Congress managed to approve the Food and Drug Administration Amendments Act (aka FD-triple-A) in time to reauthorize the Prescription Drug User Fee program (PDUFA IV) before that expired Sept. 30, 2007. But the last-minute rush forced the legislators to compromise on many specific issues that could have long-term ramifications for agency operations and company R&D decisions.  

Curbs on drug advertising, stiffer label warnings, limited distribution programs, and broad research disclosure may all combine to limit prescribing. This "makes marginal drugs even more risky" for industry R&D programs, observes attorney John Kamp. Safety or efficacy questions about a product in Phase II, he predicts, will make a company hesitant about going forward.  

Conversely, all the new regulatory tools now available to FDA could boost the agency's confidence about being able to tackle safety issues that crop up after a drug comes to market. Such enhanced authority could make the agency more willing to bring a drug to market and evaluate the need for added safeguards later.  

While it may take some time to assess the impact of this lengthy and complex legislation, FDAAA won't be the last word from Congress on protecting the public from dangerous medicines. The legislators are likely to seek a legal pathway for follow-on biologics next year, and that could provide a vehicle for imposing a full moratorium on DTC advertising or stiffer penalties for violating new requirements.  

Overall, manufacturers applauded the enactment of FDAAA. The bill retained incentives for industry to conduct additional pediatric studies, curbed the scope of new penalties for fraud and noncompliance, and kept the door open for DTC advertising of new drugs. At the same time, FDA gained more authority to control drug marketing and labeling, require postapproval studies, establish active surveillance systems, and make clinical trials more transparent.  

Implementation will be an arduous task. The legislation contains at least 200 specific provisions, noted FDA Commissioner Andrew von Eschenbach. The job of sorting through all the new requirements now falls to FDA Deputy Commissioner Janet Woodcock. She recently took over as acting director of the Center for Drug Evaluation and Research (CDER) following the departure of Steven Galson to be Department of Health and Human Services acting surgeon general. Woodcock implemented the user fee program as CDER director for 10 years and knows the ropes. But she may not get enough new resources to do the job smoothly—or to modernize drug development. The new Reagan-Udall Foundation established by FDAAA to support FDA's Critical Path Initiative is authorized to receive a maximum $1.3 million, and that funding has to come from FDA's own tight budget.  

Some last-minute changes also may create serious legal problems for pharma. The final bill contains very murky language on whether FDA regulations preempt state drug-labeling laws. This thorny issue has pitted federal regulators against states eager to establish more-stringent disclosure policies for medical products. The vagueness of the FDAAA provision is expected to lead to a major legal battle, which may very well end up before the Supreme Court.  

There was uncertainty over what requirements would fall under the new Risk Evaluation and Mitigation Strategy (REMS) program and what new mandates would apply more broadly. In the end, FDAAA authorizes FDA to impose labeling changes, additional postmarket studies, and advertising curbs on all drugs—not just for those products that warrant a REMS. Conversely, the legislation stops short of requiring a REMS for all new drugs, as originally proposed, and leaves it to FDA to decide whether a new product warrants added safeguards to minimize risks.  

FDAAA also expands current clinical trial registration requirements to cover all trials for drugs, biologics, and medical devices beyond Phase I intended to support market applications. This trial registration system will link to an extensive clinical trial results database that eventually will make available to the public information on the outcomes and safety issues generated by the studies. 

Similarly, the legislation authorizes FDA to require pharmaceutical companies to submit planned TV ads for agency pre-review. And all TV and radio commercials for drugs will have to include a "major statement" of the product's side effects and contraindications. This approach is more palatable for marketers than banning consumer advertising for the first year a drug is on the market. The Institute of Medicine (IOM) panel that examined FDA drug safety policies backed such a moratorium, as did many members of Congress. But the likelihood that even a one-year ad ban would violate First Amendment rights to free speech persuaded the lawmakers to adopt the pre-review option instead.  

Giving FDA authority to require all drugs to conduct postapproval studies, to control labeling changes, and to require risk disclosure in DTC advertising should reduce the need for broad use of REMS, says attorney Scott Lassman of WilmerHale. Moreover, manufacturers that fail to follow the new rules or that air false and misleading ads would be subject to civil monetary penalties, an added enforcement tool designed to boost public confidence in FDA's ability to control drug marketing and distribution practices.  

But some members of Congress believe that FDA has been slow to respond to emerging drug safety concerns because agency staffers responsible for postapproval safety evaluation have been ignored and marginalized by those offices responsible for evaluating and approving new drugs for market. Earlier this year, there was a push on Capitol Hill to establish a separate drug safety office at FDA to give postapproval risk-assessment activities more clout. But both industry and agency officials opposed the idea as likely to disrupt a balanced approach for weighing drug risks and benefits. 

Instead, the legislation states that important decisions related to drug safety, such as mandating postapproval studies or a REMS, should be evaluated by both the Office of New Drugs (OND) and postapproval safety experts in the Office of Surveillance and Epidemiology (OSE). FDAAA calls for FDA to enhance communication between pre- and postmarket review staff and to report to Congress in two years how well the agency is addressing safety issues identified by OSE. 

At the same time, FDA will expand OSE operations with the help of additional user-fee revenues earmarked for postmarket surveillance of any drug on the market—not just newly approved ones. OSE gains $30 million in fee revenues to contract with data banks and health plans for access to additional information on drug adverse events. The agency envisions a "transformation of the drug safety program" by tapping into population-based epidemiological and observational data to carry out targeted postmarketing surveillance, to look at class effects of drugs, and to better detect safety signals. The final bill also boosts user fees by an additional $225 million over five years, starting with $25 million more for fiscal year 2008, to support the extra work involved in designing and overseeing the REMS program, monitoring labeling changes, and establishing the enhanced clinical trials registry and results database. 

By providing more resources for postmarket oversight, FDAAA may help elevate OSE's status. But the still-wide gulf between the two operations was apparent at the joint meeting in July of FDA advisory committees for Endocrinologic & Metabolic Drugs and for Drug Safety & Risk Management. The purpose was to evaluate concerns about increased risk of heart attacks for patients taking GlaxoSmithKline's diabetes treatment Avandia (rosiglitazone) flagged by several postmarketing studies.  

