Trump, Drug Prices and Deregulation

Posted in BioBusiness, BioEducation, BioJobBuzz

Donald Trump met with pharmaceutical leaders and their lobbyists yesterday. At the outset of the meeting he castigated executives for the high prices of prescriptions drugs in the US. Then, he mentioned that he thought that the regulations guiding new drug approvals by US Food and Drug Administration (FDA) are overly complex and are interfering with discovery and development of new life saving molecules for the American public.

While pharma execs may have cringed at the mention of high drug prices (Republicans never think that drug prices are too high), a majority were emboldened by the mention of loosening FDA regulations for new drug approvals. Drug makers have historically complained that overly aggressive FDA regulations drive up the costs associated with new drug development. What they fail to mention is that the regulations imposed by FDA on drug development are necessary to ensure drug efficacy and public safety.  And if you look at the overall track record of FDA for new drug approvals over the past 40 years the agency is clearly doing its jobs (less than 3% of approved drugs have been recalled from the market). Prior to implementation of modern FDA regulations and current good manufacturing practices (CGMP), the efficacy and safety of new drugs could not be accurately determined or guaranteed.

Now let’s talk about new drug discovery and development prices. Current estimates suggest that it takes  $1.0-2.0 billion to bring a new prescription drug to market. While the actual costs may vary, what the drug companies do not tell you is that included in those cost are the manufacturing, marketing and sales of the drug once it is approved. That said, the actual discovery and development of the drug is much less costly. Nevertheless, the high costs of discovery and development is the explanation that pharma executives give to justify high drug prices. Also, they frequently justify high prices because the high failure rate of new molecules i.e. we spend a lot of money on drugs that we want to advance but since so many of them fail we have to charge high prices for the ones that successfully garner regulatory approval.

While these arguments may be compelling let’s take the example of Lipitor, a cholesterol-lowing drug that has been on the market for about 20 years.  The graph below shows the sales history of Lipitor from 2003-2015.

As you can see the return on investment by Pfizer for Lipitor far exceeded the $1.0 billion development costs of the molecule. Also, the graph shows that Lipitor sales drastically fell off in 2012.  This is because Lipitor lost patent protection in 2011 and several generic competitors appeared on the market. Yet, despite the appearance of low cost generic alternatives, Lipitor sales were almost $2.0 billion in 2015.  Of course, you can argue that Lipitor is an extraordinary example and there are not that many $1.0 billion drugs out there. However, you would be wrong

Next, let’s consider how drug companies determine their retail price for the drugs that they sell. For those of you who may not know, the US government including its agencies, FDA and the Centers for Medicare and Medicaid Services (the largest provider of prescription drugs in the US) are not legally allowed to negotiate drug prices with their manufacturers. That right….you heard right. Instead, drug companies are required to tell FDA how much they plan to charge and then it is up to insurance companies/third party payers to determine whether or not they will reimburse patients costs for those drugs.  Put simply, the drug companies and insurers set drug prices in the US. This is in marked contrast with the rest of the world (possibly excluding New Zealand) where governments negotiate with drug companies to set drug prices that are affordable and consistent with the economic realities of their countries.

You may be asking what does all of this have to do with Trump and his news conference yesterday?

First, Trump essentially put drug companies on notice that he thinks US prescription drug prices are too high. Second, Trump also acknowledged that overly aggressive FDA regulations are responsible for the rise costs of prescription drugs in this country. Therefore, according to Trump, the best way to lower drug prices in the US is  to lower the regulatory requirements for new prescription drug development and approval. Theoretically, lowering regulatory requirements ought to help reduce drug discovery and manufacturing costs which, in turn, should translates into lower prescription drug costs. However, as previously mentioned, the government has no leverage over drug companies when it comes to drug prices. That said, less than mandatory price controls would have no noticeable or little effect on containing rising prescription drug prices in the US.

Ironically, the Affordable Care Act (aka Obamacare) is lowering drug prices by holding drug manufacturers more accountable for the drugs that they develop and try to bring to market. To wit, based on certain provisions of the ACA (which have nothing to do with the retail insurance part of the Act) drug manufacturers must meet certain clinical and safety benchmarks before the Centers for Medicare and Medicaid services will reimburse its patients for approved prescription drugs. To that point, the ACA stipulates that the government will not reimburse patients for new prescription drugs unless they demonstrate quantifiable improvements to clinical efficacy or safety!  In other words, the government will not pay a higher price for new prescription drugs if its efficacy or safety is not markedly better than existing cheaper alternatives.  Not surprisingly, these regulations have forced drug makers to think more strategically and to only advance drug candidates that are superior to already existing drugs. 

