A shingles vaccines and biologic generics
There's been a lot in the news about vaccines. Cervical cancer vaccines, avian flu vaccines, vaccines for ear infections. Now Merck has another new vaccine that has just been approved by the FDA to treat shingles in people age 60 and over. Shingles is typically treated with Valtrex or another antiviral once it flares up. Zostavax, though, keeps the virus from flaring up before it happens, and it is the only pharmaceutical capable of doing so.
This is just the latest trend in a newly-rekindled vaccination industry. Turns out there's money in vaccines after all.
But analysts reckon the vaccine market will grow much faster than the market for prescription drugs. "We're in a period where pharmaceutical sales are growing at 5% to 6% a year," says Novartis Chief Executive Daniel Vasella. "In contrast, the vaccine industry is looking at nearly 20% annual growth over the next five years."
Teva's potential windfalls: Cozaar and Zocor
Teva (probably) has a lot of money coming their way. The Israeli company announced Sunday that they had won tentative approval from the FDA for their generic form of Cozaar (losartan). They're also looking to begin selling their generic form of Zocor (simvastatin) in the upcoming weeks. The two brand-name drugs — both of them made by Merck — accounted for some $6.2 billion in US sales in 2004.
Teva will not be able to sell their generic Cozaar until April 2010, when Merck's patent expires, but they are the first to get this FDA Good Housekeeping Seal of Approval, so it looks like they're going to get that six-month lock on sales of the generic forms of the drug provided Merck doesn't do some wheeling-and-dealing. Predicting what Merck will do in 2010 is impossible: will they have a successor to Cozaar by then? Will Cozaar even be a super-profitable at that time? These are the biggest two questions that will determine whether Merck will buy themselves that extra six months when the time comes.
It also looks like Teva will have the six month monopoly on generic Zocor starting June 23. There are some unknowns — while Teva will start out with the exclusive lock on the US market, the market could be opened earlier than that pending the results of a lawsuit filed by the company against the FDA. Teva filed suit after the agency denied them their six month monopoly — I am not sure what the FDA's rationale was, but it seems to be violation of the Hatch-Waxman Act, and the FDA's appeal will probably get shot down, leaving Teva the winner.
[tags]Medicine, pharmacy, Teva, Merck, Cozaar, losartan, Zocor, simvastatin[/tags]
"Personalized" medicine for 1.3 billion people
AstraZeneca (AZ) has plans to dump $100 million into a new research facility in China. By itself, $100 million sounds like quite a bit, however that figure only represents about 3% of its 2005 R&D budget, and the payoff from such a move could be many multiples of that number. While the cost of living is much lower in China, and its hybrid communist-capitalist market makes drug pricing uncertain, AZ could stand to make money by the bucketloads simply because China's population is so huge. What makes this move of particular interest is that AZ is planning on using the differences in Chinese biology to its advantage.
While it's nice to think that we're all the same, and that differences in genetics are purely superficial, these variations have big implications for medicine and therapeutics. The most popular ethnically-targeted drug is of course the not-so-popular BiDil, the first drug approved by the FDA to treat a specific ethnic group. AstraZeneca hopes to capitalize on a much bigger market: the Chinese and by extension, other Asian races The shift was probably inspired by the failure of its cancer drug, Iressa, which shows greater efficacy in Asians than it does in Caucasians.*
Uncertainty over inhaled insulin
The Motley Fool has an article about Nektar Therapeutics, specifically about their inhaled insulin formulation, Exubera. The author, Stephen Simpson, seems to think that Exubera might not pay off as well as most industry types think it will. While it's true that trying something so radically new as inhaled insulin is somewhat risky, the potential for such a drug is enormous, particularly given that it allows something so basic and appealing as allowing people to stop sticking themselves with needles. I appreciate Mr. Simpson's caution, but I think that Exubera is going to be a big hit. Granted, it is unknown whether the major pharmacy benefit managers (PBMs) will cover Exubera, but many other expensive "lifestyle" drugs are often not covered, but they can still do quite well. Caremark seems to allude to the fact that they might cover it (PDF), but Express Scripts, on the other hand, makes no mention of it. Express, does however, tell us that they "never recommend switching from a lower-priced drug to a higher-priced drug" which is no surprise to anyone. What will drive insurers to cover it will be demand: a patient gets a coupon from their doctor for a free inhaler and they find they like it much better than injecting themselves every couple of hours, so they jump ship to another PBM that does cover it.
Of course this is a moot point for those at higher risk for respiratory issues (asthma sufferers, smokers, etc.) as they will be excluded from using Exubera entirely. Standard disclaimers also recommended that healthy patients have their lung function tested every six months just to be safe.
Were I in a position to purchase more stock, I would definitely consider adding Nektar to my list of companies to watch. They spent a ton of money on developing the system that allows insulin to be inhaled — Forbes has a great article on its engineering backstory — and if (when) it goes big this will have been money well-spent on their part. And if not, Nektar still has their process that it could license to other big pharmaceutical companies — or even other industries, aerospace, for instance — provided it hasn't sold its soul to Pfizer.
