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Innovation: Is Big Pharma Talking Differently?

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“Nearly 2 billion people have no access to basic medicines, causing a cascade of preventable misery and suffering. Good health is impossible without access to pharmaceutical products.” The World Health Organization’s (WHO) ‘Access to Medicine’ report on ‘Ten years in public health 2007–2017’ made this observation.

It also reemphasized: “A significant proportion of the world’s population, especially in developing countries, has yet to derive much benefit from innovations that are commonplace elsewhere.” Despite this, continued lobbying of many pharma companies for TRIPS-plus measures and legislation, the breaching of laws or codes relating to corruption and unethical marketing, and several blatant instances of company misconduct continues, even today.

In the midst of this situation, has Big Pharma started thinking differently about the purpose of innovation? I shall try to explore the ground reality in this article.

The argument of Big Pharma:

In response to the above observation or anything akin to that, Big Pharma has counter arguments, which are rather contentious, as many believe. They generally say, it is the responsibility of the different governments to alleviate health misery of the citizens, and not theirs. In tandem, they keep repeating the same old argument, underscoring lower prices of innovative drugs would lead to lower profit generation, significantly slowing down the process of innovation.

Drug innovation follows an arduous path and an expensive process: 

Big Pharma wants people to comprehend about what it entails in the journey of discovering a New Molecular Entity (NME) and converting it to a safe and effective medicine.

For example, in its booklet Bayer explained: ‘it takes about ten to twelve years to develop a new drug. during this time, highly qualified scientists from a variety of disciplines work on filtering out a suitable active ingredient from an enormous number of compounds. Between 5,000 and 10,000 compounds are rigorously studied in numerous laboratory tests and the best ones further optimized. out of four or five drug candidates that are then tested on humans in clinical studies often only one substance is approved and becomes available to physicians and patients.”

The entire process reportedly takes around 14 years, and according to a 2016 study by the Tufts Center for the Study of Drug Development - developing a new prescription drug, which gains marketing approval, is estimated to cost drug manufacturers USD 2.6 billion. Besides, a new analysis conducted at Forbes finds that getting a single drug to market may involve an expenditure of USD 350 million before the medicine is available for sale. It concludes, large pharmaceutical companies that are working on dozens of drug projects, spend USD 5 billion per new medicine.

Drug innovation is only for those who can afford:

As is being witnessed by many, Big Pharma always tend to argue that high R&D costs drive new drug prices up in pharma. Moving a step further, that drug innovation is for only those patients who can afford, was justified even by the CEO of a major constituent of Big Pharma. An article published in Forbes Magazine on December 05, 2013 wrote: “At the Financial Times Global Pharmaceutical & Biotech Conference this week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western patients that can afford it.”

How strong is the justification for high new drug cost?   

Instead of believing the pharma argument on its face value, it will be worthwhile to go for a dip-stick analysis. One such analysis, titled “Pharmaceutical industry profits and research and development”, published by the USC-Brookings Schaeffer Initiative for Health Policy on November 17, 2017, presents some interesting facts.

It says, the pharmaceutical industry is a high-fixed-cost and low-marginal-cost industry. This means, as the authors explain, that the cost of bringing a new drug to market is very high and the process is risky, while the cost of producing an extra unit of a product that is on the market is frequently “pennies a pill”. It also, indicates, though there is a disagreement about the exact cost of bringing a new drug to market, there is general recognition that the process costs run a fewhundreds of millions of dollars per new drug. Thus, innovative drugs are supposed to be somewhat more expensive to many patients. But how much – is the question to ponder, I reckon.

An example of a new drug pricing:

Let me choose here, as an example, the pricing of one of the most contentious, but undoubtedly a breakthrough medicine – Sovaldi (Sofosbuvir) of Gilead. Sofosbuvir was discovered in 2007 – not by Gilead Sciences, but by Michael Sofia, a scientist at Pharmasset. The drug was first tested on human successfully in 2010. However, on January 17, 2012 Gilead announced completion of the acquisition of Pharmasset at approximately USD 11.2 billion.

Subsequently, on December 06, 2013, US-FDA approved Gilead’s Sovaldi (Sofosbuvir) for the treatment of Chronic Hepatitis C. Sovaldi was priced at USD 1,000 a day in the U.S., costingUSD 84,000 for a course of treatment. That Gilead can’t justify the price of its hepatitis C therapy – Sovaldi, was highlighted in an article with a similar title, published in the Forbes Magazine on June 17, 2014.

It is worth mentioning that Sovaldi costs around USD 67,000 for a course of therapy, in Germany. Whereas, it costs round USD 55,000 in Canada and the United Kingdom (UK). Gilead has accepted an altogether different pricing strategy for Sovaldi in some other countries, such as India and Egypt.