At this high-visibility session, OND staffers disagreed with their counterparts from OSE about removing Avandia from the market. The safety experts said it would be better to pull a potentially safe drug from the market than to permit patient access to an unsafe one, especially if alternative treatments are available. The advisory panels agreed that Avandia has serious adverse-event problems, but, in the end, voted to keep the drug on the market with added safety warnings, as recommended by OND and Glaxo. However, the contradictory messages from these FDA experts added to the perception that the agency does not have a solid grasp on how to handle difficult drug safety decisions.  

Many pharma executives agree with Novartis CEO Dan Vasella that FDA has become overly cautious in assessing new medicines in the wake of all the highly publicized drug safety controversies. Vasella may be particularly upset that the European Medicines Agency recently approved Novartis' diabetes drug Galvus (vildagliptin), while FDA has requested additional clinical trials that will take several years to complete. FDA has put many drug applications on hold while it weighs the import of risk signals, but some of those test products may never reach patients as a result. 

's Washington correspondent. She can be reached at 

Articles

Washington Report

FDAAA aims to restore public trust in drug safety regulation but may curb investment in R&D

More Confidence—or Slower Development?

They scuttle product launches and send company stocks through the floor. They steal precious years from patents and require pricey new trials. They have the entire drug industry on edge, from struggling one-hit biotechs to struggling large-cap pharmas. They're FDA approvable letters—that odd regulatory response that isn't quite an approval and isn't quite a rejection—and in the past three or four years, they've become a major part of the FDA's arsenal for dealing with (or, as many say, not dealing with) new drug applications (NDAs).  

As of October 1, the agency had already issued 23 approvable letters this year, including second letters for four drugs and a third for one. After hearing industry insiders grumble that a scared-safe FDA was upping the letter's use, Chris Milne of the Tufts Center for Drug Development looked into the issue in 2005 and counted 35 approvable letters for NDAs between 2001 and 2004, causing an average delay until approval of 20 months. FDA has issued 36 such letters since January 2006 alone. 

So Approvability Gulch is a real place. The question is, what does the trend mean? Has FDA quietly raised its safety standards, as many people argue? Or is it using the letters to simply avoid approving drugs—waiting for the current political storms to settle? And if there is a new safety order, what are the potential risks for both the industry and the agency? 

The Regulatory Creep of 'Basically Approvable'

Here's how the Code of Federal Regulations defines approvable letters: "In selected circumstances, it is useful at the end of the review period for the Food and Drug Administration to indicate to the applicant that the application or abbreviated application is basically approvable, providing certain issues are resolved. An approvable letter may be issued in such circumstances.... As a practical matter, the approvable letter will serve in most instances as a mechanism for resolving outstanding issues on drugs that are about to be approved and marketed." 

That may sound benign, but in the post-Vioxx real world, "resolving" an "issue" can lead a drugmaker off a cliff. Some "approvable" drugs are hardly on the verge of approval:  

In 2005, Bristol-Myers Squibb killed its diabetes drug, Pargluva (muraglitazar), saying that it would take five years to gather data about cardio risks flagged by FDA. (The company may also have believed that additional data would sink Pargluva, a PPAR-antagonist like GlaxoSmithKline's Avandia, which was almost withdrawn this year because of its heart-attack risk.)  

Sanofi-Aventis' novel obesity treatment, Acomplia (rimonabant), marketed in Europe, received an approvable letter from FDA in 2006. After submitting the FDA-requested data, the French firm got an unfavorable review from an FDA advisory committee in June and withdrew its NDA. Unlike BMS, Sanofi is standing by its much-vaunted drug and plans to submit a new NDA for diabetes. But the ETA is 2010, at best. 

Novartis' Galvus (vildagliptin), its diabetes blockbuster-to-be, which was already on the market in Europe, received an approvable letter in February. The additional clinical trials are expected to postpone Galvus' launch until 2009, putting the DPP4-inhibitor hopelessly behind Merck's first-in-class Januvia, which started the race with a mere three months' advantage. This has cost Novartis at least $500 million in unmet projections and left its new U.S. rep army with little to sell. 

Novartis CEO Dan Vasella, virtually the only pharma CEO willing to speak openly on the subject, has his take on the trend. "The FDA has become subject to politics," he told the 

Analyst Steve Brozak, president of WBB Securities, agrees. "It's to the point where it's by exception—not the rule—that drugs are approved," he said, and then raised another red flag: "Innovation and safety are contraindicated. Pharma can't have blockbusters in very large populations at the same time FDA has no safety signals." 

In a study released in August, James Kumpel, an analyst at Friedman, Billings, Ramsey, reported that FDA OK'd 38 new drugs between January and July, down 31 percent from 55 approvals for the same period in 2006. Meantime, the number of new molecular entities (NMEs) is at a 10-year low, seven through July, compared with an average of 12 over the same period every year since 1998. "They've raised the bar," said Kumpel, whose study helped spark a recent media flap about the drug-approval slowdown. "They've made it more difficult for drugs to get through the system." 

It doesn't take a scientist or analyst, however, to detect that different drugs are being treated differently in FDA's decisions:  

 Innovative drugs for common chronic conditions that will be used by millions of people are getting scrupulous scrutiny—particularly for heart and liver toxicity—and are routinely found wanting. The message seems clear: No more Vioxxs! As a result, pharma has had to sit on its hands as one after another potential top-seller gets jettisoned. 

 These seem to be hit hardest of all. In 2005, only one of 14 me-too drugs won approval on the first try—another 10-year low. The poster child for these drugs is Merck's Vioxx spinoff, Arcoxia (etoricoxib), which didn't even earn an approvable letter. To many observers, FDA's new unofficial policy seems to be that me-too drugs don't just have to prove safety and efficacy—they have to prove superiority to existing drugs. "The discussion on what this [drug] brings over and above what's on the market is a question that's being asked," Vasella told the 

 "FDA doesn't seem to trust the physicians any more." 

 Given that these drugs are already in wide use, their safety profile should present fewer uncertainties. But the agency asked to see more data for Wyeth's Pristiq (desvenlafaxine) and Endo's Frova (frovatriptan succinate), both for menopause; Encysive's Thelin (sitaxsentan), for hypertension; and Trexima (naproxen and sumatriptan), a new combination being codeveloped for migraine by Glaxo and little biotech Pozen, whose stock value dove by half at the news. The NASDAQ Biotechnology Index is down about 14 percent since last winter, a drop some analysts attribute to investor skittishness about the FDA's abundance of caution.  

