Lilly Overtakes Pfizer as Biggest DTC Advertising Spender!

According to cegedim Strategic Data, Lilly overtook Pfizer in total direct-to-consumer (DTC) spending in April, 2012. The chart below shows the top 10 DTC spenders between July 2011 and April 2012.

Pfizer spent nearly $900 million in DTC advertising in 2011. $220 million of that was for Lipitor. I predicted that Lipitor would hold the "Key to DTC Ad Spending in 2012" (see here) and this chart proves it.

Lilly's Cymbalta and Cialis were the #2 and #3 highest in DTC ad spending in 2011. It looks like they will be #1 and #2 in 2012.

New Pharma Business Model: Prizes, Not Patents, for Innovative Drugs

A BMJ articled titled "Pharmaceutical research and development: what do we get for all that money?" was roundly criticized by Rich Meyer of World of DTC Marketing blog and Derek Lowe of In the Pipeline blog. Both have both ripped into the central premise of the BMJ article; specifically critiquing these statements made by the authors: (1) the "widely touted innovation crisis in pharmaceuticals is a myth" and (2) for every dollar pharmaceutical companies spend on "basic research, $19 goes toward promotion and marketing."

Meyer (here) tackles #2 using data from Lilly (ie, see this chart embedded below), whereas Derek tackles #1 (here).

Source: worldofdtcmarketing.com via Pharma on Pinterest

Everyone fools around with the numbers to reach their desired pre-ordained conclusions. I have blogged about this many times. First, I wrote about differing estimates of pharma's expenditures on total marketing, not just direct-to-consumer (DTC) spending, which was used to create the above chart of dollars spent on advertising vs. sales. I've also compared this to how much the industry spends on research (see, for example, "Promotion vs. R&Deja vu all over again!").

My conclusion: The drug industry spends approximately the same on marketing as it does on research. So, can't we all agree to that and just get along?

If you actually read the BMJ article, you might be surprised to learn that the authors' goal seems to be to promote a NEW business model for the pharmaceutical industry:

"We should consider new ways of rewarding [drug industry] innovation directly, such as through the large cash prizes envisioned in US Senate Bill 1137, rather than through the high prices generated by patent protection," said the authors.

I was intrigued to learn that a US Senate Bill has been proposed -- although long tabled -- that actually seriously proposed getting rid of patent protection for new drugs as an incentive for innovation. Here's how the BMJ authors describe what SB 1137 proposes:

"The bill proposes the collection of several billion dollars a year from all federal and non-federal health reimbursement and insurance programmes, and a committee would award prizes in proportion to how well new drugs fulfilled unmet clinical needs and constituted real therapeutic gains. Without patents new drugs are immediately open to generic competition, lowering prices, while at the same time innovators are rewarded quickly to innovate again."

The authors assure us that the approach advocated by SB 1137 "would save countries billions in healthcare costs and produce real gains in people’s health."

Maybe so, but I seriously doubt that prizes awarded by a government committee (ie, "Board of Trustees for the Fund for Medical Innovation Prizes") would be more effective than the profit motive or less prone to corruption than the industry's cozy relationship with the FDA (ie, drug industry "users fees" directly cover the majority of FDA's drug approval expenses).

SB 1137 also calls for 5 percent of the prize rewards fund (ie, 5% of about $80 BILLION or about $4 billion -- the approximate amount pharma spends each year on DTC advertising) to be distributed to those who "provide open access to knowledge, data, materials, and technologies." The bill claims that such "new open source business models... will induce greater access to useful knowledge, data, materials, and technologies."

That's interesting because I recently talked to people at Lilly -- not the same people who created the above chart -- about an "open access" project they are launching for innovative pharma research (see "Crowd Sourced Creative Commons Drug Information").

War on Counterfeit/Illegal Drugs Hobbled by Same Demons as Real War

Pfizer Intelligence Uncovers $200 of Counterfeit Viagra In Manila Raid!

"Armed with a tip from pharmaceutical company Pfizer Inc., several dozen government investigators carried out a series of rapid fire raids one day last month on what were supposed to be the key suppliers of counterfeit drugs in the city [Manila]," reports the Wall Street Journal (read the story here).

