The $400 Million bapi Drug Failure: Are Patient Advocates the Scapegoat?

"Few people in pharma or the investment community were surprised at bapineuzumab's failure, as most odds makers put its chances for success at approximately 25 percent," said Daniel R. Hoffman, Ph.D., in a post to the Philadelphia Inquirer Check Up blog (see "Choosing between baldfaced political lies and Pharma's half-truths").

Bapineuzumab is an experimental drug for the treatment of Alzheimer's Disease (see "Pfizer and Janssen Halt Alzheimer Drug Development: Why Not Try Gamification?").

"But why do pharmas advance poor prospects to expensive, Phase 3 testing and throw half a billion dollars of shareholder money out the window in the process?"

The former head of Pfizer's R&D, John LaMattina, offered the following as a possible answer:

“Perhaps the answer lies the fact that there were groups of stakeholders who desperately wanted bapi to advance. AD [Alzheimer's Disease] patient advocacy groups would top the list. These people, who are doing their utmost to help find any treatment for this disease, would have been outraged had bapi been dropped at phase 2. Furthermore, their concerns would have been supported by leading experts in the field. Back in 2008, many of the leading experts in AD strongly believed in the science behind bapi and they would have been quite negative about ending the bapi program. Finally, dropping bapi would have caused public relations damage. Imagine the headlines: ‘Big Rich Pharma Companies Dump Promising Drug For AD. Patients, Scientists Crushed.’"

LaMattina says that he "had no part in the bapi discussions," but he suspects that Wyeth/J&J "knew that bapi had less than a 50-50 chance to succeed" and he agrees that it was a $400 million dollar gamble.

Obviously, LaMattina is just speculating on the role that Alzheimer patient advocates may have had on the decision to proceed with the phase 3 trials of bapi. But I seriously doubt that the "deciders" were worried about bad publicity if they refused to take the gamble. Drug companies, after all, pay corporate communications professionals big bucks to favorably "spin" bad news.

"Patient advocacy groups can exert some effect," said Hoffman, "but basically they stand several rungs down the influence ladder from the greed, ego and similar motives of senior executives. The area where patient advocacy groups scream the loudest concerns the exorbitant pricing of drugs for their respective therapeutic areas. Yet pharmas seldom let these plaintive cries influence their inexorable price increases. Certainly the patient groups didn't deter pharma's industry-wide strategy of pricing as many new products as possible at the vastly higher level of biologicals and, for some, even into the orphan drug stratosphere."

True that!

Dr. Hoffman complains of "half-truths and misdirecting statements that pharma's cheerleaders now communicate regularly" when referring to LaMattina's analysis. LaMattina, said Hoffman, "didn't place even a smidgeon of responsibility at the feet of fiduciary officers and senior R&D people who receive bonuses based upon the number of compounds they advance to Phase 3. Nor did he state that C-suite people uniformly believe they look better to shareholders by throwing a Hail Mary pass against a stacked secondary, rather than limiting their losses by punting the ball."

Football: Another reference to games! See my post cited above.

Obviously, drug development is a risky business - high risk vs. high reward. These days, however, the rewards are less "stratospheric" than they used to be.

Instead of looking for scapegoats -- whether they be patient advocates or C-suite football quarterback wanabees -- we should talk about the broken pharma business model and how to change it to be less risky. A guest Forbes post by Christopher Bowe, the US Healthcare Analyst at Informa Scrip, addresses this issue in his analyis of the bapi failure:

"To save itself - and save more patients - the industry should take two vital steps: develop a more flexible approach to drug approval and patent exclusivity and change its business model to encourage more scientific collaboration among companies," said Bowe. "The first change is relatively closer to our grasp; the second requires a sea change in the industry" (see "Big Pharma Failures Light the Way to Change").

On that note, I invite you to read this Pharma Marketing News article: "Crowd Sourced Creative Commons Drug Information" (subscription required) and/or this Pharma Marketing Blog post: "OMG, LCOI! Open Source Pharma: Creative Commons Coming To Pharma."

An open crowd-sourced approach to pharmaceutical research is not a hairbrained idea. An article in today's Wall Street Journal describes how the U.S. military is using crowdsourcing to design a new amphibious vehicle for the Marines (see "Tapping Crowds for Military Design"; subscription required). "The Defense Advanced Research Projects Agency, known as Darpa, is preparing to assess whether crowdsourcing, a freewheeling collaborative method sometimes used to develop software, can be an effective means of designing military equipment."

IMHO, if the military can handle open source data sharing without revealing secrets, so can the pharmaceutical industry.

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").

Days of Live Pharma Reps are Numbered: M&A's and Outsourcing - the "Bain/Bane" of the U.S. Pharma Industry

Last night, my sons and I attended a NJ BioPharma Networking Group (NJBPNG) meetup at the Princeton Sports Bar and Grille. NJBPNG is an ad hoc LikedIn group, which you can join (here).