 FDA has seemed careful not to put the brakes on approvals for important drugs for life-threatening diseases; each gets not only a speedy six-month review but its own risk/benefit ratio. In oncology, for example, Pfizer's TKE inhibitor, Sutent, became the first drug ever approved for two indications at its first time at bat. First-in-class cancer drugs that sailed through include Wyeth's mTOR (mammalian target of rapamycin) inhibitor, Torisel, and Glaxo's first small-molecule ERB1/2 inhibitor, Tykerb. Yet with oncology pipelines exploding, the gate may be closing. According to Tuft's Chris Milne, the agency has delayed (or rejected) five promising cancer therapies since January, including Genetech's Avastin (bevacizumab) for its third indication, breast cancer. Another NDA was blocked on dubious grounds, Milne says: "FDA told the company it doubted the postmarketing studies were going to be done on time and demanded the firm do them before approval. But, in fact, 89 percent of postmarketing studies in oncology meet their deadlines." And since such studies can take five to 10 years, the drug was DOA. 

Still, not everyone inside pharma sees a conspiracy, or even a controversy, in the new wave of approvable letters. Gretchen Dieck, vice president of safety and risk management at Pfizer, said that to make a fair assessment, you'd have to examine each NDA on its own terms. "The drug development process is long—and not a straight line," Dieck said. "Something can come up, such as new side effects with a class of drugs or new surrogate markers, and the agency will say, 'You need to address this in your clinical trial.' It's not necessarily a matter of negligence on the part of the drugmaker." 

The explanation most often heard for the spike in approvable letters is the obvious one: that FDA has raised the bar for drug safety. This takes account of both the scientific and the political aspects of the issue. Most letters ask for additional data either about a specific "safety signal" or about more general heart and liver toxicity. At the same time, the agency is seen as desperate to rehabilitate its image as a guardian of public health—and, ironically, "above" politics. 

"Vioxx and other episodes shook confidence in the agency, and took it from being a gold standard to having a very tarnished image," said Mark Senak, senior vice president at Fleishman-Hillard and EyeonFDA.com blogger. But Senak also points to other factors that likely play a role. "Coinciding with that was the fact that for the past six years, FDA has been rudderless at the top," with a series of short-lived or interim heads until Andrew von Eschenbach's confirmation last spring.  

Nor has drug-safety been the only area in which politics has appeared to intervene, Senak point out. The typically hush-hush process of drug approval burst wide open in 2004 during the machinations around the review of Plan B as an over-the-counter "morning after" pill. The acting director of the Center for Drug Evaluation and Review (CDER) sent it back, asking for more safety data related to its use by teenage girls—a decision widely viewed as a sop to President Bush's abstinence-only fundamentalist base. The ensuing protests from scientists both inside and outside FDA raised still-unanswered questions about the degree to which the agency is influenced by the administration's own political agenda.  

"Congress began scrutinizing the internal process at FDA," said Senak, "and it saw a lot of things it did not like. Enforcement of regulations was down. People who were not experts but political appointees were inserted into advisory committees. There was a wave of whistle-blowers and a general degradation of morale."  

There has been a prolonged and unprecedented public airing of internal disagreements about drug approval, with the drug-safety camp in open strife with the drug-review camp. "The agency has been called out on this by Congress. There have been specific charges that it suppresses safety information, or at least dissent," said attorney Daniel Kracov, head of Arnold & Porter's pharmaceutical practice. "It is a very difficult atmosphere to make tough decisions about drug safety, and this may induce too much caution on FDA's part." 

Still, neither Senak nor Kracov believes that there has been a single order from on high to turn the ship around on safety. Speaking for FDA, Dr. John Jenkins, who has headed the Office of New Drugs at CDER since 2002, says there has not been. He emphasizes that each NDA is evaluated individually, and the agency doesn't set a target for how many drugs will be approved each year. Yet he acknowledged that public concerns over drug safety have had an effect. "The calls for having more certainty about safety than may have been required in the past are in the minds of decision makers when reviewing drugs," he said. 

To Jenkins, the conventional wisdom on approvable letters gets the story backward. "It's probably true that we have been issuing more approvable letters recently, but in most cases that is a shift from what would have gotten a nonapprovable letter before," he said. If anything, "approvable" status means the drugmaker doesn't have to submit a whole new application, a bonus for pharma.  

"In some cases, companies are looking for convenient explanations for not getting their applications approved," Jenkins added. 

Jenkins can be forgiven for sounding a little gruff. The controversy over approvable letters 

 emerged on the heels of months of public excoriation of FDA's safety-monitoring failures and debate on how to "reform" the agency. Suddenly the media were painting FDA as an agency too browbeaten to approve drugs. Needless to say, these articles didn't carry headlines like "Newly Safety-Conscious FDA Stands Up to Industry Ire." Interestingly, of the 12 or so NDAs approved since late August, as the "slowdown" controversy gain traction, only one got an approvable letter. 

But what about the accusation that FDA is basing decisions on politics not science? Jenkins framed his answer carefully. "We at FDA reflect the approval standards that we hear from Congress and the public. We can set the bar wherever they tell us to, though the pros and cons of any change must be carefully weighed," he said. "And some people would say that to do otherwise would be irresponsible of us." 

In other words, it's true—a new, more cautious mind-set has taken hold at FDA, and given the chances of a Democratic presidential victory in '08, it's no temporary trend. "I would not be surprised if the decisions we make now are different from decisions we would make in the past when looking at the same set of data," Jenkins said. 

Jenkins may not be surprised, but drugmakers are—or claim to be. A recent First Albany Capital report notes that "the FDA's tolerance of [safety signals] appears to have declined," resulting in "unsettling surprises."  

"I can't believe they weren't anticipating that things were going to get tougher," said Chris Milne. "But knowing things were going to get tougher and dealing with it are two different things."  

In the first place, it's common knowledge that the speed with which FDA approves drugs goes in cycles. The regulatory barriers to approval move like a pendulum, rising and falling based on pressure from Congress, advocates, and, yes, even industry. "There is no constant, quantifiable bar for either safety or efficacy," said Ken Kaitlin, who heads the Tufts Center for the Study of Drug Development. "Where FDA puts the balance between the two is really a public decision." 

