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Weather the storm

It has been a testing five years
Trees on a stormy nightIf the job of industry analysts is to speculate on how challenges will impact on the market, as well as individual company performances, the workload for those who survey pharma is set to grow as the sector faces a wave of patent losses in coming years. Along with the shift from a blockbuster-based business model to the provision of more targeted therapeutics - arguably the challenge of the day - there is huge scope for speculating about pharma's performance; especially given that the industry is not unaccustomed to dealing with tough tests and will therefore find workable solutions.

Several pharma firms are facing severe revenue erosion from 2008-2014, and in some cases beyond, as brand protection expires on products which earned their makers millions as blockbusters.

Added to this are several incidences in Europe over the past five years of government crackdowns on marketing and promotion, the effects of controversial health technology assessment outcomes, thinning pipelines and increasingly tighter commercial opportunities. It could be argued that the challenge of filling revenue gaps left by patent expiries is just another trial for business leaders to overcome.

In this review of the key challenges, PME looks back at some of the biggest issues to hit the headlines in recent years.

Health Select Committee
The world expects instant gratification - things seem to have gone completely out of balance in terms of public perception. These were the words of senior AstraZeneca (AZ) executive Dr John Patterson commenting, in 2005, on what he believed was the public's skewed perception of the risk/benefit balance of pharmaceutical products.

Defending the actions of the UK pharmaceutical industry, most notably its marketing activities, Dr Patterson told MPs on the Health Select Committee (HSC) that in the public's opinion, things [drugs] are either wonder cures or killer medicines.

His comments emerged from a cross-examination by the HSC, in which AZ and GlaxoSmithKline (GSK) - essentially representing the UK pharmaceutical industry - were interrogated about the claimed 'undue influence' of pharma over prescribers. Companies were effectively accused of disease-mongering and using inappropriate incentives, overly persuasive methods or furtive marketing techniques in order to boost the numbers of their product prescribed by doctors.
The R&D-based industry continued to deliver incremental as well as breakthrough innovations for patients and there were concerns that the HSC investigation would severely damage its already poor reputation in the public eye - not only in the UK but across Europe. In previous years, companies had been publicly reprimanded for what the media termed 'marketing-related scandals' around Europe, most notably in Italy.

Other assertions made by the HSC included those that pharma routinely covered up negative trial results by failing to publish them - even designing trials which were set up specifically to produce only positive results - as well as attempting to manipulate medical journals by offering to 'buy' significant numbers of reprints should they publish positive reviews of trial results.

Overall, it was suggested publicly that pharma inappropriately influenced several key links in the marketing process in order to boost sales.

The group of British MPs warned: The aggressive promotion of medicines shortly after launch, the sheer volume of information that is received by prescribers and the 'promotional hospitality masquerading as education' all contribute to the inappropriate prescription of medicines.

In due course, the UK government responded with several suggestions for curbing 'excessive' marketing. However, the quality of arguments and transparency of evidence provided by the pharma companies questioned meant that it was not as damning, nor as far reaching in its efforts to restrict marketing, as many in the UK and Europe had feared.

The authorities advocated proper controls to ensure that marketing carried out by pharmaceutical companies is acceptable, yet, at the same time, were able to conclude that there is no indication that the measures currently in place are not effective.

Marketing crackdown
Pharma is not the only industry to have faced crackdowns from global authorities with regard to promotional activities. However, perhaps due to the significant funds involved and the nature of its customer-buyer relationship, pharma has faced - and continues to face - more overt scrutiny and reprimand than some others.

Probing 'regulatory offensives' occur at least once per decade for pharma, such as the federal investigation conducted in the US a few years ago in which accusations centred around 'illegal' or unethical marketing, or alleged manipulation of government pricing systems.

Various companies received court subpoenas while some were hit with substantial financial penalties. Cases were reported relatively widely by the media between 2002-2005 with several of the stories making the front pages of business sections throughout Europe.

According to an expert in pharmaceutical law, Bradley Thompson of US law firm Baker & Daniels, the success of a few prosecutors - in targeting pharma companies and winning large cases - had prompted other prosecutors and government agencies to follow suit.