"The net result of the raids, touted beforehand as likely to be one of the largest counterfeit drug busts in the city this year, was $200 worth of fake Viagra, Pfizer's erectile-dysfunction drug."

This intelligence gaffe reminds me of the Bush-era Iraqi weapons of mass destruction intelligence gaffe that propelled us to war in Iraq. I'm wondering if the "war on counterfeit drugs" is similarly based on faulty intelligence?

Another similarity between these two types of war is the unbridled optimism expressed by those in charge. "I think we are making a dent in the problem, but it's a slow process," said Scott Davis, senior director for global security in the Asia Pacific for Pfizer and a former special agent for U.S. Customs. Smells or sounds like victory, but it's no where near actual victory.

Here's yet another analogy: the war on counterfeit (or illegal) drugs seems to be as hobbled by rampant corruption of officials as is the war in Afganistan (or Iraq). In the case of the Manila raid, an owner of a couple of the target warehouses "bragged that he knew the NBI's [the Philippine's National Bureau of Investigation; i.e., the country's FBI] lead investigator on the counterfeit drug case and the deputy director who authorized the raid." After the raid turned up practically nothing, "the owner and the government agents walked a block away to lunch at Maxim's Tea House, a Chinese restaurant, according to people close to the investigation." That lunch probably cost more than $200!

It was interesting that the raiders found what they thought was counterfeit Cialis -- an ED drug marketed by Eli Lilly. Unfortunately, they did not have a search warrant for that illegal product, so no one was arrested.

It appears that Pfizer and Lilly did not share their intelligence data in this case, otherwise the NBI could have had a more inclusive search warrant.

This begs the question: Is the drug industry working together as allies in the war on counterfeit/illegal drugs? Are they sharing intelligence? Or is this also "proprietary" information that each company wants to keep close to its vest?

OMG, LCOI! Open Source Pharma: Creative Commons Coming To Pharma

I had an interesting phone conversation yesterday with Jerry Matczak, Community Manager, Lilly Clinical Open Innovation, Eli Lilly and Company. Yes, "Open" and "Innovation" together in the same phrase from a pharmaceutical company - OMG! LCOI is the acronym for Lilly Clinical Open Innovation, a venture that Lilly hopes "can transform clinical research and development." How will they achieve this? "We look to engage in the open for insight, innovation, talent and wisdom to drive new capabilities to fight disease and meet patient needs." There it is again, "open" and "innovation" in the same sentence.

The devil is in the details and I hope to interview Mr. Matczak soon on my Pharma Marketing Talk show.

It's was a happy coincidence that my conversation with Matczak followed yesterday's show about "Pharma Wikipedians: The Pros and Cons of Pharma Employees Editing Wikipedia Articles" (use the playback widget below to listen to that podcast).

Listen to internet radio with Pharmaguy on Blog Talk Radio

An even happier "coincidence" was an audio commentary from my friend Brad Pendergraph (@bradatpharma), former Senior Manager, Consumer Digital and Social Engagement at Novartis, in response to a question raised during my show.

Brad posted his commentary to Audioboo, which is "a simple way of recording audio while on the move and adding as much useful data to it as possible, such as photos, tags and location." Audioboo is the audio equivalent of Twitter -- you can record as many 3-minute audio messages from your smartphone as you like. I signed up immediately so that I can post Auioboo comments while on the road at drug industry conferences.

In his audio commentary, Brad touched upon how pharma deals with proprietary information. "Is pharma really going to let some of its information 'go general'?," Brad asked. He mentioned "creative commons" and "taking a look at what material you [pharma] have and figuring out how you can distribute it to people in the social media space in ways that they can understand and work with that are still compliant." Brad was suggesting pharma use creative commons rather than the more restrictive copyright when distributing information. Listen to his comments using this Audioboo playback widget:

listen to ‘A quick response to a question raised during @pharmaguy blog talk on Wikipedia.’ on Audioboo

Meanwhile, back at LCOI, here's their take on "open Innovation" published on the LCOI website (here):

There’s plenty of evidence that drug development is broken. The estimated efficacy rate of drugs for many common illnesses comes in at 50% or below, and a recent Forbes article by Matt Herper suggests the cost of bringing a new drug to patients is twice the already-big-number commonly used – over $4 billion per drug.