That's why Kaitlin believes that this is a "he said, she said" in which both pharma and FDA are right. "FDA's standpoint is that it's doing the same thing it has always done—but just using a new fulcrum for the seesaw," said Kaitlin. "But from pharma's side, FDA has indeed raised the bar because now a drug needs to show a lot more weight in efficacy to offset the risks." 

Chris Milne dates the swing toward safety to the agency's recall of Warner-Lambert diabetes drug Rezulin in 2000 due to liver fatalities—a debacle that featured both incompetence (three label changes) and intrigue (studies that the safety office kept secret from the rest of the agency). "After that, FDA did a self-analysis and instituted some changes to the way they review submission packages," said Milne. "So drugmakers may have been able to predict that this was all going to happen." 

And far from being caught unawares, said Russ Somma, president of SommaTech, some companies may even be angling for an approvable letter—rather than withdrawing what they know is a flawed NDA. "It certainly looks better to stockholders," he said. And at certain large-cap pharmas, he explained, there's an unwritten policy not to yield to any FDA demand, turning the approval process into a game of Uncle. 

Let's not overlook the possibility that FDA is using approvable letters to push pharma to get with the program. Although Jenkins did not mention it, FDA officials have complained that the quality of recent NDAs has fallen off. "There's probably some truth to that," said APCO Worldwide's Wayne Pines. "Drugmakers feel enormous pressure to get applications to FDA as fast as possible. Some are submitting packages that don't have sufficient pivotal data, even at the risk of having FDA reject it and ask for more." 

There are plentiful signs that the frustration pharma feels about FDA is returned by the agency. According to Somma, it's less the NDAs than the high number of postapproval filings that are clogging the system and causing the approvable letters. "Companies are not always being up front about their business plan for a new drug," he said. "They come in a month after approval with a shopping list of changes they want to make rather than building this into the NDA. And FDA has to manage all of this, too, so the approvable letters are a way to deal with this increasing workload." In fact, the agency's chronically understaffed, overcommitted condition is a cause for considerable alarm inside FDA and pharma alike. 

The agency may be drawing a line in the sand about the quality not only of safety and other data but of its relationship with pharma. "FDA has been sending a few important messages," said Somma. "It wants industry to sign onto its Quality by Design and 21st-Century initiatives. But it also wants transparency and honesty. More and more, FDA looks at NDAs and says, 'Is that all there is? You guys have spent 12 years and a billion dollars to make this drug and this is all the data you have?'" 

The heart of the drug-review process is, after all, a power struggle over access to information. "Legally, FDA can demand to look at every single piece of data," said Somma. "If they trust a company, they won't do that, but if you try to pull the wool over their eyes with the magic of your technology, say, or simply by hiding data, they're going to give you a hard time"—in the form of an unapprovable letter. 

Ultimately, the message FDA is sending to industry is "work with us, not against us." An agency-funded study in 2005 by Booz Allen found that the more meetings a firm has with FDA about an NDA, the better its chances of getting its application approved. And Chris Milne points out that not a single fast-track or orphan drug, which are developed with maximum pharma–FDA teaming up, has ever been withdrawn from market. Yet for pharma, such close collaboration too often adds time and cost to the process without increasing the quality of the data. Certain safety signals will materialize only when a drug is on the market and in wide use—no matter how many Phase III trials are run.  

In addition to costs of one kind of another, it may also come down to a question of trust, or the lack thereof. Both Big Pharma and FDA have, fairly or not, suffered a serious loss in public trust in recent years, and both remain under enormous stress. Given the current political climate, it's not clear what option FDA has other than to push back against pharma on issues like safety and transparency. It will be up to each drugmaker to decide how to respond. Yet the fact remains that the fortunes of Big Pharma and FDA are tied to each other, and rise and fall together.  

Fortunately, there's cause for optimism. "FDA is reaching out to pharma on a regular basis, asking for more open interactions," Russ Somma said. "And a number of companies have gotten together to work with the agency on different issues," such as the consortia for biomarker R&D in cancer, cardiovascular disease. 

Features

Approvable letters delay NDAs, cost pharma plenty, and are at an all-time high. Industry says FDA is gun-shy; the agency says it's business as usual. Who's right?

FDA's Approvable Problem

You can't blame brand teams for their existential dilemma. After all, the very purpose of a brand is to build customer loyalty and charge a premium for it. (Right?) But all the money, time, and effort spent building blockbuster brands made little difference last year, when $23 billion worth of patented drugs lost exclusivity—and the bulk of their value. Despite the branding, these drugs literally went from boom to bust. 

FROM TOP TO BOTTOM: Michael Guarini, Ogilvy Healthword; Wes Wilkes, Interbrand Wood Healthcare; Angela Moskow, Sanofi-Aventis; Mike Boken, Shire Pharmaceuticals 

Does it have to be this way? To find out, Pharm Exec gathered the industry's brightest stars for an Executive Roundtable. These execs debated and discussed a new vision for brand leadership—one in which brands work not only harder, but also smarter. An edited version of the discussion follows. 

): The pipeline is full of specialty drugs that have, for the most part, quite complex science. How does this translate to the branding model?

JEFF CONKLIN (VP, marketing practices and innovation, Wyeth):

 Your question is backwards. The model of branding is going to be driven by the complexity of consumers rather than the complexity of brands. If you're not putting customers first in driving that model, the complexity of the brand makes no difference.  

ANGELA MOSKOW (vice president, diabetes marketing, Sanofi Aventis):

 You're right. We need to take a page out of the consumer-package industry. Because brands are there to establish the connection with the patient. 

CAROLE HUNTSMAN (VP, marketing, neurology, EMD Serono):

 As therapies become more targeted, it really is going to be about personalizing the patient experience and providing exactly what that patient needs to get the best experience of the product overall.  

BOB MASON (SVP, director of brand strategy, Palio):

 Think of the overall branding model like the mass customization of drugs.  

MIKE BOKEN (senior director of marketing, ADHD, Shire):

 We will increasingly see the industry moving more toward the specialty model. With a $300 to $500 million product, you can't afford to have reminder calls four times a week. The specialty model is about understanding how to take micro products and apply the branding model to a micro space with smaller sales forces, less reliance on broad DTC, more one-on-one communication with consumers, and more focus on finding the right patients and keeping them over the long-term.  