One name in particular associated with several of the keynote cases was Eliot Spitzer, then New York attorney general, who notoriously took action against GSK and Pharmacia (among other pharmaceutical cases) for allegedly 'tampering' with drug reimbursement schemes in order to inflate the price of prescription medicines to consumers and government health plans.

The lawsuit in 2003 accused the companies of bribing doctors to buy more drugs by taking advantage of the government's average wholesale price system, claiming the firms inflated the price reported to the government, charged doctors a reduced price, and then kept the difference. GSK blamed the design and administration of the State's healthcare programmes for the results.

Other news stories originating from the US during this litigious period included: a subpoena for Wyeth, instructed by the Inspector General for the US Office of Personnel Management, to provide documents in relation to accusations of over-aggressively marketing the antidepressant Efexor; a federal probe into Lilly's marketing practices for Zyprexa, Prozac and Evista; an 'admission' of fraud and payment of $430m by Pfizer to end controversy over illegal marketing (by Warner-Lambert) of Neurontin; a $704m fine for Serono, paid to buy its way out of a four-year long US government investigation into conspiracy to market an AIDS wasting drug illegally; and a $435m fine and 'guilty' plea by Schering-Plough in order to settle a US federal investigation into sales and marketing practices.

In retrospect these cases reflect of the power and determination of the authorities when it is felt that a crackdown on pharma is due.

Dashed expectations
Every pharma company has to be prepared to take a hit when a drug does not bring in the hoped for return on investment. Generally a company is able to cut its losses by ceasing work on a treatment before it reaches the market but in the past five years Merck and Pfizer have withdrawn high profile treatments post launch and GSK has seen sales of one of its top revenue earners slump.

Vioxx
On September 30 2004, Merck voluntarily withdrew the NSAID Vioxx after long-term high-dosage use was linked with increased risk of heart attack and stroke. Vioxx sales had reached $2.5bn in 2003 and an estimated 80 billion people worldwide had taken the drug. Vioxx was the treatment of choice for osteoarthritis, acute pain and dysmenorrhoea because its mode of action - inhibiting COX-2 - made it less likely to cause peptic ulcers.

The FDA approved Vioxx in 1999. Merck's VIGOR study, conducted in 2000, indicated that the risk of heart attack was four times higher in patients on Vioxx than those on the established NSAID naproxen - although only 0.4 per cent overall. Merck interpreted this as being a result of the protective effect offered by naproxen, rather than a serious side effect of Vioxx. The FDA introduced a warning label on the product in 2002.

Then a smaller scale trial of Vioxx to assess its prophylactic effect in colorectal polyps (APPROVe), that Merck had commenced in 2001, suggested that long-term use of the drug may almost double the risk of heart attack or stroke compared with placebo. This prompted the company to withdraw the drug.

The Lancet published a meta-analysis of the available studies on the safety of Vioxx, on November 5 2004, which concluded that the drug should have been withdrawn several years earlier. The same journal also published an editorial which condemned both Merck and the FDA. FDA analysts estimated that Vioxx caused between 88,000 and 139,000 heart attacks - of which a probable 30-40 per cent were fatal - in the five years the drug was on the market.

Later that month lawyers presented editors of the New England Journal of Medicine (NEJM), which had originally published the VIGOR paper, with further data on adverse effects that were known to Merck but not included. The paper's authors countered that this data was not collected within the 'cut off' dates for the trial and so had been omitted. On May 12 this year, executive editor Gregory Curfman and two colleagues published an editorial on NEJM's website calling on the VIGOR authors to submit a corrected manuscript.

Merck has since faced more than 10,000 litigation cases and almost 200 class action suits, in the US, in relation to patients who have had a heart attack while taking Vioxx. Orders to pay punitive damages and consumer fraud awards have recently been overturned on appeal saving Merck about $13m in damages, but this is a relatively small sum compared with the loss of revenue and the damage to the public perception of the company.

