of research into rare diseases, and with continued development of the public/private research partnership known as the Innovative Medicines Initiative. 

It should not be a surprise that some promises have been kept. That is, after all, in the nature of making promises. What is surprising is that so many have not been kept. The EU as a whole faces other challenges—the sovereign debt crisis of some member states, foreign policy dilemmas raised by the Arab spring, security of energy supply, or the fight against climate change. But that hardly justifies the Commission blithely ignoring commitments it has chosen to make in the area of pharmaceutical policy. 

The Commission's 2008 strategy document expressed no doubts about the value of the pharmaceutical sector: its role as a provider of innovative medicines and as an agent for economic growth, employment, and exports earned it the accolade of "a strategic sector for Europe." If it so strategic, why is it not receiving strategic attention? 

 anonymous columnist, a commentator so close to the action in Europe that his identity must remain secret

Why has the EU still not managed to update its rules on information about medicines?

A Lack of Information

"There are all sorts of studies that show how people are using information technology to enrich every aspect of their lives," says Kate Berry, CEO of the National eHealth Collaborative (NeHC), a private/public partnership aimed at encouraging widespread exchange of online health information. "Let's face it—no one has a travel agent any more. We do all of our travel planning online, all of our banking online, and all of our shopping online—we've hardly begun to take advantage of that information-sharing capability in healthcare." 

Thus the birth of the NeHC Consumer Consortium, a group that had its first meeting this past May, with the daunting goal of discovering ways to put health information technology in the hands of patients, to lead to more open communication between patients and physicians and better health and wellness (which translates to lower costs) for the public overall. 

For the purposes of the Consumer Consortium, "Health IT" and "eHealth" are defined broadly as any information that the general public can access regarding health, wellness, disease conditions, treatment options, etc., via websites, mobile applications, online databases and resources, and other tech tools. "It's any increased dialogue—informed by such tools or resources—between the patient and the provider or care team they might be seeing," explains Berry. 

The consortium brings together stakeholders across the industry, and is led by a "steering committee" of 13 members, including experts from the Office of the National Coordinator for Health IT (ONC), the Consumers Union, the National Patient Advocate Foundation, the American Association of People with Disabilities, and others.  

"NeHC is serving as a neutral convener of all the interested stakeholders on this topic, so we've got pretty much everyone at the table," says Berry. Attendees included patient advocacy organizations, pharmaceutical companies, and even individuals not associated with any particular organization, but who are passionate about the widespread use of health IT.  

The first goal is to pool resources and share expertise and best practices, says Berry. "Given that these many different identities may already be doing something around [health information] education and engagement ... we're hoping to serve as a forum for sharing ... to come up with a comprehensive inventory of what everyone is doing and identify where the gaps are." 

Secondly, the consortium offers a chance for all stakeholders to ask and answer questions: 

What are the most important messages patients need to know? Why should I care about health IT? What can this mean to me? 

The idea is to reach an agreement among stakeholders on what the key messages concerning health IT are, who the most trusted messengers are, and the best strategies for disseminating that information.  

At the first meeting, several smaller work groups were formed—each to be led by one of the 13 steering committee members—including teams tasked with inventorying current available resources, devising outreach strategies, and reducing disparities. "We're really trying to take advantage of the energy and momentum around this work and have some concrete deliverables," says Berry. "The ONC recently released a strategic plan for the coming five years, and consumer engagement is one of the top five strategic priorities in ONC's plan." 

However, as NeHC and the ONC work to improve public access to—and knowledge of—health IT, a word of caution is needed. Without some guidance, patients can often find misinformation online that could lead to misdiagnoses and/or self-medicating. Berry stresses that empowering patients with health IT is part of a bigger plan to enhance the relationship between patients and physicians—

 to substitute it. "It's about informing and encouraging a better dialogue," she says. "Patients have to respect the [physicians'] expertise and yet be empowered to gather as much information as they can." 

Berry expects the second meeting (next month) to serve as a reconvening of those smaller work groups to present one another and additional attendees with their recommendations for specific plans of action around these issues. In the meantime, she says, all workforces and steering committee members will be in close contact with one another. 

Looking even further into the future, Berry has several ideas of how health IT can educate and empower the public, and what that could eventually mean for the healthcare industry as a whole. She suggests resources that allow patients to make doctor appointments or order prescription refills from pharmacies online, databases that allow patients to keep track of their own health records, and apps that track blood sugar or other vital statistics in the same way a pedometer tracks your daily steps. "There are all sorts of ways that technology can be leveraged to help a patient better manage [their health] to avoid hospitalization or emergency visits," she says. "So we may spend a little bit more on medications but we'll spend a lot less on other downstream costs." 

