One pioneering company is hoping to solve what has become a Catch-22 for biologics makers: As physicians receive fewer financial incentives to administer infusion and injectable products in their offices, patients are forced to seek treatment in costlier, less convenient hospital or home settings.

The privately funded Active Care Network, after raising $5.3 million, has put together a group of 1,400 infusion clinics to deliver these drugs to patients. It negotiates discounts with specialty pharmacies, and its clinics offer evening and weekend hours--with a goal of increasing patient compliance by making biologics easier and cheaper to receive.

The company's debut in April also speaks to the greater price pressures that payers are facing. Specialty drugs, many of them biologics, are enjoying double-digit growth in major markets, according to IMS Health. And without a clear regulatory pathway for follow-on proteins--at least in the United States and at least until Congress moves draft legislation to the floor--these therapies are sheltered from patent challenges.

As a result, payers are resisting the traditional method of "buy and bill," by which physicians purchase biologics, administer them in-office, and charge health plans an inflated cost. Despite physician balking, plans increasingly prefer to negotiate with specialty pharmacies directly, leaving patients to travel to hospitals or hire home-health aids for administration of their treatment.

"Plans have really pulled back because of the sheer number of biologics hitting the market," said ACN founder, president, and CEO Judi Grupp, who previously led the Consumer Health Coalition, which advocates for public health insurance. But "when the plans put these policies in place, they didn't really think about the downstream impact. [They've created] a very fragmented industry."

Grupp pointed to Johnson & Johnson's Remicade (infliximab), a Crohn's disease drug, as the "buy-and-bill poster child." In the old days, about half of physicians choose to do infusions; now that number has dropped to 25 percent. "It really impacted their bottom line in a big way," she said. ACN is also hoping to function as a clearinghouse for post-marketing patient-outcomes data. According to the network, it has already signed up a number of "heavyweight biotech companies," but their names have not been publicly disclosed.

The clinics will also provide educational materials to patients, and help clinicians navigate through the complexities of administering biologics--even as their labels change. A proposed black box on Genentech asthma drug Xolair (omalizumab), for instance, would require health practitioners to monitor patients for two hours in case of an adverse reaction.

"Everyone focuses on the drug cost, but the drug cost is only [part of] the actual cost of therapy," Grupp said.

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Active Care Network and biotech partners aim to increase patient compliance.

New 'Infusion Clinics' for Cheaper, Easier Biologics Delivery

With the whole world wagging its collective finger at Andrew Speaker--the TB-infected lawyer who triggered a global health scare last week when word got out that he had boarded seven commercial airline flights for his European wedding and honeymoon--a new report highlights why drug development has stalled in this area.

The 31-year-old Speaker was diagnosed with extreme drug resistant (XDR) tuberculosis, a potentially deadly bacterial strain that does not respond to at least three of the six classes of second-line TB drugs. But because the market for new treatments for XDR TB is tiny, drug makers can hope to recoup a mere fraction of the cost of R&D.

TB Alliance's "Pathway to Patients" report, compiled with IMS Health, was released May 14--two weeks before the media firestorm hit Speaker. But Nina Schwalbe, director of policy for the not-for-profit drug developer, noted that there's still a connection to be made. "[The media coverage] needs to put attention on the fact that there have been no new drugs in 40 years," she said. "Right now, a major failing is drug resistance."

The market for the four first-line TB drugs is $315 million a year, according to the report, and that number is static. Even if all patients with the disease were treated with the most expensive agents, the market would still reach a ceiling of just $418 million. "It's small because the regimens are inexpensive," Schwalbe said. "It doesn't seem to be a profit-making venture."

For second-line treatments, meanwhile, the market is only $54 million a year. But despite the fact that unmet need persists, that market is growing only sluggishly. "There's slow potential to scale up," Schwalbe said. "It would be hard to believe that an incredibly expensive drug could sell at an incredibly expensive price in developing nations." The challenge of second-line therapies also includes getting drugs to patients; a typical regimen lasts at least two years and can have a dizzying array of side effects.

