April 2006
The Chronicle of Healthcare Marketing
April 30, 2006
Covering Canadian and Global Pharmaceutical Economics
www.pharmaweenie.com
Table of Contents
Detailing: Back to the drawing board
Debate over private healthcare heats up
Up Here: What's happening in drug marketing
Third-party CME called fraudulent in US lawsuit over Lipitor market
Web-based tools help pharmas refine traditional marketing approach
GSK drafts employees to polish industry image
Transformational leadership: Changing the game
Out There: What's happening in the world of drug marketing
$3.4 billion talks. Will it also listen?
Trouble in the US FDA pipeline
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Detailing: Back to the drawing board
Technologies beget new approaches, but physicians still don't have the time
By Suzi Martin-Cusimano
for THE CHRONICLE OF
HEALTHCARE MARKETING
At no time has the term “detail” person been more relevant than in today’s pharma sales environment. With statistics indicating that only slightly more than seven per cent of reps are able to speak to a physician for over two minutes at a time, the key to a successful sales call is all in the timely delivery of details.
But the reality is that many visits to physician’s offices by product reps result in disappointing “no-see” service calls, the communication of partial details, or quick sample drops. The solution, some say, rests with new technology, but observers also wonder if the “e-channel evolution” will signal the end of traditional detailing.
“Everybody knows that the role of sales reps is changing significantly. I think that most companies have come to the realization that they’ve probably invested too much in sales forces and they’re starting to pull back,” says Greg Cook, prexy of Toronto’s mdBriefCase. Companies are “struggling” with the role of the sales reps since doctors “don’t want to see reps come in and open a detail aid anymore,” he adds.
Indeed, a recent decision by drug company GlaxoSmithKline to assign its 8,000 US sales representatives to deliver corporate messaging to community groups and schools could signal a major rethinking of the sales force function (see related article on page 8). Last December, Merck CEO Richard Clark also announced that the company will hack the promotional costs for each of its brands by 15 to 20 per cent by 2010 by increasing electronic pitches to doctors and redeploying some of its sales force toward new product launches.
Wayne Fisher, principal of Oakville, Ont.’s Plexus 360 Inc., a company specializing in web-based marketing solutions, thinks that many companies have put a lot of resources into pharmaceutical detailing, and that “the next trend is unwinding some of that detailing resource.” With doctors increasingly closing their doors to sales reps and new rules governing CME, companies need alternative ways to develop and maintain relationships with physicians. Add in the move in Canada toward electronic medical record keeping (EMR), and a national plan devised by provincial ministers of health to spread technology to physicians across Canada and, Fisher predicts, “There’ll be a shift in power–physicians will be able to receive information in a different way.”
Already, a growing willingness among physicians to embrace online technology is surprising even seasoned pharma marketers. In their 2004 study E-detailing: A passing phase or here to stay? Angie Perrotti-Amoroso, prexy of NewAngles Inc. in Montreal and co-author Niki Tsakonas of 3P Consulting Inc., also in Montreal, observe that pharma companies are “falling behind” the needs of physician’s online solutions.
“Doctors online savvy is much greater than what we’re providing them with,” says Perrotti-Amoroso, who believes that physician receptiveness to online solutions such as e-detailing is greater than most people think. One hundred per cent of physicians with some e-detailing experience, and 85 per cent of physicians with no experience, said they were very likely to participate in online detailing activities in the next 12 months, according to the results of the research.
PHYSICIANS AND THE INTERNET
But there are still misconceptions about the number of physicians who use the Internet. Estimates by even senior industry people tend to be way off base with not-so-educated guesses ranging from 40 to 50 per cent for specialists, and 20 per cent for general practitioners. According to her research, Perrotti-Amoroso believes 91 per cent of GPs and 100 per cent of specialists use the Internet for medical purposes.
Even more profound is data from Perrotti-Amoroso’s ongoing “Doctors on the Net” study, which shows an exponential growth in e-detailing interest among GPs, a figure that increased to 46 per cent in 2004 from a low of three per cent in 2001. “We can’t ignore this, it’s happening, doctors are very receptive and when we ask about satisfaction [in the e-detailing process], they like it,” she says.
Unfortunately, few companies have demonstrated the ability to put together comprehensive or convincing e-detailing programs. She likens some attempts to “watching Star Trek,” when what doctors want is very simple. “Give me the information I need, make it easy for me, and make it convenient.”
Fisher maintains that a host of creative tools are at the fingertips of pharma marketers, including voice, data, and video communications. Marketers need to get over the “mystique” surrounding online technology and once they’ve identified their communication objective, discover there’s “a lot of new arrows” in the quiver.