When the above concept is used to explain Sovaldi pricing:

The above Forbes paper explained its pricing by saying: “Add in other therapies that supplement Sovaldi, and now you’re talking about USD 100,000 or so to treat a single patient. To use Sovaldi to treat each of the 3 million hepatitis C patients in the United States, it would cost around USD 300 billion, or about the same amount we annually spend for all other drugs combined.”

Let me now put a couple of important numbers together to get a sense of the overall pricing scenario of a new drug. The New York Times (NYT) reported on February 03, 2015: “Gilead Sciences sold USD 10.3 billion of its new hepatitis C drug Sovaldi in 2014, a figure that brought it close to being the best-selling drug in the world in only its first year on the market.”

Against its just the first-year sale, let me put the cost of acquisition of Sovaldi at USD 11.2 billion, an expenditure of USD 350 million before the medicine is available for sale as calculated in the Forbes articleand the cost to manufacture a pill of Sovaldi at around USD 130. This reinforces the point, beyond any doubt how ‘outrageous’ its pricing is.Even Gilead’s CEO admitted to failures in setting price of Sovaldi at USD 1,000-A-Pill, said another article on the subject. More important is, the costs to Gilead for Sovaldi acquisition and launch were virtually recovered in just a little over a year, but Sovaldi’s original price tag remains unaltered.

Is the Big Pharma talking differently now?

It appears that some constituents of Big Pharma have now started talking differently in this regard, publicly – at least, in letters, if not in both letter and spirit. Be that as it may, one will possibly be too naïve to accept such sporadic signals coming from pharma, as a shift in their fundamental thought pattern on drug innovation as a profit booster. Being highly optimistic in this area, I would rather say that these are early days to conclude that Big Pharma has really accepted the reality that – drug innovation is only meaningful, if it reaches those patients who need them the most.

Changing…not changing…or early days?

Let me explain this point with examples of changing…not changing…orearly days.

Changing?

On July 24, 2018 during an interview to Pharm Exec the head of the sub-Saharan African region for Roche made some key points, such as:

  • Groundbreaking innovation in medical science is only meaningful, if it reaches the patients who need it.
  • Access to healthcare is a multidimensional challenge and key to addressing the barriers, is really understanding them
  • Need to create a new business model that can sustainably – and this is very important – create access for patients.

Not changing?

When one Big Pharma constituent is showing some change in its approach on the purpose of innovation, another constituent is trying to make the entry of cheaper biosimilar drugs even tougher. This creates yet another doubt – both on safety and efficacy of biosimilars, as compared to much higher priced off-patent original biologic drugs.In August 2018, Pfizer reportedly called for US-FDA guidance on ‘false or misleading information’ about biosimilars, citing some of the following examples from other Big Pharma constituents, such as:

  • Genentech’s “Examine Biosimilars” website, which states that “the FDA requires a biosimilar to be highly similar, but not identical to the existing biologic medicine.” Pfizer argues that Genentech’s omission of the fact that an approved biosimilar must have no clinically meaningful differences from its reference product is a failure to properly communicate the definition of a biosimilar.
  • Janssen Biotech’s patient brochure for brand-name Remicade, which states that a biosimilar works “in a similar way” to a biosimilar without clarifying that the biosimilar must have the same mechanism of action as the originator. Pfizer also takes issue with the brochure’s suggestion that no infliximab biosimilar has been proven to be safe or effective in a switching study.
  • Amgen’s April 13, 2018, tweet that states that patients may react differently to biosimilars than to reference products. Pfizer also points out an Amgen YouTube video that implies that switching to a biosimilar is unsafe for patients who are well controlled on a current therapy.

Interestingly, on July 20, 2018 Pfizer announced that the US-FDA has approved Nivestym (filgrastim-aafi), a biosimilar to Neupogen (filgrastim) of Amgen, for all eligible indications of the reference product. This is the fourth US-FDA approved Pfizer biosimilar drug, the marketing and sales promotion of which expectedly, I reckon, will be no different from other biosimilars.

Early days?

Yes, it appears so. These are early days to draw any definitive conclusion on the subject.

Conclusion:

W.H.O observed in its above report that the ‘overall situation is somewhat improving’. It was also corroborated in the ‘2016 Access to Medicines Index’, which gave high marks to those companies that negotiated licenses for antiretrovirals and hepatitis C medicines through the Medicines Patent Pool (MPP). MPP was set up in 2010 as a public health organization supported by the United Nations to improve access to HIV, hepatitis and tuberculosis treatments in low- and middle- income countries.

