David's New Book

Tuesday, March 20, 2012

ANTIBIOTIC MARKETS AND SPLU - GUEST BLOGGER – LEW BARRETT

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The Neonatal Intensive Care Unit.The Neonatal Intensive Care Unit. (Photo credit: Wikipedia)

Lew Barrett is an old friend and colleague of mine from Wyeth.  He was the VP of US Infectious Diseases Marketing when I was there and as such we worked together closely for a number of years. Lew then assumed the role of VP US Marketing and Global Business Manager Infectious Diseases at Wyeth. Lew was, in large part, responsible for the surge in Pip-tazo sales to over $1B.  I asked Lew to help us understand the market implications for the Special Population, Limited Use (SPLU) proposal of the Infectious Diseases Society of America.


I thank David Shlaes for the invitation to share my thoughts regarding the commercial viability of anti-infective drug development in light of recent discussions and pronouncements at FDA and in Congress.  Lots of acronyms, Bills and ideas have been submitted recently in the U.S. to stimulate drug development and approvals: GAIN, SPLUs FAST and TREAT just to name a few. 
Most recently, the concept of SPLU approvals has been discussed.   The hope is that trial design, numbers of patients and time might be reduced.  The approved uses: narrow and limited.  One wonders however how small is small and how fast is fast.  In a paper recently published in Clinical Infectious Diseases [Vol. 54, No. 5, 1 March 2012, Linezolid was compared with vancomycin for the treatment of MRSA nosocomial pneumonia.  The study took over 5 years to complete.  1225 patients were randomized to study 448 MRSA pneumonia patients.  Finding resistant pathogens in clinical studies is tough!  Can I say rapid bedside diagnostics?

So assuming a SPLU’s come to pass what are they worth?  Professional forecasters beware, I am conducting a rough and dirty analysis, but directionally I think it makes sense.
Data Sources:  1.  Decision Resources has published several syndicated studies over the last year.  Their data provides us useful epidemiology insights.  Thanks to several colleagues for help with this information.  2.  T.E.S.T. (Tigecycline Evaluation and Surveillance Trial) http://testsurveillance.com/ is a global multi-center surveillance study designed to assess the in vitro activity of tigecycline and comparators against a range of important pathogens.  Thanks to IHMA and the TEST team for fact checking my analysis.  I used Decision Resources to provide patient numbers, T.E.S.T. to identify % MDR.
My example:
SPLU drug approved for MDR Acinetobacter in the U.S.1
Infection
Number of US Patients infected with Acinetobacter
HealthCare Assoc. pneumonia
18,500
Nosocomial pneumonia
11,900
Ventilator-Assoc. pneumonia
13,900
UTI
36,500
Blood stream infection
12,000
Complicated skin+Surgical Site infection
202,200
Total Acinetobacter patients
295,000

295,000 Acinetobacter spp. patients.  How many fit the SPLU definition?  Using T.E.S.T.2, I calculated the number of MDR Acinetobacter.  My definition:  any isolate resistant to at least 3 classes of antibiotics.  I used:  3G/4G cephalosporins, carbapenems, fluoroquinolones, beta-lactam/beta-lactamase inhibitors and aminoglycosides.  Unfortunately neither colistin nor tigecycline is evaluated.  Colistin because it was not tested, tigecycline because TEST is a Pfizer study and tigecycline is not indicated for nor has any breakpoints for Acinetobacter .  This is a limitation of the analysis. 
I limited Acinetobacter to strains isolated from the urine/bladder, lung, complicated skin/surgical sites, and blood in an attempt to mimic the Decision Resources data.
35% of U.S. Acinetobacter were resistant to at least 3-classes of antibiotics.  
SPLU defined Acinetobacter patients:  103,000 (295,000x32%).
Assuming 100% market share of 103,000 patients for our new drug (not happening):
$100/day x 14 days = $1,400 course of therapy:  $144MM
$350/day x 14 days = $4,900 course of therapy:  $505MM
$700/day x 14 days = $9,800 course of therapy:  $1.0BWhat share of patients is likely?  The limited indication itself, stewardship programs, ID restrictions will all reduce share.  Colistin, tigecycline, combinations of agents and other new drugs (I hope) will also reduce share.  I leave it to each reader to decide what is appropriate, however a generous 50% market share reduces the annual revenue stream to between $72 and $500 million dollars. 
What about a more prevalent pathogen you may ask.  By comparison, 524,000 Pseudomonas aeruginosa infected patients were reported by Decision Resources.  The MDR rate, per T.E.S.T. is 10%.  So we are talking about even fewer MDR P aeruginosa patients, 54,000.    

What about spillover sales or off-label sales.  My personal belief is that price, stewardship programs, formulary restrictions, the label itself and external oversight will limit extraneous use.  Oversight from payors on the hospital side and the government on industry’s side, especially for a new regulatory approval process, is likely.   HHS, OIG, and federal and state attorneys general have been scrutinizing manufacturer’s commercial activities.  One only has to look at fines assessed against Forest, Pfizer, most recently J&J,  and others for marketing activities to verify my point.  J&J’s fines for marketing activities are in the final stages of negotiation. 

Lastly, what happens when an SPLU approval is broadened based on required post-approval studies?  If no new agents are approved to treat the original MDR problem, I suspect that formularies will keep the clamps on use, regardless of any price changes by the manufacturer.  So if the use is going to be constrained I suspect that the price will remain high.  
In summary, SPLU approvals appear intriguing. I believe that SPLU qualifying antibiotics will need oncology-like pricing to be attractive to any sponsor; small pharma, VCs or big-Pharma. If combined with extensions to exclusivity and/or tax credits even more so.  But, SPLU approvals may be more attractive to small or start-up companies versus big pharma.  Big Pharma still has the issue of resource allocation across various projects; a faster, limited approval may not meet the threshold for investment in the big pharma portfolios.

1.    Decision Resources:  Hospital Treated Infections, November 2011.
2.    T.E.S.T.  Tigecycline Evaluation and Surveillance Trial.  Data run 16March2012.

Lewis Barrett, President & Owner
LLBarrett Biopharmaceutical Consulting, LLC

LL Barrett Biopharmaceutical Consulting provides strategic consultation to the global life sciences field with a particular focus on brand strategy (positioning, differentiation, global branding and access); lifecycle strategy, business development, and strategic communications. Mr. Barrett has a breadth and depth of experience in the anti-infective, hospital and biopharma fields.



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