Identifying that objective naturally depends on understanding the needs of the target audience. But traditionally speaking, only 20 per cent of top pharma reps are able to build the relationships required to understand physicians’ needs, and get feedback on call content, according to Chris Nickum and Tim Kelly, practice leaders with IMS Information Management Consulting in the US.
Using advancements in industry data sources and analytics, companies can go far beyond the current “oversimplified” view of the physician-customer, in terms of market share for a given product and potential market value, by incorporating the influences and attitudes of each physician. “A physician’s prescribing value is a function of the opportunity to prescribe, plus his or her attitude toward prescribing, along with outside influences. By building these multiple dimensions into physician’s profiles, it is possible to understand the “why” behind the “what” and “how” of their behavior. This enhanced view of the customer and his or her situation is challenging the industry to change its operating model to center on individual customers or segments,” they wrote in the Sept. 2005 issue of Pharmaceutical Executive magazine.
LACK OF TIME BIGGEST FACTOR
One factor driving physician behavior that may have been overlooked, and which was revealed during the course of Perrotti-Amoroso’s research, is the simple lack of time most physicians have available for many detailing activities. It seems what doctors really want now is the ability to access product information on their own time, with a preference for weeknights between 6 and 9 p.m. The problem, she adds, is if e-solutions are poorly presented or have technological problems, there is always the chance that physicians will be turned off by e-detailing glitches.
Robert Charasidis, senior director of sales for Aptilon, a provider of e-sales and marketing solutions for the pharma industry, believes that the success of an online sales and marketing program depends on providing the physicians with rich interactive content, easy access, and open navigation.
“If you waste the physician’s time with a long registration process or with content that is not relevant or easy to navigate, you will lose them,” Charasidis says. “We have integrated our technology with our partners, which facilitates the process. We know who the physician is when he or she gets their invitation so when they click through, they are pre-cleared.”
Aptilon, which employs a suite of proprietary, self-serve and web-based live detailing e-platforms, invites physicians to the programs via company lists and their proprietary ReachNet, a multi-channel recruiting network with access to over 450,000 healthcare professionals in North America. The online solution offers a “boutique” of medical information relevant to a brand or therapy via our unique and interactive “dashboard” format. Its self-serve on-demand format can be used by physicians at their convenience via three approaches: Self-serve on-demand, where a physician can view key information at their convenience, such as archived presentations by key opinion leaders, case studies, and product information accessible 24 hours a day, seven days a week. The company also offers a Call Center option where an online rep can help the doctor with interactive content, in addition to a web-based live detailing sales tool for pharma reps that can be customized by the rep at the doctor’s office for later online interaction and follow-up.
Interestingly, while the programs are developed using existing content which is repurposed for an online audience, physicians often perceive the content as new, “even when it’s three to five years old,” says Charasidis. It speaks to the limitations of traditional detailing when reps come armed with 12-page detail aids and “the physician’s time is so pressed….and they don’t get a chance to go through all the messaging.”
Research in the US has suggested there is a potential 200 to 400 per cent increase in ROI as a result of e-detailing, which raises the question of what the role of the traditional sales rep might be in the future. But Charasidis insists that the “e-channel” is not about detracting from the rep-physician relationship, it’s about enriching it by offering extended service options and greater coverage in reaching physicians. It’s about creating an integrated, on-going sales and marketing process through harnessing the full potential of the Internet, he says.
DETAIL PIECES: STILL ESSENTIAL, OR NOT?
Perrotti-Amoroso says that her company’s research shows that doctors don’t see e-detailing as replacing pharma reps, but rather as a complement to traditional sales force activities. “Doctors enjoy seeing the reps because of the face-to-face contact,” but their time is restricted. A successful e-detailing session can lead to a follow-up at a convenient time, she adds.
But Cook believes that new media still has the potential to replace what sales reps do. No doctor wants to see a rep come in and open a detail aid anymore, he claims. Moreover, sales reps don’t like getting detail aids either. “Companies spend a lot of money creating detail aids and sales reps have to be pushed into using them,” he says.
However, Mike Luby, CEO and co-founder of TargetRx, a US marketing information company for the pharma industry, thinks that the detail piece should be pharma’s most powerful sales tool. Unfortunately, many reps often don’t always have adequate confidence in the work of the marketing departments that create the materials.
The fact remains that few detail pieces are adequately tested for effectiveness, says Luby. As a result, “predictive modelling” should be employed beforehand to assess effectiveness prior to the detail piece getting into the hands of the reps.
He concedes that e-detailing might continue to expand in 2006, however, the jury is still out on the effectiveness of the approach. A survey of data by his company suggests that e-detailing, in much the same way as detailing with a tablet PC, has proven to be only marginally more effective than traditional detailing at moving physician prescribing. “Our belief is that there is still a novelty effect for some physicians, while others have a preference for the medium,” he adds.