The case impacted on the whole NSAID market. In April 2005, Pfizer agreed to voluntarily withdraw its COX-2 inhibitor Bextra from the market in the EU. The company's other COX-2 inhibitor, Celebrex, is still available. NICE only recommends COX-2 inhibitors for those at 'high risk' of serious gastrointestinal problems such as those over 65 years and those taking other medicines which can increase the risk of ulcers.

The hope of a new class of NSAID, that could match the efficacy and safety of those already available but would be less likely to cause gastrointestinal problems, was never realised and Merck's reputation was damaged by the accusations of withholding data. It also re-fuelled the continuing debate about the effectiveness of academic peer review and the responsibility of both sides engaged in the publication process.

Exubera
From a patient perspective, certainly in chronic disease, the most eagerly awaited treatment breakthrough during the past five years has been inhaled insulin. About 170 million people worldwide have diabetes and the WHO predicts that there will be 300 million people with diabetes by 2025. Only about 10 per cent of these have Type 1 diabetes requiring daily insulin.
The proportion of people with Type 2 diabetes who require insulin injections is also small, but the increase in those with this condition means that the potential future market for insulin is huge. The concept of freedom from daily injections is very attractive and charities and healthcare workers followed the development of inhaled insulin closely.

Pfizer entered into an agreement with Aventis and Inhale Therapeutic Systems (now known as Nektar) in December 2000, to develop Exubera. However, initial hopes for an end to needles for all were not to be realised because those people who need a long-acting insulin as a background dose would still need to inject. Exubera was also associated with a slight impairment of lung function, requiring monitoring of patients. There have been concerns expressed also about the long-term effects on the lungs.

Pfizer withdrew its investment from Exubera in October 2007 and returned the worldwide rights to Nektar. Jeff Kinder, Chairman and CEO said that despite Pfizer's high expectations for the drug, Exubera has failed to gain the acceptance of patients and physicians.

Eli Lilly and Novo Nordisk also curtailled their inhaled insulin development programmes.

Exubera highlights the many challenges faced when developing a drug with the aim of improving ease of use for the patient, rather than efficacy or safety.

Avandia
Rosiglitazone is a diabetes drug in the thiazolidinedione class and works by boosting the effects of insulin. It is marketed by GSK as Avandia and was brought to market in 1999. In 2006 it was GSK's second highest earner with reported revenues of more than $2.6bn for Avandia and a further $376m from the fixed combination formulations Avandamet and Avaglim.

The drug's troubles began when a meta-analysis published in NEJM in May 2007 indicated that Avandia increases the risk of heart problems. IMS Health showed a 16 per cent drop in US Avandia prescriptions in the US in the first week after publication and, despite a PR campaign to reassure prescribers in the US of the drug's safety, prescriptions continued to fall.

In Europe, an EMEA review concluded that the benefits of taking the drug continued to outweigh the risks. However, in January 2008 it recommended updating the product information for Avandia, Avandamet and Avaglim to include a warning that these treatments are not recommended in patients with ischaemic heart disease and/or peripheral arterial disease. It also suggested that they should not be used in patients with acute coronary syndrome, such as angina or some types of myocardial infarction, because controlled trials have not been conducted in these patient groups.

An FDA advisory board has voted to keep the drug on the market but the effect on sales has been dramatic. To make matters worse, a paper published in Nature Medicine at the end of 2007 also suggested a link between Avandia and brittle bones in mice. In May this year, a lawsuit brought by US investors claiming they were misled about the drug's safety was dismissed but this did little to counter the negative publicity.

The Avandia story demonstrates how even a well-established drug can run into difficulties if its safety profile is called into question.

Seroxat
GSK had already faced problems in Europe and the US in the wake of a UK government inquiry that found the company withheld data on risk of Seroxat (Paxil in the US). Within two weeks of receiving the full set of data from the Seroxat trials the MHRA announced, in June 2003, that doctors must not give Seroxat to those aged under 18 years.

