Wednesday, September 18, 2013
So, what does the recent CDC report on antibiotic resistance have to do with big pharma? The optimistic response is that large companies will sit up and take notice. They will put this information together with all the other things going on including regulatory reform and discussions of value-based pricing and make the right decision – to get back in or to continue with antibiotic R&D programs. But the cynic in me sees a continued disconnect between the growing public health crisis noted by the CDC and the marketing groups of large pharmaceutical companies.
Marketers in large pharmaceutical companies are generally cautious types. They don’t like supporting efforts that might not actually make the return on investment that the marketers predict. The marketers are also caught in between the reality of a severe and growing medical need (antibiotic resistant infections) and the requirement of their bosses to provide $500 million in peak year sales or some minimum net present value for any product. The easiest way out, then, for both large pharma executives and for marketing folks is just to say no and blame everything and everyone but themselves for the fact that antibiotics are not good money-makers.
The problem with this thinking is that it is illusory. It has become just a poor excuse to say no. Marketers quote numbers showing the decreasing value of individual branded products over time – entirely due to generic intrusion. Surprise! But if you look either at individual products prior to generic intrusion or the dollar volume of the market for branded products, you will come to the opposite conclusion. A great example is Cubist’s Cubicin or daptomycin. Here is a product sailing along towards $1B is sales based 95% on US sales where the product seems poorly differentiated from its main generic competition, vancomycin. Why? How? If this product were presented today at an early stage of development to most large pharma marketing people – their response would clearly be no. How about Zyvox – a well differentiated product offering the only oral therapy for MRSA infections (or at least for the older hospital strains)? It garnered sales of $1.6 B at its peak based not on prescription volume, but based on a very high price – the highest of any antibiotic. Then there are the objections that new antibiotics are reserved to preserve their utility. Yes – carbapenems were the most reserved antibiotics in history (perhaps until Zyvox), but two of them sold between $500MM and $1B each in spite of their reserved status. OK – these products are not Lipitor that sold $15-20B at peak – but how many lipitors are there out there?
Focusing on the dollar volume market, I carried out a 25 year retrospective study when I was at Wyeth looking at the effect of generic antibiotic approvals on the dollar volume of the overall antibiotic market. Guess what! Essentially there was NO EFFECT! Why? Nobody promotes generics. And generics get overcome by new, branded and better-differentiated (or not) products like Cubicin and Zyvox. The global antibiotic market has actually been growing– which is amazing since there have been so few new market entries to compensate for ongoing generic intrusion. This is because of the growing middle class populations in countries like China, India, Russia, Chile and others that can suddenly afford to pay for high quality branded products. So – if we can get new, differentiated, branded products to the market, their market potential should be higher than ever IF we can figure out how to manage these emerging markets without going to jail.
The argument currently raging within large pharma marketing groups is, for a product designed to treat these life-threatening resistant infections where the patient numbers are very small – what price can they realistically charge? The CDC report points out that, in the US alone, there are over 2 million (as in million!) infections acquired by hospitalized patients every year during their hospital stay. Of these, at least 23,000 will die directly from their antibiotic resistant infection. An additional 250,000 patients will get infected by C. difficile and 14,000 of these will die. According to the CDC, the direct additional healthcare costs to the US due to these resistant infections could be as high as $20 billion and the additional costs of lost productivity could be as high as an additional $35 billion annually. So – marketers and payers – think value based pricing.
But really – what more can we do to convince the marketing groups in large companies that antibiotics make good business sense? Should we send them to large hospitals and let them see physicians struggling to save patients from resistant infections? Or should we just say no, fire them all, and start over?
Monday, September 9, 2013
This topic keeps coming up. I hear about it during the planning stages of clinical trials, from fellow ID clinicians who want to avoid broad spectrum empiric therapy or to de-escalate from such quickly in order to reduce resistance, and, occasionally, from small companies peddling rapid diagnostics. The Infectious Diseases Society and FDA held a workshop on the topic a few years ago. We heard about nucleic acid based approaches, rapid serology, rapid this and that. There were three key problems that were raised. First, the regulatory path in the US is anything but straightforward – especially if you wanted to link a diagnostic with an antibiotic (but why would we do that?). Second, industry is not interested (at least in the US) because (a) the regulatory hurdles are high and (b) they are skeptical that they would ever make a return on their investment (the situation is different in Europe where the regulatory approach to diagnostics is easier and therefore so is the return on investment). But, most importantly, at least to me, rapid diagnostics are not rapid – far from it – again – especially in the US. What am I talking about? FDA requirements? Technological barriers? Nope.
I’m talking about the rope a dope system currently in place in US hospital laboratories and on hospital wards in the US. To understand this, you have to take a trip with me down memory lane. When I was training as a medical student at the county hospital in Cleveland, we were expected to have done all the appropriate diagnostic tests ourselves on the patient to rule out or in the most likely diagnoses on our list of differential diagnoses by the morning after admission. That meant – all appropriate specimens collected, Gram stains performed and read and cultures plated – by us! We even had to collect and stain bone marrow specimens if the patient had new anemia. The infectious diseases service would come by in the afternoon the next day and review our Gram stains with us. They would also check our culture plates (which had been incubating in an incubator adjacent to the ward) overnight and they would point out colonies and help interpret the cultures immediately. Of course, those were the days when infectious diseases fellows were expected to be able to read Gram stains and interpret growing cultures of microorganisms from patient specimens.
Those days, unfortunately in my view, are long gone. Law suits and the federal government have seen to that. The Clinical Laboratory Improvement Amendments (CLIA) law was passed in 1988. Under this law, only certified laboratories and laboratorians are allowed to report clinical laboratory results in the US. This law was supported by hospitals desiring to limit lawsuits, but laboratory workers trying to protect their jobs and by patient advocates thinking that this would mean better care. This meant that our county hospital in Cleveland had to remove all the laboratories they had carefully constructed adjacent to each patient ward. Physicians could still see Gram stains and cultures, but only if they did so in the official clinical laboratory – and their interpretations could not become part of the patient record. Logistically, what does this mean? A specimen is collected from the patient by the physician, nurse or technician, and is placed in an outbox on the ward. The specimen then has to be transported to a laboratory – which may or may not be on site in the same hospital where the patient is located. On arrival in the laboratory, the specimen is labeled and entered into some tracking system by someone – then, eventually, is processed. Is the lab open 7/7 24/24? Most are not. When I was training – I (or someone) was definitely available 7/7 and 24/24. Once the specimen is processed – if there is a rapid test available in the laboratory – that test could be performed and the results reported to the caregiver. But you get the idea. Even the most rapid of tests that can be completed within say 3 hours usually take at a minimum 8 hours and, overnight – 12 hours and, over a weekend – who knows how long?
So our biggest challenge is ourselves! Our hospital bureaucracy, the laboratory workers and