This group is mostly comprised of senior pharmaceutical executives in the research side of the drug industry (click on infographic on the right for more NJBPNG demographics).

It was a good night out with my sons, but not so upbeat for most of the people I met there, many of whom are out of work -- including PhDs, organic chemists, and project  managers.

When meeting new people I usually ask "What do you do?" The most frequent answer I received last night was "I'm in transition," which is one of those "Awkward Euphemisms" for out of work and looking for a job (see other euphemisms listed by Michael Spiro, a professional recruiter, on his blog here).

When I asked "Why?", the response was either mergers and acquisitions or outsourcing, which, I note, was the specialty of Bain Capital in its glory years. Sorry, I just had to throw in a Romney reference and relate "Bain" to "Bane" (i.e., the super-villain nemesis of Batman).

Seriously, outsourcing in the pharmaceutical industry is on the rise. Clinical research is being outsourced to countries like India, and China. Basic research is also being outsourced to startup companies and academia and maybe even overseas.

I also met a few people who are doing very well, thank you. One was the owner of a sales outsourcing agency that specializes in non-personal pharma sales and marketing; i.e., sales calls done by phone via a call center.

"This year has been my best year ever," said this person. He's been doing this for several years. In fact, his prediction for the future of live sales reps is dire: "they will disappear."

Frankly, I had hoped that my son -- a recent Penn State Smeal College of Business graduate -- would make some connections at the meetup that could help him find a job. He doesn't have any pharmaceutical experience, which is what a young recruiter attendee was looking for. Perhaps my son should become a recruiter -- if you aren't qualified for a job, maybe the next best thing is finding a qualified person.

But we learned of one job that my son IS qualified for: one of those people on the phone at the call center mentioned above. It turns out that this is a low-paying, entry-level job paying about $20 per hour. You don't have to be a nurse or former pharma sales rep. In fact, such people are over qualified for this sort of non-personal sales and marketing.

Just like young, entry-level commercial airline pilots bunk together in small apartment nearby airport hubs, young call center employees relocate near the call center and share low-rent apartments. Sounds like Penn State to me!

What advice should I give my son? Should he apply for a job at the call center?

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."

EU's EMA Plans to Open Up Proprietary Drug Trial Data to Outside Investigators

European Medicines Agency (EMA) -- the European drug regulator -- "is opening its data vaults to systematic scrutiny in a move that will let independent researchers trawl through millions of pages of clinical trial information," according to Reuters news (here).

This is big news depending on how EMA makes these large data sets available to outside investigators and which investigators are granted access. Reuters reports that the agency will host a conference in November to determine who has access to what and how fast. As I always said of the FDA, if an agency wants to delay something, its best bet is to hold a meeting to discuss it or sponsor research to study it.

The drug industry has long argued that the clinical data it presents to the FDA and other regulators as part of the drug approval process is proprietary -- ie, closely guarded trade secrets. But critics contend that important safety data about drugs is hidden from outside investigators and the data is critical for maintaining public health.

"It will make a huge difference to public health," said Peter Gotzsche, director of the nonprofit Nordic Cochrane Centre in Denmark, which carries out systematic healthcare reviews. "The pharmaceutical industry routinely exaggerates the benefits of its drugs and plays down the harms or hides them. By getting access to material held by drug regulators we may discover that many drugs are less effective than we thought they were and also more harmful."

In 2011, Gotzsche wrote paper titled "Why we need easy access to all data from all clinical trials and how to accomplish it." In it, he said "Calls for data sharing have mostly been restricted to publicly-funded research, but I argue that the distinction between publicly-funded and industry-funded research is an artificial and irrelevant one, as the interests of the patients must override commercial interests" (find the full text here: "Call for Easy Access to ALL Clinical Trial Data").

A case in point is Vioxx, whose harmful side effects once were secrets known only to Merck and the FDA.

"Europe used to be behind the FDA in terms of openness and transparency but now Europe is ahead," Gotzsche said. Will the FDA ever follow EMA's lead?

I doubt it. FDA has been very gun shy of the pharmaceutical industry, which pays over 60% of the agency's budget for approving drugs. Also, the drug industry has no qualms about taking the FDA to court to defend itself. Usually, the FDA is sued by pharma for limiting the industry's First Amendment right to free and open speech. In this case, however, the industry would argue that FDA has no right itself to "speak" freely about clinical data provided to it by drug companies.

UPDATE (7/16/2012): While the EU plans to provide access to "confidential" clinical trial data, the FDA is prohibited by LAW to do so. The Wall Street Journal reports that the FDA is monitoring some of its own employees who are suspected of leaking confidential medical device data to the press (read about this here).