[tags]Medicine, pharmacy, Exubera, Nektar Therapeutics, inhaled insulin, diabetes, insulin, Pfizer[/tags]
Managing medicine: when more is less
Everyone's heard the expressions "Less is more" and "simplicity is best." These phrases make good conversation fillers, but now lack any real meaning as they have become trite through overuse. This is unfortunate. In just about any business, simplicity is always better. Less usually is actually more, provided there's a good design and interface to back up a given product. Now, it seems, medicine is coming into line with these same theoretical views.
Fisher originally expected to find that people in areas with more healthcare would be healthier and longer-lived. The opposite was true. "If anything, it looks like there is a substantially increased risk of death if cared for in high-cost systems," he says. The reason: The additional tests and procedures in the high-cost areas bring more risks than benefits. "A large portion of those extra costs are due just to proximity to health care," says George Bennett, CEO of Health Dialog Analytic Solutions, which tries to get unbiased information to patients. "Not all those expenditures are optimal or even appropriate."
Generic Plavix shenanigans
Sanofi-Aventis and BMS have settled a lawsuit against Apotex, a generic drug-maker for $40 million and manufacturing rights for 8 months. The two had sued Apotex for patent infringement on Plavix, a lawsuit which has pushed off the availability of a generic clopidogrel in the United States. Under the terms of the suit, Apotex will hold off selling their generic clopidogrel in this country until September 2011 — which is 8 months before the patent expires — and will receive $40 million from BMS and Sanofi-Aventis.
It's a clear victory for Big Pharma, and a loss for consumers and any company that's not Sanofi-Aventis or BMS. Plavix was #2 on the top 200 list in 2005, with sales totaling $5.2 billion. Had Apotex been successful and not settled out of court, there would have been a generic Plavix available relatively quickly. Unfortunately they settled for the guaranteed money, and exclusive rights for 8 months. As I've said before, the value of the generic drug market is tiny compared to Big Pharma — by taking the settlement BMS, S-A, and Apotex all win. (Personally if I was Apotex, I'd have pushed for a higher figure, just because Plavix is so valuable.)
As soon as the results were announced, ten lawsuits by health plans, unions, and other businesses were immediately filed in retaliation, alleging the deal violates federal antitrust laws. The FTC has said that they will examine the case to see if there are any laws being broken. Frankly, I don't know enough about antitrust law to speculate whether the new round of litigation holds any water. It will certainly be an interesting case to watch, and has implications for further back-room licensing deals between major pharmaceutical companies and generic drugmakers, though nothing as unique as this has happened in recent memory that I am aware of.
Don't be surprised to see the number of similar lawsuits mushroom over the next five years as pipelines run dry and patents expire — it will be the only way Big Pharma will be able to maintain their otherworldly revenues for a precious few extra years. I have not seen a change in the way Big Pharma conducts their R&D efforts, and even if they did, there would still be a multi-year dearth of new drugs in the near-term. The path Big Pharma chose back when direct-to-consumer advertising restrictions were lightened has resulted in fat profits when their focus shifted to marketing instead of R&D. Unfortunately for them and everyone else, this more litigation and fewer breakthroughs.
[tags]Medicine, Pharmacy, Sanofi-Aventis, BMS, Plavix, clopidogrel, Big Pharma, antitrust law[/tags]
Avastin license applications and enrollment re-openings
Avastin seems like it's in the news all the time. First Martha Stewart, then the closing of enrollment in a clinical study, and now it's back for two more newsworthy happenings. Firstly, the study which had closed its doors to more patients has re-opened them after a 60-day review to determine whether Avastin was responsible to heart problems and other unexplained deaths in the study group. The board evaluating the deaths determined that the mortality rate was consistent with other early-stage colon cancer studies, and recommended that the trial be re-opened. As always, the tricky thing with drugs like Avastin is determining whether the drug is at fault when patients die, or if they are dying as a result of their terminal illnesses.
More significantly, Genentech has applied for an additional license application for Avastin. Genentech would like the FDA to approve the drug for use in combination therapy with taxane chemotherapy, and they have requested a Priority Review, which means that if the FDA accepts it, Genentech will have their decision by November 2006. The results look promising:
"In this study, Avastin, when added to paclitaxel chemotherapy, doubled the time that women with metastatic breast cancer lived without their cancer advancing, without significant added toxicities, compared to patients who received only paclitaxel," said Kathy Miller, M.D., associate professor of medicine, Indiana University School of Medicine and principal investigator for the study. "This is the first time progression-free survival has been observed beyond one year in a Phase III U.S. clinical trial in patients with metastatic breast cancer."
Of course if this is approved, it will only add fuel to the drug-pricing controversy.
[tags]Avastin, Genentech, cancer, oncology, medicine, pharmacy[/tags]