Patients need better.

The Lilly Clinical Open Innovation team exists to make it better. We believe that Open Innovation models – focused on clinical drug development – can result in transformational gains in value-to-patients and efficiency.

We also believe that open data, linked, crowdsourced, consumed and curated by experts outside (as well as inside) the walls of pharma will bring innovative insights and wisdom. And that open communities will set and meet objectives to reduce costs and improve outcomes.

We’ll explore challenge driven innovation and gamification to tap into expertise which might otherwise be missed. We embrace open source development to maximize technical contribution and benefit, and will Work Out Loud to assure transparency on our projects. To manage rights in a distributed digital age we leverage Creative Commons licensing. In the open, with no strings attached.
That’s a lot of buzzwords, and even more to actually try to do. Too much for the smallish Lilly COI group for sure – but that’s kind of the point. Open Innovation promises that we can all play bigger than we are, and enables greater innovation than any individual or organization can accomplish on it’s own.

Keep tuned for an announcement of an upcoming show where I will interview Jerry and Brad about "Open Source Pharma."

Positive or Not, Pediatric Drug Trials Pay Off: Cymbalta and Oxycontin Case Studies

Very few people may know that drug companies can get an additional six months of market exclusivity from FDA as an inducement for them to study the efficacy and safety of drugs in children. Fewer people realize that no matter what the outcome of such tests, FDA will still grant the additional 6 months of exclusivity before generic copies of the tested drug can be introduced.

A case in point is Cymbalta, an antidepressant marketed by Lilly.

As reported in the Wall Street Journal (here), Cymbalta will have an additional six months of U.S. market exclusivity -- through December 2013 -- because the company studied the drug's effects on children. "Lilly said, however, that it won't seek regulatory approval to market Cymbalta for pediatric use because study results were inconclusive regarding Cymbalta's efficacy in children."

Cymbalta is the "duct tape" of drugs; i.e., it has many approved indications for use in adults.

Cymbalta was originally approved in 2004 for adults with major depression. Later the FDA granted Lilly approval to market Cymbalta for treating nerve pain in diabetics, GAD (ie, "generalized anxiety disorder"; see "eGAD! How I Learned to Stop Worrying and Love Cymbalta!") and fibromyalgia, a condition characterized by chronic fatigue and muscle and joint pain.

With each new indication comes the potential to increase sales significantly. In 2010, for example, Cymbalta was approved for chronic lower back and knee pain, an indication that may have increased sales by $500 Million, a 16% increase over the $3.07 Bn in sales for Cymbalta in 2009 (read, for example, "Cymbalta: A Sweet ROI for Chronic Pain Indication").

But a 16% increase in sales is paltry compared with a 50% increase in sales that is possible when the FDA approves a drug for use in children under the Best Pharmaceuticals for Children Act, a statute that created the incentive for drug makers to test the products in young patients. For Lilly, a 6-month extension of market exclusivity for Cymbalta could give Lilly more than a $2 Billion windfall (in April, 2012, Lilly reported that first-quarter sales of Cymbalta rose 23% to $1.11 billion).

I'm sure the intent of the law was to make it possible for physicians to prescribe drugs for children based on evidence that the drugs worked in children. To offset the cost to drug companies to run trails to prove efficacy, Congress allowed 6 months of additional exclusivity during which those costs could be recouped. In the case of Cymbalta, children do not benefit and Lilly more than recoups the cost of pediatric trials, which involve perhaps only a few hundred subjects.

Purdue Pharma, however, claimed it lacked resources in 2004 when it abandoned a pediatric Oxycontin clinical trial requested by the FDA. Only now -- when Oxycontin is a mere year away from losing market exclusivity -- is Purdue pursing such a trial (see "After Delay, OxyContin’s Use in Young Is Under Study"). Sales of Oxycontin reached $1.7 billion (in the U.S.?) in 2004.

It is too soon to know if the Oxycontin pediatric trial will demonstrate any effectiveness in treating children under 12. One thing that is certain, however, is that street use of Oxycontin by children and young adults is deadly. If extended market exclusivity can help prevent illegal diversion of even cheaper generic versions of Oxycontin, then I am all for it no matter what the clinical trail results!