MAUREEN REGAN (managing partner, McCann Erickson Healthcare Worldwide):

 The model of branding remains the same even in niche markets. Specialty marketing is more about the strategic delivery of the medium or the tactical mix, which shifts from more broad-based to more online activity—things like social networking hold a tremendous amount of potential.  

): Where can we see this model of branding at work today?

 A recent example is the cervical cancer vaccine, Gardasil, from Merck. There was a lot of controversy around the vaccine—in particular, social and religious issues about vaccinating girls before they come of age sexually.  

Pharma companies usually are built to launch product brands, but Merck actually budgeted and planned for talking about the condition itself. It did an excellent job in driving the vocabulary and ideas about vaccinating for cervical cancer with the "Tell Someone" campaign. As a nonbranded campaign, it sort of got taken up by society and became more of a grassroots entity.  

 Lunesta has taken a consumer-like approach and has done a beautiful job. In particular, they have created surround sound in terms of making sure that there are synergies between the professional and consumer markets. Although consumers have a tendency to call it a butterfly when it is actually a lunar moth, it is one of the most recognized symbols in medical advertising. 

 The whole way that a pharmaceutical company is structured is to sell, whereas branding is about helping people buy. And what are they buying when they buy this drug? A brand has to create an experience, a situation where people see a reflection of themselves and their values. So the whole act of putting a nurse educator into a physician's office is imparting a value to that brand. The brand becomes helpful, nurturing.  

Probably the main brand experience for doctors is still the sales forces. Yet there is no training whatsoever on how sales reps should represent the brand they sell. They are not representing a nurturing, helpful, caring brand if they are coming into the office and saying, "Doc, I need your next 10 patients." 

BREITSTEIN: The issue of drug safety has taken over headlines for the industry. How are companies responding to this issue in terms of branding?

 Safety has always been part of the pharmaceutical brand. But now you see companies putting more insurance policies in their trials. They are beginning to address some of the public's demand for greater accountability, like conducting longer trials with broader patient populations. 

Safety for mass-marketed drugs for chronic conditions, often asymptomatic, is going to be a big concern. For other drugs, there are black box warnings. But a lot of people are on Remicade, which has a black box. It just celebrated its millionth patient. Biogen Idec gives warning after warning about Tysabri, and people respond by saying, "Hey, you're holding me back."  

MICHAEL GUARINI (regional president, North America, Ogilvy Healthworld):

 There is an element of risk acceptance. We even saw that right after the withdrawal of Vioxx—people were somewhat resilient about it.  

 Patients are always going to believe that they are not that one in a million. Right now, there is a lot of pharmacovigilance, but we don't yet have the pharmacogenomics that will give us the direction as to who is going to experience the problem. So risk-management plans will be very important for the drugs that are coming.  

What's interesting, though, is that companies are putting the liability for the risk-management program on physicians completely. This is a new dynamic where basically doctors are signing away their lives if they want to treat certain patients. Maybe they just don't want to go there.  

CLINTON: With the new focus on pharmacovigilance and the availability of huge databases of insured patients, how can marketers create a strong brand as safety signals continually emerge?

 Safety is not a bad thing to talk about. We want to make sure that our patients are having a good experience. We're in a better place if they know what to expect and, even better, how to avoid it. It is important for the physician to think about patient selection, about who is the right patient and who is not the right patient.  

MARK NOLAN (senior VP, group creative director, Digitas Health):

 One of the first things patients will look at on a Web site is the side effects page. So we advise our clients to consider a more radical level of transparency. Don't underestimate the power of patient, caregiver, and physician bloggers. The second a safety concern arises, your brand's Web site is going to be knocked down on search engines by them, or by lawyers looking to sue.  

BREITSTEIN: Pharma has long been talking about the missed opportunities of compliance. Are there any new efforts in the space that are truly promising?

 You really create that brand equity if you can get into the hard work of figuring out what to say to the patients and delivering the right information about adverse events in their language. 

There are significant adverse events that come with taking any ADHD drug. It used to be, "Don't tell parents about it, because the kids are going to go off treatment." But the bottom line was, we were having this huge drop-off, because parents were seeing the adverse event and no one was talking them through it. We made the change to holding their hands, where we send them a mailing every week once they initiate treatment, and then after two or three months on treatment, they get a reminder.  

As a result, our product is the leader in compliance in the category. That's a sign that we're doing something right.  

 What's new is that we're going to see more research conducted on the underlying mechanisms of noncompliance. We'll find out that there is no such thing as the typical noncompliant patient. There are many different motivations that lead to noncompliance, and, hopefully, we will be able to model different communications based on these triggers and identify which patients would benefit from more tailored communications. The financial services industry does a particularly good job of this in terms of tailoring the messages to small niches. There is potential to do that in our business, but it is in its infancy.  

FROM TOP TO BOTTOM: Mark Nolan, Digitas Health; Maureen Regan, Regan Campbell Ward; Bob Mason, Palio Communications; Vince Parry, Y Brand 

 When you talk about patient compliance, you're really talking about segment compliance, because you're going to have those proactive patients that are going to be compliant even without a program. But we see using the Internet as a way to supplement what the physician tells the patient as a key driver. More and more, patients can go online and choose a mentor they can identify with—someone with the same experience, who has been there, done that, and can connect with them. Those things work.  

As we become more commoditized, every market becomes more crowded. You'll to need more depth to differentiate yourself—and that is content, whether it be clinical or service content. It should be immediate and personally relevant. That may mean mobile media reaching out to patients at mealtime and saying, for example, "Crestor is reminding you to take your medication," and then recommending a heart-healthy diner nearby.  

 With some biotech products, the value of each patient is substantial. Out of necessity, we really had to be ahead of Big Pharma in terms of tactics to create the patient experience.  

Our product is an injectable, and patients can be needle-phobic, or they can get needle fatigue. So it really does take a hands-on approach. In our case, by employing nurse educators, we saw a 40 percent improvement in adherence. We also have a new needleless device that is in development that will actually record the adherence and compliance and provide feedback to the physician.  

CLINTON: What is the most pressing challenge for brands today?

 The brand has to work harder to bridge that gap between when the patient leaves the physician's office with the scrip and then needs to know exactly what to do with that.  