So, what does this all mean?  First, if the ACA is repealed or modified it will weaken the ability of the federal government to prevent drug prices from rising.  Second, if FDA regulations are relaxed or reduced, it may lower drugmaker’s overhead costs but it will not necessarily lower drug prices (remember drug companies set drug prices and government cannot approve or not approve drugs based solely on price).  Third, before FDA modernized itself in the late 1930s the US drug supply was not safe and there were many drugs on that market that offered no clinical benefits). Consequently, deregulation may be good for drug companies but not necessarily good for the American public.

Until next time….

Good Luck and Good Job Hunting!!!!!!! 

FDA Announces Social Media Guidelines–Yawn!

Posted in Social Media

After a very long blogging absence, I decided that it was time for me to begin to write posts on things that continue to pique my interest.  The recent announcement that the US Food and Drug Administration (FDA) has finally released its long awaited guidance on the use of social media in the life sciences industry including pharma, biotech and med. devices.

While words like long awaited have been used to describe this monumental announcement, I think nobody really cares anymore about what the agency thinks about social media!  Put simply, despite some interested starts and stops, social media is not an integral part of the life sciences industry and likely will never be.  In the beginning (about a decade ago) social media transformed a number of industries by introducing transparency and engaging stakeholders to improve their bottom lines. Unfortunately, the modus operandi in the life sciences industry, by virtue of it business model, is opaqueness not transparency. Further, life scientists and life science employees are not the most social individuals and their use of social media for business purposes is almost non-existent. Consequently, social media and the life science industry are not a good fit!!!! Finally, early players in the life science social media space including Novo Nordisk and J&J have already leveraged what they could using social media and have moved on.

In summary, while it may be a banner day at FDA because the agency finally released its social media guidelines, I do not think anybody really cares anymore. The trajectory of social media is on its downward slope and it is no longer fresh or new (except maybe in the minds of pharma/biotech executives).  In fact, social media is no longer new media and is now considered a standard staple of all communication platforms. While many industries benefited from social media it was never a priority for the life sciences industry and industry executives (and US regulators) did everything in their collective power to ensure that social media did not interfere with the secrecy and intentional opaqueness that dominates the industry.

Until next time,

Good luck and Good Job Hunting

Ranbaxy to Shed as Many as 400 Middle and Senior Management Jobs

Posted in BioBusiness

The UK’s Economic Times reported  today that the troubled Indian generic drug manufacturer Ranbaxy may shed as many as 400 jobs from its various divisions. Most of the persons receiving pink slips will be senior and middle management who are likely losing their jobs because of ongoing serious drug manufacturing problems that have plagued the company for over three years.  The drug maker employs about 14, 600 people in 43 countries.

While the job cuts do not represent a significant percentage of Ranbaxy’s workforce, Daiichi Sankyo which owns the company, is likely eliminating members of the management team that have been responsible for the company’s ongoing manufacturing problems. According to the Economic Times article

“On Thursday, some senior executives from the finance department at Ranbaxy were asked to leave. On Friday, some senior executives from the Research & Development wing were given marching orders,” an employee familiar with the job cuts told ET. Another executive said some officials from the API(active pharma ingredient) division have also been handed pink slips.

This past May, Ranbaxy paid the US Department of Justice $500 million to settle criminal and civil charges to resolve the manufacturing problems that prompted the US Food and Drug Administration (FDA) to ban the sale of dozens of drugs manufactured by the company.  More recently, FDA inspectors issued an unsatisfactory inspection report for one of the company’s manufacturing plants in India.

Ranbaxy is one of the world’s leading generic drug manufactures and the company’s ongoing manufacturing problems have certainly hurt Daiichi Sankyo’s image. Also, it has led some analyst to question whether or not Daiichi Sankyo ought to have purchased the troubled generic manufacturer for $4.6 billion in 2008.

Until next time…

Good Luck and Good Job Hunting!!!!!!