The EMEA allowed Seroxat to remain on the market but, on December 9 2004, informed patients, prescribers and parents that paroxetine should not be prescribed to children and warned prescribers to monitor closely adult patients at high risk of suicidal behaviour and/or suicidal ideation. It also recommends gradually reducing the dose over several weeks or months if decision of withdrawal is made. The financial consequences, in terms of lost revenue, were not so severe in this case as the drug was nearing the end of its patent. However, the company was sued in New York by Eliot Spitzer, settling for a payment of $2.5m (£1.25m) and an agreement to publish all its trial results - negative or positive - on a publicly available database. In this case, most of the damage to GSK's reputation was caused by the finding that they had withheld data - adding to the call for more transparency in the way pharma operates.

NICE battles
Funding decisions made by NICE in the UK are of interest throughout the Continent, particularly as the whole of Europe attempts to rein in healthcare costs. Two cases in particular hit the headlines during the past five years.

Herceptin
In 2000 Roche's Herceptin was made available to patients with advanced-stage HER2 breast cancer on the NHS by the newly founded National Institute for Clinical Excellence (NICE) - Health was not embodied into the title until April 2005.

Many oncology consultants felt that Herceptin should also be available in early-stage HER2 breast cancer, but in 2005 Roche had not yet applied to NICE for recommendation for these patients. Some Primary Care Trusts (PCTs) did make the drug available for this indication, on the counsel of consultants, but they were not obliged to do so. Patients Elaine Barber, Barbara Clark and Anne Marie Rogers, who were all in early-stage breast cancer, challenged the decisions of their PCTs not to fund their treatment with the drug. Although Barber lost her case, her PCT did agree to fund her treatment after the then Health Secretary Patricia Hewitt stepped in. Clarke and Rogers were also eventually successful in securing treatment.

After the Barber case Patricia Hewitt asked NICE to start work on assessing the drug as soon as possible so that it would be in a position to issue guidance quickly, if and when the drug was licensed for this indication.

In April 2006 the EMEA processed a recommendation for the drug in a record 27 days and in August the same year NICE agreed to fund the treatment of HER2 positive cancers in patients who had a moderate or high chance of their cancer returning after they have had surgery, radiotherapy or chemotherapy. One PCT (Newbury and Community) appealed the decision, raising concerns over treatment length, cost effectiveness and potential risks of the drug. It was overruled.

The result is often cited as a victory for 'patient power' but has been criticised by some because the drug was hurried through the procedures put in place to ensure the safety of treatments.

Aricept
Another story observed with interest throughout Europe was that of Aricept. In 2001 NICE recommended that the acetyl cholinesterase inhibitors - Aricept, Novartis' Exelon and Shire's Reminyl - be made available to patients with Alzheimer's disease. However, in 2006, the body withdrew its recommendation to fund the drug for patients in the early stages of the disease, stating that it did not produce enough of a positive effect.

In March 2007 Pfizer and Eisai, with the backing of the UK charity the Alzheimer's Society, won the right to a judicial review to challenge the decision.

One of the petitions presented by the challengers was that NICE make available for scrutiny the model used in the decision-making process. Their attempt failed although they did win a minor victory to make NICE reconsider its guidance to people with learning disabilities and those whose first language is not English.

Pfizer and Eisai appealed in September 2007. This time the court ruled that NICE was not sufficiently transparent when disclosing why it decided to limit the access to the drugs. The judge, Lord Justice Richards, said that by not releasing the model used to reach its decision, NICE had put people who wanted to challenge it at a 'significant disadvantage'.

The NICE decision to limit access still stands but the order to make the decision-making process more open should enable pharma companies to better prepare for NICE assessment in the future, with clearer expectations for review processes.

The outlook
Most pharma companies are resigned to the fact that the days of relying on one or two big selling drugs to carry the whole company are over. The next five years are likely to see a continuation of the move towards niche markets and personalised medicine and away from attempts to find a panacea for a whole disease area. This may enable the industry to shake off the suspicion that it is inclined to bend the rules in order to 'big up' a therapy to blockbuster status.

The Authors
Rob Skelding is a freelance healthcare and phamaceutical journalist and former editor of Pharmaceutical Marketing Europe
Kerry Holmes is editor of Pharmaceutical Marketing Europe

3rd July 2008

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