Education is a big part of it. How do you get that into patients' hands? Especially with HIPPA regulations. But they need more information than they are getting in the average five-minute call.  

 Let's face it, physicians are physicians and, not only do they not have a lot of time, but they are often not the best in communicating with patients about the disease or the product.  

WES WILKES (managing director, Interbrand Wood Healthcare):

 Chantix is putting more resources into the cessation programs than into straight product advertising. It's doing an amazing job, and the company will start to see that it's going to have a relationship with these folks like no other by shifting the model away from the traditional product branding.  

 We need to put more time into understanding how drugs fit into patients' lives in terms of maintenance. Our industry puts a lot of emphasis on getting patients started on medicine, but we also need to help patients continue their treatment. Many illnesses are chronic, yet patients stop taking their medicines when they shouldn't. When you see compliance issues in rheumatoid arthritis, hemophilia, and even transplantation, you know there's more we need to undestand about our patients and more we need to do.  

Top pharma brand experts discuss today's issues: safety, compliance, corporate branding, combatting generics, and more.

Step It Up: Branding Roundtable

Twenty-one years in, the Rx Club Awards have become the de facto gauge by which pharmaceutical advertising creative is rated. The focus of the awards is on innovation and imagination—not return on investment.

Many of this year's winners can take pride in the fact that their work not only caught the judges' attention, but also helped further healthcare awareness. They created campaigns that build knowledge of a disease state and to drive patients to get the help they need. This direct-to-patient marketing tactic (and sometimes direct to patient via the physician) further blurs the line between physician and consumer advertising.  

"I think there are plenty of multifaceted, integrated campaigns, but there is also a lot of patient education that goes on day in and day out," explains Patrick McIvor, president of healthcare communication firm Simms & McIvor. The company won a gold award for its work on a Bayer campaign that was used as an educational tool at a camp for children with diabetes. The unique twist was the use of thumb balls—small, soccer ball–shaped balls with letters and words on each side—which kids could use to converse about diabetes and other subjects. Each thumb ball was branded with Bayer's logo.  

"The best communication and the best advertising come from understanding the beliefs that are driving behaviors out in the marketplace," says David Sonderman, group creative director, senior VP at ad agency GSW. "When you can understand what the drivers are, you can find better creative solutions to get at them."  

GSW won silver for Itchcraft, a four-page sales aid that describes the extraordinary lengths to which eczema sufferers will go to deal with their itchy symptoms. Some stories are charming, but others are disturbing.  

"We found a basic human truth in the stories, and that is translating into some of today's advertising," Sonderman says.  

Altum's silver-award-winning ad features an illustration of a hip over a background of bone marrow teeming with leukemic cells. The pamphlet was used by reps to educate oncologists and hematologists of the value of clearing the bone marrow entirely of leukemic cells. The biggest challenge was trying to change doctors' mind-set in terms of how to treat this particular form of leukemia.  

"Most people know someone who has had cancer, so there is that emotional barrier that you have to overcome," says Diane Iler-Smith, executive vice president, chief creative officer at Altum, a branch of CommonHealth. "You are talking about survival gains of only two or three months—it's just such an emotionally sensitive area. I think once you overcome that, there is so much more stimuli to be creative."  

Other agencies decided to tackle sensitivity head on. For its silver-winning campaign for Cephalon's Vivatrol, Gobel & Associates relied on guerrilla marketing, with targeted billboards and radio spots. The company ran commercials on Howard Stern's show, but it also created a public spectacle: It placed a custom-made bottle in a crowed location and had a person stand inside the bottle with a sign displaying the campaigns' Web site. 

"It's not about thinking different for the sake of thinking different. It's about what is going to make the maximum impact," says Dave Raube, creative director, Goble & Associates. "The audience is so overwhelmed with messages, our challenge is to break out and do something different—but at the same time, do something with a memorable impact." 

To drive awareness to renal toxicity issues that exist with HIV drugs, Palio Communications created an unbranded print campaign for GSK of a woman sitting on a bench featuring a picture of two kidneys where her own organs would be and a headline that reads: "She knows she has HIV. She doesn't know her HIV puts her at risk for kidney disease."  

The grassroots campaign struck a nerve with patients and the judges who gave the campaign a silver award. Part of the campaign's effectiveness is its avoidance of flashy new media.  

"As technology leaps forward, there is a rush to technology when it's not the best solution," says Guy Mastrion, chief global creative officer for Palio. "The best solution is to have a really strong, simple idea. The bells and whistles shouldn't get in the way of the idea." 

But technology isn't all bad. GH Group won a silver award for a simple, fun game created to motivate and inspire Daiichi Sankyo's sales reps.  

"I see more content being developed on devices," says Steve Miceli, creative director, interactive at GH Group. "The ultimate advertising vehicles—TV and radio—are now being used to drive people to the Web, and rich media solutions are growing as the number of people with high-speed Internet has expanded."  	

"The Internet is another channel through which we can communicate, and Web-based programs need to be thought of as part of the mix—not the answer," GSW's Sonderman says. "A Web site is a place where you can engage people at a deeper level; however, you can't just put a Web site up and expect people to come visit it." 

With ads on topics ranging from addiction to disease states, this year's Rx Club Award winners connect creativity with emotion

Rx Club Awards: Human Interest

In today's pharmaceutical marketplace, there's no room for error; companies need to make all the right moves. Yet the industry's investment in intelligence—the wisdom that guides the brawn of Big Pharma—has been inconsistent, at best. A recent survey found that half of pharma companies' intelligence programs are less than one year old.  

It's not that the concept of competitive intelligence (CI) is new—the field has existed within pharma for nearly 20 years. Rather, many companies suffer from "intelligence amnesia"—when companies build up intelligence programs only to drop them later. When new management enters the picture with an interest in CI, they have no knowledge of prior programs and must start the process from scratch. While not all companies contract complete amnesia, many lose their ability to assess their competitive surroundings. They may forget how to watch.   

Wyeth was an example of the latter; it needed to regain its competitive capability. It was 2002, and the company was fighting several highly public battles: litigation on its diet drug Fen-Phen, a report citing problems with its hormone replacement therapy, and a series of related layoffs. These layoffs, recalls Craig McHenry, head of Wyeth's CI group, wiped out much of his staff. But McHenry soon viewed the layoffs as a sort of shock therapy.  