FDA and Social Media: Much Ado About Nothing

Posted in Social Media, Uncategorized

Since the inception of blogs, Facebook, Twitter, YouTube and other social media platforms, many life sciences companies, mainly big pharma, have been anxiously awaiting regulatory guidance from the US Food and Drug Administration on how to use them. Interestingly, FDA did issue some guidance in 2012 on it use last year but many drugmakers felt that it was insufficient and not detailed enough.  Despite the lack of clearly defined regulatory guidance, many companies took the social media plunge anyway. And according to a recent survey of regulatory actions and letters conducted by Mark Senak author of the fabulous EyeonFDA Blog the agency has done very little to thwart the social media strategies implemented by drug companies. In fact, there has been no obvious increase in the number of warning letters or violation letters regarding the use of digital or social media as compared with traditional media violations.

Senak drew this conclusion after analyzing 173 warning and notice of violation letters (advertising and media related) that were issued by the agency from 2008 to 2012.  Of the 173 regulatory letters that were issued, 675 violations were cited and only 43% involved digital media.  And, for the most part, most of the cited violation had little to do with the digital or social media vehicle used but more to do with the message being delivered. For the full report click here.

What does this all mean? While it is difficult to draw any firm conclusion, I believe that the bottom line is that the importance and significant of the long awaited FDA guidance on the use of social media has been overstated. Put simply, if you follow the existing rules guiding advertising and print media, companies ought to be able to craft a regulatory-compliant social media communication strategy without the fear of running afoul of the agency.  Those who violate the existing rules will likely be caught and have to clean up their acts.

The bottom line. Many drug companies have been able to mount very effective social media campaigns without getting into trouble with FDA.  The key to success is following the rules and implementing a digital/social media campaign that has passed internal regulatory muster to insure that everything is in order and regulatory compliant. Companies that have made the investment into digital/social media will be successful whereas others that jump into the game without taking the time to understand the rules of engagement will fail.

Until next time…

Good Luck and Good Job Hunting!!!!

 

 

FDA Finally Issues Some Biosimilar Guidance Documents

Posted in BioEducation

The US Food and Drug Administration finally released portions of the long-awaited guidance documents that will help to implement the development and approval of biosimilar molecules under the Biologics Price Competition and Innovation Act of 2009 (BPCIA)

Yesterday the agency issued three guidance documents which represent only a small portion of the total guidance package that will be necessary to develop and commercialize biosimilar products in the US

They are:

  1. Scientific Considerations in Demonstrating Biosimilarity to a Reference Product
  2. Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009
  3. Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product

For a more detailed analysis of the guidance documents please check out a post by James N. Czaban. According to Czaban (and many other in the biosimilar space) these first three guidance documents represent “baby steps” towards implementing the specifics of BPCIA. To that point, Czaban suggests that:

“These Guidances, while helpful in expressing some of the FDA’s general approaches, but will be of limited specific value with respect to any particular product”

Stay tuned for more updates.

Until next time…

Good Luck and Good Job Hunting!!!!!!

 

Regulatory Affairs Update; FDA 483 and Warning Letters Trends for 2012

Posted in BioEducation

Those of you who manufacture products approved by the US Food and Drug Administration (FDA) are well aware of the importance of complying with Current Good Manufacturing Practices (cGMP) during FDA mandated inspections of your manufacturing facilities. Failure to comply with cGMP requirements during an inspections results in the issuance of 483s. And if you fail to adequately address the concerns of the agency outlined in 483s, it may ultimately result in issuance of warning letter to your company.

FDA is more vigilant and aggressive than ever before with its 483 and warning letter enforcement procedures. In the words of Commissioner Margaret Hamburg, FDA is quick, visible and vigilant.  With this in mind, it may be worthwhile to participate in a webinar offered by Expert Briefings.com entitled “Top Compliance Trends for 483 and Warning Letters for 2012—Based on Rare FDA Data.”

The webinar will be held on March 8, 2012 from 2:00-3:30 PM EST and Dennis Moore, Managing Partner, AUK Technical Services and a 28 year veteran FDA investigator will lead it. 