It could well be, on the purpose of drug innovation some new realization has dawned, at least, on some few global pharma majors. However, it is still difficult to fathom its depth, at this point of time. There is no conclusive signal to believe that the Big Pharma is now thinking differently on the subject, not just yet.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Hepatitis C: A Silent, Deadly Disease: Treatment Beyond Reach of Most Indians

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Every year, July 28 is remembered as the ‘World Hepatitis Day’. In India, this year too, the day had gone by virtually uneventful, for various reasons. This happened despite increasing trend of the disease in the country.

Though, there are five main hepatitis virus types, namely A, B, C, D and E, of which B and C are the most fatal, in this article, I shall focus mainly on hepatitis C.

According to the World Health Organization (WHO), globally around 150 million people are infected with chronic hepatitis C virus (HCV), which is considered as one of the key factors for liver cirrhosis, fibrosis and hepatocellular carcinoma. At least, 350,000 HCV infected people die annually from these ailments.

A July 2014 study conducted by Metropolis Healthcare reportedly found that 17.97 percent of 78,102 samples studied in major cities of India such as, Mumbai, Delhi and Chennai, were infected with HCV and the patients belonged to the age group of 20 to 30 years. Out of 10,534 the tested sample in the age group of 0 to 10 years, 3,254 samples (30.89 percent) tested positive with HCV.

Institutes of Medicine (IOM) and the Department of Health and Human Services (HHS) of the United States consider hepatitis C infections a “silent epidemic,” as many patients infected with HCV are symptom free, without even leaving any hint to them that they are infected. The infected persons may feel healthy, even when serious liver damage is taking place, sometimes through decades.

All these patients are also potential carriers of HCV, risking rapid spread of the virus, as identification of the infected individuals for remedial measures continue to remain mostly eluding in India.

According to experts, around 80 percent of the HCV patients ultimately develop chronic hepatitis with serious liver damage, causing significant debility. With further progression of the disease, around 20 percent of these patients could develop fatal liver cirrhosis and 5 percent may fall victim of liver cancer.

A situation like this, is indeed a cause of yet another major worry in the healthcare space of India. Deadly hepatitis C crisis would likely to worsen much, if it does not receive healthcare focus of all stakeholders, sooner.

Traditional treatment regime:

There is no vaccine developed for HCV, as yet. HCV usually spreads through sharing of needles, syringes or other equipment to inject drugs, infected blood transfusion and tattooing, among others.

The standard treatment for HCV is interferon-based injections, which could make patients feel ill and give rise to flulike symptoms. Moreover, the treatment with interferon lasts from six months to a year and cures only 40 to 50 of HCV infected patients.

Now, chronic HCV treatment also includes a combination of three drugs – ribavirin (RBV), pegylated interferon (PEG) and a protease inhibitor, such as, simeprevir or boceprevir or telaprevir. These three drug combinations inhibit viral replication for enhancing immune response of the body to hopefully eradicate the virus.

At times, patients with very advanced liver disease may not be able to tolerate this traditional treatment with interferon-based injections, as those could make them feel worse.

The latest development in treatment:

There has been a significant advance in the treatment of HCV patients today with a new drug in the form of tablet that has doubled the viral cure rates from 40 to 50 percent to 90 to 100 percent.

Moreover, the new drug not just enables the physicians switching from injectibles to oral tablet, but at the same time reduces the duration of treatment to just 12 weeks, instead of 6 months to one year, offering a huge advantage to patients suffering from HCV.

This new generation of treatment now includes only Sovaldi (sofosbuvir) of Gilead, which is the first drug approved to treat certain types of hepatitis C infection, without any compelling need to co-administer with interferon.

Some other global pharma majors, such as Bristol-Myers Squibb, Merck & Co, Johnson & Johnson and AbbVie are also developing oral treatment regimens for HCV. All these have shown equally dramatic results in clinical trials, reducing the requirement for debilitating interferon injections.

Allegation of profiteering:

Looking at the high cure rate of more than 90 per cent for much-distressed HCV infected patients, none would possibly dispute that Sovaldi of Gilead signifies a giant leap in the treatment of HCV. But Gilead, according to a ‘Financial Times (FT)’ report, faces strong criticism of alleged ‘profiteering’ for its pricing strategy of this drug.

Sovaldi has been priced by Gilead at Rs 60,000 (US$ 1,000) per tablet with a three-month course costing Rs1.8 Crore (US$ 84,000), when it reportedly costs around U$130 to manufacture a tablet. This treatment cost is being considered very high for many Americans and Europeans too.