Schwalbe also noted that it's misleading to call the sale of TB drugs a true "market." The majority of products are purchased by national governments and distributed locally, while in certain countries, such as India, 75 percent of sales come from the private sector. "The TB drug market is fragmented and complicated," Schwalbe said, adding that these harsh realities have kept drug firms from investing in R&D for products that work faster with fewer side effects.

TB Alliance--which works with companies like Bayer, GlaxoSmithKline, and Novartis as well as the Bill & Melinda Gates Foundation--is one of a growing number of public-private partnerships dedicated to neglected diseases. "This is going to have to be a group effort," Schwalbe said.

Meantime, Speaker, in quarantine since May 25, has started on a carefully selected three-drug drug regimen that his doctors admit is something of a crapshoot. Should the treatment fail to kill the superbug, his tennis-ball-size lung infection may be removed surgically--not exactly the most cost-effective global solution to the XDR-TB riddle.

Drug makers find it hard to recoup development costs, report finds.

TB 'Superbug' Case Highlights New-Drug Void

A major marketing campaign has allowed Allergan to go against the grain of Rx-to-OTC switching, but with at least three competitors angling for a piece of the dry-eye market, the maverick firm can't get too comfortable.

The company--best known for turning an eye-spasm drug into cosmetic bonanza Botox--is now seeing returns on its marketing investment in Restasis, a prescription eye drop for chronic dry eye.

"Allergan really had to change the paradigm of treatment from over-the-counter remedies to prescription remedies--which is a little bit against the current," said Calvin Roberts, an ophthalmologist at the Weill Medical College of Cornell University. "They persevered--and it's now opened up this field."

The anti-inflammatory drug encountered resistance from physicians after its 2002 approval because of concerns about long-term safety, the length of time it took for patients to see improvement, and its high price tag. Yet Roberts noted that safety doubts have been alleviated, and "many, if not most," formularies now cover Restasis. (An Allergan representative noted that about 95 percent of insurance plans reimburse for Restasis, with patient copays averaging $26.72.)

In its 2006 earnings report, Allergan noted that it hiked the price of Restasis 7 percent, after a 3.5 percent increase in 2005. The product last year brought in $270.2 million in revenue, a 41.6 percent jump over the previous year.

"There's no doubt that dry eye is moving from an over-the-counter palliative paradigm to a prescription therapeutic paradigm," said Eric Donnenfeld, an Allergan consultant and ophthalmologist at Nassau University Medical Center. Aging patients are also asking their doctors about the eye drop, which has been heavily promoted with a celebrity campaign. "Patients are definitely more knowledgeable. It's the Baby-Boomers who are taking control of their medical care," Donnenfeld added.

Factors like an aging population and a greater demand for LASIK surgery have increased the number of dry-eye complaints, which together account for about 25 percent of patient cases, according to Elise Brisco, an optometrist at the Hollywood Vision Center in Los Angeles and a spokesperson for the California Optometric Association. "Restasis is not for everyone," she said, since it only treats inflammatory conditions, "but when it works, it works well."

Over the past two years, Allergan has expanded its sales force and marketing budget; its selling, general, and administrative expenses increased 18.3 percent in 2006, primarily due to the Restasis campaign.

That push has occurred alongside changes in how doctors approach the condition, and the Wilmer Eye Institute recently assembled an international panel to create a single set of treatment guidelines. Among its recommendations: more aggressive use of anti-inflammatory drugs like Restasis for patients with moderate symptoms.

Not surprisingly, competitors are revving up to give Restasis a run for its money. Inspire has been in back-and-forth discussions with FDA since 2003 over Prolacria, while Alcon and biotech Lantibio are betting on treatments that are still in Phase III trials.

Restasis goes against the grain of Rx-to-OTC switching.

Pharmaceutical Executive-06-06-2007

New 'Infusion Clinics' for Cheaper, Easier Biologics Delivery

TB 'Superbug' Case Highlights New-Drug Void

Pitch Blitz for Dry-Eye Drops Raises Allergan's Profile, Profits