"We know that given how fast health IT is being driven, both by the government and the private sector, it's time to make sure the consumer is actively engaged in that whole process," says Berry. "We've been sort of focusing on the providers and everyone else, but no one has really focused on consumer engagement yet. With the ONC strategic plan, new technology, and health reform, I think many people would say that individuals are a huge untapped resource in terms of engaging in their own health and leveraging health IT. All those factors are coming to bear and it seems that what NeHC is doing is timelier than ever because of all those things." 

Overall, Berry feels that the first meeting was a strong debut to what she says could become a multiyear project. "We had a number of participants who spoke with great passion from the perspective of patients, drawing on their own experiences of having been very ill and navigating that process," she says. "That voice was strongly present. We got the dialogue going. We had enthusiasm and excitement about the consortium across the board and a resounding 

—that these issues are important, that they are timely, and that this is a worthwhile endeavor." 

In addition to the new Consumer Consortium, the National eHealth Collaborative has also recently unveiled NeHC University, a revamping and substantial expansion of its Nationwide Health Information Network (NHIN) University program. NeHC University will allow stakeholders to explore the broader health IT landscape and gain a more comprehensive understanding of the impact of health IT. 

Classes at the new NeHC university will come in the form of webinars, some for free and others for a registration fee, that cover a wide range of health IT-related topics. For the Health IT Trends webinar, NeHC will be joined by health IT trends tracker Michael Lake to deliver a quarterly briefing on innovations, new developments, and trends in HIT, from discussions sof major business and policy developments to updates on health information exchanges and health IT initiatives and how they are transforming healthcare financing and delivery. 

NeHC's new Consumer Consortium is promoting a new stakeholder agenda to improve patient knowledge

Getting IT Together

Creating and managing expectations is the most basic rule of marketing. Brands that lose sight of that—even those brands with a truly unique or exciting feature—will often stumble at some point early in their life cycle and possibly even cause their own failure. Take nothing for granted, even when marketing something as compelling and media-alluring as a nicotine vaccine.

Conditioning a particular marketplace is key. In this case, the promise of the vaccine would appear to sell itself, but that would be an assumptive mistake. The medical community, as well as the consumer public, has a bit of an ongoing love/hate relationship with the tobacco-cessation category. Some valid therapies have been launched, but even more have fallen flat on their promise or done a poor job at their shot at that ever-elusive first impression. 

Martin Mannion SVP Branding Director | yBrand, division of Ignite Health 

What a mistake it would be to approach or treat the vaccine category the same way one would treat a traditional pharma brand or OTC product. 

with issues traditional pharma brands don't deal with much, if at all. For instance:  

It is a highly feature (vs. benefit)-driven category

Most vaccines, rightly or not, are almost automatically commoditized in the eyes of healthcare professionals

Choice between vaccines is primarily driven by price

Manufacturing dynamics are often very fragile, which can cause significant disruptions in distribution throughout a brand's lifecycle

Patients often view the need to vaccinate with apathy and a lack of urgency

Vaccines are about prevention (vs.cure), which means success is an absence of the proof needed to reinforce the patient's behavior and mindset toward the product

It would seem crucial for this brand to leverage interest among both healthcare professionals and consumers in its pre-launch phase, but with caveats:  

NicVAX pre-launch efforts will fail if the brand simply joins the fray of the "smoking-is-bad" message

Any generic or generalized message is likely to drive interest in many other programs or resources and make the launch of the product even more difficult

In a world of media and sensory overload, the ability to retain information found in journals, glanced over in magazine ads, or spotted on billboards and subway posters not only challenges the most retention-adept minds, but is also unnecessary when we are always one Google search away from an answer to a stimuli we were exposed to. In a world where data-driven algorithms can freely tap into cloud-hosted databases of infinite knowledge, generalized messages do nothing more than dampen like a Maine mist in May.

Even early on, the conversation must feel different and new. 

A brand like NicVAX has a unique opportunity to stand apart by carefully sculpting the conversation around the attributes that differentiate it from other solutions. This "shaping" and "defining" should start early—as early as the pre-launch phase, when the dialog is still in the "unbranded" stage. 

Creating and managing expectations is the most basic rule of marketing

Pharmaceutical Executive-06-01-2011

Pharmaceutical Executive Digital Edition - June 2011

Educating Physicians

To Genzyme, Quality Data Depends on Quality Governance

Be Courageous

2011 Dealmakers Outlook

Drugstore Vaccinations

Branding a Unique Story

A Lack of Information

Getting IT Together

The Futuristic Insight

Optimizing your Value with Payers

Managing Product Lifecycle

To Screen or Not to Screen?

Start Serious, Become Bolder

Safe and Effective, Really?

Reach A Diverse Audience

Learn From What Follows

How to Be More Truthful