“At the US price, Gilead will recoup its Sovaldi development investment  . . . in a single year and then stand to make extraordinary profits off the backs of US consumers, who will subsidize the drug for other patients around the globe”, the FT report states.

This line of argument has been gaining ground on Capitol Hill, as well. This month, two senior members of the US Senate Finance Committee wrote to John Martin, Gilead Chief Executive, asking him to justify Sovaldi’s price, the report mentioned.

Half yearly sales of US$ 5.8 billion came from just 9,000 patients:

Be that as it may, the bottom line is, in the midst of huge global concerns over alleged ‘profiteering’ with this exorbitantly priced HCV drug, Gilead has reportedly registered US$ 5.8 billion in sales for Sovaldi in the first half of 2014.

The company has reportedly noted on its earnings call that it believes 9,000 people have been cured of HCV so far with Sovaldi. This means that the 6-month turnover of Sovaldi of US$ 5.8 billion has come just from 9000 patients. If we take the total number of HCV infected patients at 150 million globally, this new drug has benefited just a minuscule fraction of less than one percent of the total number of patients, despite clocking mind-boggling turnover and profit.

Stakeholders’ pressure building up:

Coming under intense pressure from all possible corners, Gilead has reportedly announced that it has set a minimum threshold price of US$ 300 a bottle, enough for a month. With three months typically required for a full course and taking into account the currently approved combination with interferon, the total cost per patient would be about US$ 900 for a complete treatment against its usual price of US$ 84,000. The company would offer that price to at least 80 countries.

For this special price, Gilead reportedly has targeted mostly the world’s poorest nations, but also included some middle income ones such as Egypt, which has by far the highest prevalence of HCV in the world. In Egypt, about 10 million people remain chronically infected and 100,000 new infections occur each year, according to Egyptian government figures. However, independent surveys  put this number between 200,000 and 300,000. Gilead has already signed an agreement with the Egyptian government in early July 2014 and the drug would be available there in September 2014. This would make Egypt the first to have access to Sovaldi outside the US and the EU.

What about India?

Gilead has reportedly announced, “In line with the company’s past approach to its HIV medicines, the company will also offer to license production of this new drug to a number of rival low-cost Indian generic drug companies. They will be offered manufacturing knowhow and allowed to source and competitively price the product at whatever level they choose.”

This is indeed a welcoming news for the country and needs to be encouraged for expeditious implementation with support and co-operation from all concerned.

Regulatory requirement:

However, despite all good intent, Gilead says, “ Some countries, such as India and China, are not satisfied with the tests conducted in the US and elsewhere for Sovaldi. They want additional clinical trials to be conducted on their own patients as a precondition for authorization, which will add extra costs and delays.”

Patent status:

It is worth noting here that the Indian patent office has not even recognized Sovaldi’s patent for the domestic market.

Local measures to address chronic hepatitis:

On May 22, 2014, the World Health Assembly adopted a resolution to improve prevention, diagnosis and treatment of viral hepatitis, in general. However, as things stand today in India, the surveillance systems for viral hepatitis are grossly inadequate and preventive measures are not universally implemented.

The Union Government of India has now expressed its intent to set up ten regional laboratories through the National Communicable Disease Centre (NCDC) for surveillance of viral hepatitis in the country. The key objective of these laboratories would be to ascertain the burden of viral hepatitis in India by 2017 and to provide lab support for investigating outbreaks.

Government sources indicate, the initial focus would be more on the preventive aspects rather than treatment of viral hepatitis given the limited health resources available. Setting up universal guidelines for immunization along with mass awareness and education have been considered as critical to fight this dreaded disease in the country. Simultaneously introduction of nucleic acid testing (NAT) and standardization of blood bank practices would be undertaken for preventing blood transfusions related viral hepatitis, in general.

Treatment for HCV is not widely available in the country. All types of HCV treatments, especially the newer and innovative ones, must be made available to all infected patients, as these drugs have high cure rates, short duration of treatment and minimal side effects.

Conclusion:

Viral hepatitis in general and hepatitis C in particular are becoming great national health concerns, as these contribute to significant morbidity and mortality, further adding to the national economic burden. India should just not strengthen its prevention strategies; it needs to focus on all the factors that influence speedy diagnosis and treatment of HCV.

As the WHO says, “New drugs have the potential to transform hepatitis C treatment, with safe and simple treatments resulting in cure rates of over 90 per cent”. The raging debate on Sovaldi needs to explore the newer avenues and measures for appropriately pricing the innovative medicines in the days ahead.

Concerned pharma players, the government and other stakeholders must work together and in unison to ensure that all those infected with HCV are diagnosed quickly and have access to life-saving treatments.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.