Topics to be covered include:

  • Top warning letter trends for 2012, such as more 806 enforcement
  • The Top 10 QS 483 Observations for 2010 and 2011
  • Most common quality system failures for drugs for 2010
  • Top drug and device citations in 483s for 2010
  • Top drug and device warning letter citations for 2010
  • Total 2010 BIMO inspections for CDER, CBER, CDRH, and CVM
  • Details on clinical investigator, sponsor/monitor and IRB audits for 2010
  • Most common sponsor deficiencies for 2010
  • The rising trend of ‘cease to market’ letters, one of which hit a NY pharma company in 2011
  • The total number of 483s issued in 2010 and 2011 – an all time high
  • Total CAPA 483 observations in 2010
  • How long to receive a warning letter, based upon which offices issues it
  • 483 inspection targets for drugs and devices for 2010, 2011, and 2012
  • Total warning letters issued by drug and device category in 2010
  • Which district offices write the most warning letters
  • How long to receive a warning letter, based upon issuing office
  • Warning letters issued by QS system for 2010
  • 483s broken down by QS subsystem for 2010
  • Warning letters by CFR section
  • Top device 483 observations for 2010
  • Details on process validation observations for 2010
  • Design control 483 observations by category for 2010
  • Click here to visit Expertbriefings.com.

Click here to visit Expertbriefings.com.

I hope to see (hear ?) you at the webinar!

 

Some Good and Bad Investment News for Biotech Companies

Posted in BioEducation

Let’s start with the good news first. A report issued by the National Capital Association and PricewaterhouseCoopers found that venture capital investment in biotechnology grew 22 percent in 2011. And, now the bad news; initial funding for biotechnology startups seeking investment hit a 16 year low last year. The consensus among financial analysts is that life science investors are increasingly focusing on later stage companies because they carry less clinical and regulatory risks as compared with early stage ones. Put simply, VCs, like everyone else, have become much more risk adverse and do not want to invest in companies that don’t have a minimum history of success.

According to the report, venture firms spent $4.73 billion on 446 biotechnology companies in 2011, the highest dollar amount since 2007. Approximately, 153 biotechnology and medical devices companies received their first round of funding last year.

Finally, the US Food and Drug Administration approved 30 drugs in 2011; 13 of which were developed in part by venture funding.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!!

 

Sandoz Moves Its Biosimilar Development Strategy Forward

Posted in BioEducation

Sandoz, the generics division of Novartis, is currently the world leader in the biosimilar market. In fact, if it was not for Sandoz, the biosimilar industry may never have gotten started in the first place! As some of you may know, Sandoz sued FDA (and won) to gain approval of its biosimilar human growth hormone. While FDA contends that Omnitrope is not really a biosimilar (it was approved as a “drug” rather than a biologic) most analysts agree that it was the first biosimilar product ever approved and sold in the US. 

As part of its global biosimilar strategy, Sandoz today announced that it had initiated Phase III clinical trails for US approval of biosimilar version of recombinant human granulocyte-colony stimulating factor(G-CSF) or filgrastim (Amgen’s Neupogen®) and another for global launch of PEG-filgrastim (Amgen’s Neulasta®); a PEGylated form of G-CSF.

The filgrastim study is designed to evaluate the efficacy and safety of Sandoz’s biosimilar filgrastim versus Neupogen® in breast cancer patients eligible for myelosuppressive chemotherapy treatment. These trials expected to support extension of commercialization to the US, the largest global market for biologics. The pegfilgrastim study, which is being conducted in breast cancer patients undergoing myelosuppressive chemotherapy treatment, represents the next major step in the Sandoz global biosimilar development program. Previously, Sandoz announced that it had initiated late stage clinical trials for a biosimilar version of Roche’s monoclonal antibody cancer treatment Rituxan®). Finally, Sandoz has eight to ten different biosimilar molecules at various stages of development in its pipeline.

Sandoz currently markets and sells three biosimilars: filgrastim (Zario®), somatropin (Omnitrope®) and epoetin alfa (Binocrit®) in countries across Europe and elsewhere. As mentioned above Omnitrope is also sold in the US. However, because FDA has yet to craft a regulatory approval pathway for biosimilars (despite legislation mandating their approval) it is illegal to sell biosimilars (with the exception of Omnitrope) in the US.

Once vilified and staunchly opposed by most major pharmaceutical and biotechnology companies, the biosimilar business has been picking up steam in the past few years. To that end, companies like Merck, Pfizer, Teva and more recently Amgen and Biogen (all of whom lobbied against an approval pathway for biosimilars in the US) announced plans to compete on the global biosimilar market.

