“I finished ECTRIMS 2015 this year with a pre-planned meeting with a senior pharma executive to discuss an adaptive trial design in progressive MS. This particular pharma executive was once a jobbing neurologist and is aware of what it is like to be at the clinical coalface. He has also done time in a developing country and understands global health politics very well. In other words he is well educated, has lots of experience, and despite working on the other side, some would say the ‘dark side’, he has ‘nous’.”
“Although he liked my ‘Hot Topics’ talk he took me task on my section of affordable drugs (see below). He is of the opinion that high-cost drugs (HCDs) are good for the world; his position was uncompromising and well-rehearsed. I suspect if you work in Pharma you have the arguments supporting Pharma’s position forced down your throat continuously; this analogy conjures up images of feeding ducks to produce foie gras.”
“We debated the issue of HCDs and after an hour neither of us was prepared to admit defeat. However, after more than a week ruminating and considering his arguments I have come around to seeing his point of view. HCDs are good for the world, however, that is only if you take a macroeconomic perspective of the issues. If you take a microeconomic, or MSer-perspective, view of HCDs there are too many caveats that need to be considered to support Big Pharma’s position on HCDs. These caveats, and there are many, will need to be addressed if the current big pharma model is to survive in its current form and get much needed support from larger society.”
“Why are high-cost drugs (HCDs) good for the world? In short HCDs act as a global economic stimulus. More importantly HCDs act as an incentive for innovation. Innovation occurs in many places, but in medicine, and in particular neuroscience it only comes to those who are prepared to take very high risks. The costs of drug development have mushroomed, one could argue out of control. It is now simply impossible to develop drugs without big pharma. The risks of failure, often measured in billions of dollars, are too high for academia, non-profits or even for governments accountable at the ballot boxes to take it on. The product development cycles are typically longer than 10 years and way beyond the life expectancy of any democratically elected government. Why have we allowed drug development to become so costly? That’s a discussion for another day, but there is no mistaking the observation that markets reward industries that are prepared to take on long-term risk, which is why the profits of the pharma industry remain so high.”
“In general the profitability of an industry is linked to its risk; low risk industries make lower profits than high-risk industries. If we could de-risk drug development we would be able to make it more competitive and the costs of drugs would fall. The reality, however, is the opposite; even relatively well capitalised University spinoff and start-up companies are forced at some stage to partner with big pharma. The costs of late phase drug development are now too high to finance easily outside of big pharma. We need to ask ourselves the question how did we let ourselves get into this position? As we have created the beast we now have to learn to live with it.”
“I have some ideas about how to derisk drug development; to make drug development cheaper. All of my proposals are political. I doubt pharma would be interested in them. I suspect the current model suits them well. Those who walk where others fear to tread will be rewarded many times over; this is why the pharma industry is often compared with the banking industry.”
“Although the profits from successfully launched HCDs are staggeringly high they feed a food chain that is astonishingly broad and deep. Regulatory, contract research, sales and marketing, public relations, advertising, packaging, distribution, medical writing, events organisation, travel, hotels, conferences, lobby groups, charities to name but a few of the industries that feed off the profits, or future profits, of successful HCDs. The Pharma industry also supports education, at both an undergraduate and post-graduate level. Large chunk of Pharma profits support the private pension funds; big pharma shares are generally considered blue chip shares hence their prominence in large pension fund portfolios. Then there is the tax take from big pharma, which is why developed countries compete with each other to keep a large pharma footprint in their country.”
“Medical education: The pharma is probably the biggest funder of continuing medical education or CME. Up until quite recently pharma have been funding CME directly and are now increasingly funding it via third party providers, for example Medscape. Without HCDs CME will need a new funding model.”
“Basic and contract research: A large number of pharma companies are partnering with Universities in relation to basic research. The costs, in particular the overheads, and the low success rate of in house pharma research have led to a large number of pharma companies funding research initiatives within Universities. The idea being is that they will have first refusal on any discoveries. The amount of money that follows contract research is staggering; the NHS is a big recipient of some of this money. This is one of the reasons why the NHS are incentivising us to increase the amount of clinical research we do on NHS patients. Without HCDs the flow of money via this route into the NHS will dry up.”
“Based on the arguments and observations above we are unlikely to see the current model change. I don’t think or MPs or MEPs have the appetite for it. This is why initiatives we have launched such as the Big Pharma Alternative and others we support such as off-patent drugs bill are unlikely to succeed. This means we have to approach the problems that HCDs create differently. We need to think about how we make access to HCDs equitable; why shouldn’t MSers in India, or MSers without health insurance, not have their disease managed appropriately. Rather than pointing fingers and stamping our feet we should all get around the table and think about solutions to these problems. For example, Novartis has recently announced a scheme, called the Novartis Access scheme, to bring cardiovascular and cancer medication to low-income countries for $1 per month. Why didn’t we lobby Novartis to include fingolimod on that list for MSers in low-income countries? Is it too late to change the list?”
“Caveats: My caveats to the value that HCDs bring to the economy at large are many and have been covered on this blog ad nauseum. The following is a starter list:
1. Too many repurposed drugs; these are less risky to develop do they really justify such a high price?
2. Too many me-too drugs; these are also less risky to develop why such a high price?
3. Too much spent on marketing? Can’t Big Pharma market drugs less flamboyantly?
4. Too many expensive and poorly designed market-access phase 4 trials. Who is big pharma fooling?
5. Why do drug prices rise with new competition? Surely in a true market, competition should result in prices falling? Are Big Pharma running a cartel?
6. Executive pay. Is there any way of making pharma executive pay less of a hot potato? When people with chronic disease are dying from lack of access to medication what do you think it looks like to society when executives get these banker-type bonuses.
7. Flash HQs. Some of the Pharma HQs I have visited are seriously 6* luxury. If patients saw these they would be horrified.
8. Poor efficiency. Some of the pharma R&D budgets are ridiculously high for what they deliver. Surely there are efficiency gains to be made? However, I would expect that any gains made on the R&D side would not be passed onto the consumer.
9. Paying the regulators. Why have governments allowed their regulatory agencies to become dependent on pharma subscriptions to function. Does this not create a conflict of interest? Are not the regulators working to a big pharma agenda?”
“Despite this big pharma world we now live in any industry needs regulation and this is why we need organisations such as NICE to demand value for money and to keep Pharma on their toes. What NICE however has created is a large disparity between what drugs cost in say the USA and the UK and Europe. At present the USA is subsidising drug costs across the world and this is unsustainable in the long-term. It has also led to a brain drain. As a result of the capping of profits in Europe big pharma are closing-up shop and moving their R&D and operations to markets that pay. NICE is almost certainly one of the main reasons behind the Big Pharma exodus from the UK. I suspect it is too late to do anything about it. What you gain on the swings you lose on the roundabout? Unfortunately, in the case of the Big Pharma exodus from the UK we have probably lost more than we gained.”
“Despite pharma politics and HCDs it is up to us the neurologists and healthcare professionals who look after people with MS to be their advocates. We have to make the case for them be it to Pharma, EMA, NICE or NHS England. What upsets me most when we have made the case successfully and have green lights flashing from all parties we are still so slow at adopting innovation. There is little point in innovating if we simply deny people with MS the benefits of the innovation pipeline. Instead of celebrating new NICE approved treatments that can really make a major difference to MSers’ lives we debate price and take our eye off the ball. We need to focus on research that addresses the unmet need and adopt innovations that address previously unmet needs.”
“Please have your say.”
My ‘hot topics’ talk from ECTRIMS that triggered the HCD debate.”