Competitive intelligence had to prove itself again. So Wyeth began to change the way it scoured the market for new opportunities. "The biggest lesson for us, coming out of 2002, is that it's very difficult for a CI group to have a culture and a process that is drastically out of line with the rest of the organization's," says McHenry.   

In large part, McHenry's wake-up call forced him to look at the past decade and see how the market had changed. Piece by piece, McHenry's CI organization began to help the company interpret the competitive signals faster and better than it did before.  

Most likely, your company needs to do the same if it is to succeed in today's competitive marketplace. Yet, many firms have failed to monitor the true markers of change. I've compiled notes from my CI files of nearly three decades to help companies get back in the game and to bring executives up to speed on best-in-class ways to recognize these markers—markers laden with threats...and opportunities.  

You hear a lot of talk about the drivers of today's business. But the driver that comes across most clearly is the need to curb healthcare costs—the proverbial elephant-in-the-room marker. The rise of healthcare costs at twice the rate of inflation is just not sustainable, whether employers foot the bill or whether we move to a national single-payer system. It's easy to focus on pricing alone. But look underneath the surface and you'll find an even more significant issue brewing—the forced transformation toward transparency.  

Transparency comes in many different packages. It's more than just access to data on the Internet. It is about a confluence of forces that have peeled away industry secrecy, especially in the United States, over the last 10 to 15 years.  

Last year, Harris Interactive's reputation poll of 21 industries placed pharmaceuticals among the most unpopular—again. Certainly, pharma's bad rep is nothing new, but things have gone from bad to worse. This crisis of reputation has forced pharmaceutical firms to report their trials, inform the public about changes in strategy, and disclose pricing of drugs. 

 "We are close to the bottom of the barrel," commented Wayne Rosenkrans, a strategist for AstraZeneca. "We are just a notch above the tobacco industry. We went from just being greedy to being evil about a year ago."  

How Vasella Interprets Data-and the Future 

It's not surprising then that, since 2000, pharmas worldwide have paid nearly $4 billion in settlements and fines. 

It used to be that companies gained intelligence on how their drugs were faring in the marketplace through periodically updated reports from IMS Health. But new modes of delivery for medical data are creating a quiet revolution. Companies now gain this insight instantaneously by connecting with doctors at the point of prescribing and speeding intelligence directly to decision makers. To do this, the industry relies upon vendors that collect information from doctors with handheld devices, or from contract market researchers who survey physicians.  

"Many biotech products are carried and distributed by specialty pharmacies...[and] may require special handling," says Allen Kamer, director of business development for Leerink Swann & Company, a healthcare-focused investment bank. "In order to stay current with...demand, companies require real-time data and information about their products."  

Over the past decade, the US government has forced open the doors to what used to be considered insider information. One of the best examples came in 1997 when FDA began requiring companies to register clinical trials and then posted the list on 

The transparency juggernaut driven by government is gaining speed. Even now, the US government has begun to move aggressively into the field of outcomes research, also known as health economics (which leads us to the next marker.) 

Marker #4: Health economics and stealth agencies 

It used to be that slightly differentiating a drug was enough to get it on the formulary. Now, robust outcomes analyses that demonstrate significant advantages are needed if a drug's potential market success is to be realized. 

The Agency for Healthcare Research and Quality, part of the Department of Health and Human Services, is at the forefront of applying health economics to the healthcare system. Its agenda may determine profit margins for the industry for years to come. Yet, AHRQ is virtually unknown by industry analysts.  

"AHRQ is going to have a great impact on our industry," says Rosenkrans. "What it is doing is centered on comparative effectiveness, which has input into formulary decisions in ways that people don't really appreciate. I can't tell you how many times when I speak in front of audiences and ask them what AHRQ is that not a single hand goes up!" 

 Thinning pipelines have placed a spotlight on Big Pharma's early pipeline. Before the mid-90s, companies never talked about early-stage programs. But the rise of the biotech industry and the increased focus on deal making have broadened the interest. 

"Biotechs are very transparent in their early-stage programs, because that is their currency in financial markets," states Robert Gottlieb, a consultant and former editor of 

. "It also allows them to showcase their science." 

However, early-stage R&D programs hold the most risk, and the disclosure of these compounds' failure can lead to price swings and major market headaches. Bristol-Myers Squibb, for example, experienced this when, in 2000, it announced the negative side effects of Vanlev, an antihypertensive being touted as the company's next blockbuster. After more than 200 security fraud claims poured in, BMS withdrew the new drug application. Its stock quickly fell nearly 40 percent. The real and potent threats of such "ticking time bomb" lawsuits have spurred pharma firms to disclose more about their early-stage work—before the product's flaws are exposed late in the game and the market attacks.  

Marker #6: The Internet and the rise of patient advocacy 

 Patients have found their voice, and a Speaker's Corner on the Net where they can follow and influence trials. Case in point: Novartis had discovered Gleevec for chronic myeloid leukemia (CML). As the trials began their usual slow progression, Daniel Vasella, Novartis CEO, noticed something. 

"Today's patients are a demanding lot," he wrote in the 

. "They assert a right to decide and a right to the best treatment.... They are smarter than ever, discovering drugs at a very early stage of development, alerting their physicians to new drugs and therapies."  

At one point, 42,000 messages appeared on a CML Listserv. Vasella acknowledges that patient activists used the Net to alter Gleevec's path, ultimately making it available to patients sooner than if they had waited for the usual trials. 

Given that most competitive intelligence teams are new, it seems strange that so many remain stuck, fixated on their traditional rivals. Mark Little of Covance, a global drug-development company, calls this "competitor myopia." "Too many professionals think their direct competitors are the only ones they are supposed to watch," says Little. "They need to look at all the threats—the payer, the technology, the supplier—before they set up their monitoring." 

I recall one assignment that hinged on a competitive misconception. The stage was a war game we ran for a client's Asia-Pacific marketplace. The product was an antiviral drug they hoped would make inroads there. The drug had an excellent reputation in the West. 

The client team focused on the usual pharmaceutical company rivals and their race to capture market share. But the real competition escaped their view—ancient Chinese herbal medicine. While everyone in the room knew that herbal medicines had no clinical trial evidence to support efficacy claims, it made no difference in the competitive landscape. The Chinese people believed in herbal remedies, and more than three-quarters of the market would rather drink an herbal potion than inject or swallow a tested pharmaceutical therapy.  