The decision of these companies to enter the biosimilar market is largely a result of downward pricing pressures on pharmaceutical and biotechnology drugs and near-empty drug pipelines at most major life sciences companies. Nevertheless, it is still not clear whether or not a robust biosimilar market truly exists. To wit, biosimilars have been in the market in the EU for the past fiver years and have not gained much traction there. However, the real biosimilar markets probably exist in China, Brazil and other emerging countries where there are large populations and emerging middle classes but drug prices are under tight government regulation. Because of this, the uptake of biosimilars in these markets will likely be greater than in Europe and the US.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!!!!!

 

An Analysis: Big Pharma and Social Media Usage

Posted in Social Media

A study conducted in November 2011 by Cegedim Strategic Data, a market research and promotional audit firm analyzed the world’s top 100 pharmaceutical companies expenditure on traditional promotional (marketing spends) and then compared that spending with their presence on Facebook and Twitter.

Not surprisingly, Pfizer, Novartis and Merck (the world’s largest big pharma companies) finished in the top three for traditional promotional spending. However, their use of social media i.e. Twitter and Facebook varied widely. For example, Pfizer—the top promotional spender—was first in its number of Twitter followers and third in the number of likes on Facebook. On the other hand, second ranked Novartis was fifth in the number of Twitter followers and in seventeenth position for likes on Facebook. Finally, third ranked Merck was fifteenth in the number of Twitter followers (third for the number of tweets) and in the tenth position for the number of likes on Facebook (but has more pages than any of its Facebook competitors).

Other notable companies included:

  • Johnson &Johnson, eleventh in promotional spending and number two on the number of Facebook likes
  • Roche, number fifteen on the promotional spending list was ranked number two for the number of Twitter followers
  • Proctor and Gamble which ranked a distant 54th in promotional spending was number four on the Twitter follower list

What does this all mean? A whole lot of nothing because nobody can determine what effects the use of social media has on the bottom line for most pharmaceutical companies. Unlike other industries, where social media can be used to sell products, it cannot be used for direct promotional purposes in the life sciences industry. While most people will tell you this is because of the lack of guidance by FDA on the use of social media, the bottom line is that social media will never be allowed for direct-to-consumer advertising in the pharmaceutical industry. That said, pharma and biotech will have to find other uses for social media including clinical trial recruitment and retention, adverse event reporting, employee recruitment and retention and education and outreach.

Until next time…

Good Luck and Good Tweeting (and Liking)

 

EyeonFDA Blog: Why FDA Needs to Be Clear About Social Media

Posted in Social Media

Mark Senak, author of the EyeonFDA blog and a life sciences/healthcare social media enthusiast, wrote a fantastic piece yesterday that provides cogent ideas and insights into the need for FDA to expeditiously craft guidance on the use of social media in the pharmaceutical and healthcare industries.

Here are the facts. First, according to the Pew Internet and American Life Project, social media has fundamentally changed the way in which we interact with one another and ushered in a new era of communication. Unlike the old, so-called “broadcast communication method”—information is continuously streamed from a static source, websites, television, radio etc, to perspective customers and stakeholders—the new paradigm requires that communications must be personal, portable and participatory for effective messaging. Second, the primary source of information sought by most persons who use the Internet is healthcare and medical information. While much of the content is accurate, some is not; which may put persons seeking medical information at great risk. In other words, social media is not just about marketing and medical education; it is also about preserving public health.

The agency has historically been unable to issue guidance on new forms of communication. For example, FDA held its first public meeting in 1996 on Internet use by life sciences and healthcare companies. Sadly, the agency has yet to issue any official guidance on this topic. In late 2009, FDA held another public meeting and promised that draft guidance on the internet and social media would be forthcoming by the end of 2010. Unfortunately the guidance did not materialize in 2010 and it has been delayed twice in 2011. Recently, the agency publicly reaffirmed its commitment to issuing the guidance but without a specific timetable for its release. Consequently, it is anyone’s guess when or if the guidance will be released.

Unlike many, I do not believe that FDA guidance on the Internet and social media is absolutely necessary. However, I will admit that issuance of said guidance will provide drug and healthcare companies with some of the assurances that they need in order to actively use social media to engage patients, physicians and other stakeholders. For this reason alone, FDA ought to issue the guidance (which is never perfect and always a work in progress) and end the social media stalemate that currently exists. Failure to do so may have serious consequences on the public health of many Americans.

Hat tip to Mark!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!