The record of the industry and the FDA, along with Big Insurance dictates that we not be considered or included in care.
"The outcome of the US election could have a significant impact. Senator Barack Obama wants Medicare to negotiate directly with companies to drive down drug prices that are on average twice as high as those in Britain."
Blockbusters are expiring, pipelines are emptying and watchdogs are growling
* by Julia Kollewe, The Guardian, Saturday August 30 2008
The pharmaceutical industry is under siege with the looming end of blockbuster drugs, imminent patent expiries on top-selling medicines and government pressure to lower prices amid accusations of profiteering.
GlaxoSmithKline's new boss, Andrew Witty, has likened discovering a blockbuster - with annual revenues of at least $1bn - to finding a needle in a haystack. Many of the big-selling medicines launched in the 1990s are about to come off patent, allowing generic drugmakers to make cheaper versions. Only four of the 10 major companies have enough products in their pipeline to plug the looming revenue shortfall.
"We've seen the end of the very big blockbuster, the likes of Lipitor," said Kate Moss at PricewaterhouseCoopers. "There's not enough time for a product to become a massive blockbuster. There's so much competition in the market."
The world's top-selling drug, Lipitor, will lose its patent in 2011, threatening Pfizer's $12.7bn (£7bn) annual sales from the anti-cholesterol drug.
Professor Sir Michael Rawlins, who chairs health watchdog Nice, infuriated the industry last week when he accused it of overpricing vital new medicines. But drugs companies reject the charge, pointing to initiatives on pricing. The Association of the British Pharmaceutical Industry (ABPI) says UK drug prices have fallen by 21% in real terms over the past decade.
"It takes £550m - and 10-12 years - to bring a new drug to the patient," said a spokeswoman. "It's an investment in public health. It's only natural that the companies need to make a return on this initial investment."
Nice refused to approve expensive new kidney drugs for NHS use, saying they are not cost effective - despite an offer from Pfizer to pay for the first round of treatments.
The move highlights efforts by Big Pharma to be more flexible on pricing. Under an innovative funding scheme, Johnson & Johnson allowed the NHS to recoup the cost of its Velcade medicine for bone marrow cancer if patients show no or minimal improvement. At GSK, Europe's biggest drugmaker, Witty has proposed a "pricing for value" model. Under the formula, companies would be paid little for new drugs at the outset but would be reimbursed fully once their value is proven.
Richard Barker, ABPI director general, said: "Nice needs to combine pure economic arithmetic with other considerations: the severity of the condition, the availability of alternative treatments, the consequences of refusing treatment in terms of the length and quality of life, and the savings in the use of carers."
Nice and early
In another important move, the industry and Nice would get together at an earlier stage to discuss which drugs the government is likely to fund when they come to market. Under a recent pilot project, Swiss group Novartis discussed new drugs with Nice before clinical trials were designed. GSK now talks to the health watchdog from phase II of drug trials - the intermediate stage of development - rather than afterwards.
"The idea of early dialogue is now accepted on both sides," said Barker.
Moss pointed out that regulators at Nice will need to have the right skills to analyse early clinical data. Drugmakers, for their part, should carry out tests to determine which patients benefit from a drug so that their use can be targeted.
The cost of R&D has risen as companies chase fewer new molecules. Alan Sheppard at consultancy IMS Health reckons the chances of discovering a blockbuster have halved from 10-1 to 20-1. He cited competition, pricing, safety concerns and fewer unmet clinical needs. "The increased rigour in being able to get a product to market means that far more molecules have to be screened before a likely candidate can be positively identified," he said.
In response, companies are targeting niche drugs for cancers and neurological diseases - expensive treatments for relatively small numbers of patients.
"We can expect drug research in large, well-served areas like pain relief to be reduced," said Marc Gerstein, a former consultant to US firms Eli Lilly and Pfizer. "New drugs for niche conditions are likely to be fantastically expensive. In many cases, it will seem like blackmail. Without government assistance or insurance, treatment will simply not be affordable for many."
The outcome of the US election could have a significant impact. Senator Barack Obama wants Medicare to negotiate directly with companies to drive down drug prices that are on average twice as high as those in Britain.
The industry has also been hit by large-scale public health scares. In his recent book Flirting with Disaster: Why Accidents Are Rarely Accidental, Gerstein analyses US drugmaker Merck's Vioxx disaster - the painkiller had to be withdrawn in 2004 after causing thousands of heart attacks and strokes.
"Could this happen in the UK?" he asked. "The odds seem lower than in the US, but the pressures to enhance drug marketing and co-opt the regulators are ever present. There is a lot of money at stake."
In Britain, GSK had to issue new safety warnings after its diabetes drug Avandia was linked with an increased risk of heart attacks last year.
As blockbusters become rarer, drugmakers such as GSK have switched their focus to developing a range of "middle earners" with annual revenues of £200-300m. Witty declared in July: "GSK must change if it is to be successful in the future." There is a new focus on vaccines - which are hard to copy - and household brands like Ribena, Horlicks and Lucozade.
Biologics and generics
Companies are also investing heavily in developing biological medicines, which can often be used to treat several conditions and are harder to replicate than conventional chemical drugs. Roche offered more than $40bn to take full control of US biotech partner Genentech in July. AstraZeneca, the UK's second-largest drugmaker, has acquired biotech firms Cambridge Antibody Technology and MedImmune, and aims to derive 25% of its new drugs from biologics by 2010.
GSK set up a new biopharmaceuticals R&D division in June, headed by Ian Tomlinson, the former boss of the acquired antibodies firm Domantis. He described it as "a big move for GSK". He wants to take biological products from 6% to 20% of GSK's pipeline by 2015.
Companies are organising R&D into smaller groups of scientists, to operate more like speciality pharmaceuticals groups such as Shire, Britain's third-biggest drugmaker.
To boost revenues, Big Pharma is also venturing into the generics market. Global generic medicines are now worth $71.7bn, a tenth of the entire world drug market valued at $712bn.
As companies focus more on producing costly treatments for rare diseases or benefiting certain patient groups, the NHS will face new spending dilemmas. IMS Health's Sheppard wondered: "Are we still underfunding our health service? We get good value for money but if we put more money in, would people's health improve?"
At a glance
Medicines coming off patent
2011 Lipitor anti-cholesterol (Pfizer) Annual sales: $12.7bn
2011 Seroquel for schizophrenia (AstraZeneca) $4bn
2010 Advair for asthma (GSK) $6.4bn
2010 Arimidex for breast cancer (AstraZeneca) $1.7bn
(Patents typically expire 10-15 years after marketing approval is granted)
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