Look around your healthcare niche and you will see other hidden-in-plain-sight threats (or opportunities). One example that many companies miss is nutraceuticals, which analysts peg to grow into a $15-billion-plus industry. Stuck in the old model of placing big bets on long-term clinial trials, intelligence programs may fail when they overlook new, more nimble entrants. 

 If intelligence is about discovering the unexpected, where do you start looking?  

It may sound surprising, but I have found job-posting sites a great way to see which entities are exploring an industry or therapeutic category. Check out a product or technology by typing in a few key search terms into job-hunting sites and you'll find a surprising number of nearly invisible competitors playing in your market.  

 resulted in 160 postings. The companies listed included a wide range of traditional firms, but there were also a number of biotech startups, a medical device company, and a host of medical and wellness centers conducting research. 

Obesity is a relatively new market, so rivals may pop up anywhere. Perhaps a new device or a lifestyle treatment will prove more economically effective than a pill. If so, the wellness approach, or a homeopathic or herbal remedy, may win over the pharmaceutical drug solution. 

Searching job-posting sites is one fresh way to research the healthcare landscape. But consider these additional alternatives that offer a new way of watching for future opportunities or threats. 

Ask yourself: What genetic population is a potential competitor targeting?

 Watch this marker, which may lead to a drug-diagnostic launch. If a rival can offer both the drug and a diagnostic as a package, that may give it a leg up in narrow formulary lists.

 Patient-advocacy groups have learned a lot from Gleevec. We have witnessed patient groups shaping clinical trials in many therapeutic areas and changing the way biotechs position their early-stage drugs.

 The cardinal rule of intelligence: Wherever money is exchanged, so is information. It's not just about scientific conferences any more. "I am seeing more of a convergence among the biotech, pharma, and the investment community than ever before," says the former 

 editor Gottlieb. "Some of the investor conferences have become big forums for discussions of pharmaceutical business development and competitive activity." 

 Watch the health economics, and remember that whoever wins the race to the formulary wins the game. The overall clinical and financial effectiveness of a drug or a treatment may overshadow the science. 

I have met too many executives who dismiss blogs and chat rooms, such as 

, as wastes of time. Unsubstantiated. Bombastic. Self-important. Dismiss it you might, but it is all part of the transparency—the not-yet-vetted insights—that could reveal a rival's future moves.  

For example, in between the bragging rites and testosterone flowing through Cafepharma diatribes, we learnt how salespeople think about the products they sell or how they view competitive positioning. These blogs and discussion boards may not reveal strategic secrets, but they will uncover a competitive dynamic. Think of discussion forums as another channel on your television set, another window on the world in which you compete. 

Below are a few noteworthy blogs worth considering. 

Business intelligence in a time of greater transparency is a whole new ball game. To play it well, be sure to look for surprising insights, expand your list of competitors of interest, and don't let Google be your only guide.

The Intelligence Diaries

In the world of hospital care, specifically in the area of preventing certain hospital-acquired infections, it's finally possible to "benchmark perfection." So argues Lucian Leape in an interview in the online version of 

). "This means that we can stop talking about reducing medication errors by 50 percent or improving handwashing by 30 percent, and so forth," says Leape, an adjunct professor of health policy at Harvard best known for his work on patient safety. "We now have convincing demonstrations that when the effort is made and new practices are implemented, we can actually eliminate certain adverse events."  

Among his demonstrations: a group of 68 Michigan hospitals that managed to achieve zero infections of central-line IVs and zero cases of ventilator-related pneumonia for six months.  

That's remarkable, especially when you realize that injuries to hospitalized patients are much more common than we once thought—something we've learned thanks to the Institute for Healthcare Improvement's Trigger Tool for detecting adverse events. 

"The frightening thing," Leape explained in the interview, "is that when hospitals have used this trigger tool—and now there are dozens that have—they find that not 4 percent of injuries, which is what we found in ...1991, but 40 percent of patients admitted will experience some sort of injury." Some of the injuries are mild—rashes or momentary changes in blood pressure—but by focusing on injuries of any sort rather than on deaths or errors, researchers build up a body of events that they can eliminate with good management. 

The latter part of the interview is devoted to strategies for perfection. Some are predictable—training, teams, transparency. Others are more controversial. Leape is iffy on pay-for-performance; he's skeptical about setting up a program that actually incentivizes the correct behaviors. On the whole, he'd rather pay for results, which is even trickier. And he backs an insurance company initiative to refuse to pay for 27 "never" events—amputating the wrong leg, the death of the mother in a normal delivery, and so forth. Perhaps most controversially, he thinks that when patients are harmed, the hospital should automatically inform them, apologize, and compensate them. That may sounds like it would open the floodgates to litigation, but Leape cites several cases in which the strategy led to a decrease in litigation and lower overall payouts for liability. 

Hospitals are very different from drug manufacturers, of course, and pharma is nowhere near benchmarking perfection. But there are elements in Leape's argument that are incredibly appealing: the focus on eliminating harm rather than eliminating error, the shift of risk onto the party who's able to do something about it, and the desire to take risk away from the patient. 

That may sound counterintuitive for pharma: All drugs are dangerous, and patients ultimately have to take responsibility for themselves. But short of that, the idea that pharmaceutical companies could devote themselves to eliminating risk, and that they would be compensated for their success at maximizing good outcomes, is incredibly appealing. 

How could we do it? I haven't the faintest. But, then again, I never imagined before now that I'd hear of a hospital that could run six months without a single ventilator-related pneumonia. Apparently the impossible isn't always out of the question. 

From the Editor

A hospital safety expert says it's now possible to completely eliminate certain adverse events. Pharma can't claim the same yet, but is it time for us to start imagining a time when we can "benchmark perfection"?

Pharmaceutical Executive-11-01-2007

More Confidence—or Slower Development?

FDA's Approvable Problem

Step It Up: Branding Roundtable

Rx Club Awards: Human Interest

The Intelligence Diaries

Chasing Perfection

Celebrating Innovation: Prix Galien Photo Gallery

From 3-D to Pop-ups: Go Dimensional

India vs. China

Reach KOLs Online

Preemption Preview: Q&A with Mark Herrmann, Jones Day

Welcome Some Disruption in Your Life