Debate over private healthcare heats up
Letting private healthcare into Canada a serious mistake, opines former editor of the New England Journal
By Ian J.S. Moore
for THE CHRONICLE OF
HEALTHCARE MARKETING
Canadians need to examine proposals for privatization measures carefully before making any decisions that might lead to significant changes in a system that would really seem to have many advantages and benefits, a former editor of The New England Journal of Medicine told a Toronto audience recently.
“You certainly want to avoid the American experience,” Dr. Arnold S. Relman told a symposium on delivering private healthcare in Canada, organized by The Canadian Institute. “You certainly want to stick to your guns in believing that every Canadian is entitled to healthcare when needed, regardless of their ability to pay.
“In my opinion privatization is a snare and a delusion [and] I think that privatizing the [Canadian] healthcare system would be an incredible mistake.”
Describing himself as a capitalist who doesn’t believe in government ownership or socialized medicine, the Harvard Medical School professor emeritus of medicine and social medicine said the US experience with medical care has many valuable lessons for Canada.
“Some of the criticisms of your system are valid,” he said, “but you can do something about them without changing the system. It will not be improved by adding more privatization to what you already have.”
It’s a non-starter to use statistics from European and OECD countries to demonstrate competing parallel private and public services will reduce waiting lists and ensure high-quality care, Dr. Relman says, because these are different countries, different cultures, and different societies with different expectations.
He believes that Americans and Canadians, however, are almost kin in every respect with similar public expectations about healthcare services. But, according to Dr. Relman, “the US is a lesson in what not to do with a healthcare system.”
CAN’T IGNORE THE AMERICAN EXPERIENCE WITH HEALTHCARE
He agreed with privatization advocates that “focused” services are more efficient, but only when they avoid providing any non-profitable services, and do not accept patients with co-morbidities or complications. The US government stopped funding private hospitals because of this practice.
“You have to believe that ideology and philosophy and economic theory trumps evidence in order to ignore the American experience,” Dr. Relman said. “The experience is clear. It’s unavoidable. It’s overwhelming.”
That experience is that business is first and medicine second at investor-owned, for-profit specialty hospitals. Studies confirm the hospitals are productive and efficient, but their success relies on avoiding complicated medical cases and selecting only patients who have beneficial health insurance policies and no co-morbidities.
As a result, the remaining public hospitals in America stagger with the burdens of caring for the old along with the very ill.
Other studies have also shown that private insurance in the US is less efficient than in the centralized provincial systems in Canada, with significantly more overhead and administrative costs.
The outcome is no better and, perhaps, sometimes worse, he says, and private healthcare costs in the US are rising just as rapidly as they are in the public sector.
Dr. Relman said the majority of economic studies in peer-reviewed literature demonstrate for-profit healthcare operations are more expensive, less efficient, and not of better quality.
HEALTHCARE NOT COMMODITY
Moreover, when payment is fixed, the operations in some areas also fail medically. For-profit dialysis units in the US, for example, have significantly higher mortality rates, and the total number of patient referrals for transplantation—resulting in a loss of revenue—are significantly lower.
In the US, for-profit nursing homes also have a higher incidence of government citations for medical problems and higher mortality rates compared to non-profit homes.
“Healthcare is not a commodity,” Dr. Relman said. “It must be held apart from the rest of the economy. It is a public responsibility that should be publicly funded but privately delivered.
“It is not an investor’s game, but a vital social service that must be rendered efficiently, honestly, and without the profit motive being involved.”
Actor Sally Field (center) has joined the effort to raise public awareness of osteoporosis. She’s keeping an online journal to describe her own experience with the disease, and the steps she’s taking to manage it. __________________________________________________________________________________
(Feature Photo Service)
Up Here: What's happening in drug marketing
MDS, the Toronto-based health conglomerate, said it will voluntarily wind down all commercial bio-analytical liquid chromatography and mass spectrometry operations at its Montreal facility. The announcement follows an audit by the US FDA, which identified concerns about the site’s effectiveness and management. Analyst Mahar Yaghi tells the Canadian Press news service: “The ongoing issues with the FDA are not good for MDS’s reputation with clients and could continue to hamper revenue growth for the CRO business, thus providing additional opportunities for its competitors, which are currently enjoying a period of exceptional growth.”
KING PHARMACEUTICALS, the mid-tier Tennessee drugmaker, is setting up shop in Canada, and has acquired from Allerex Laboratory the local rights to injectable epinephrine (EpiPen), an emergency Tx for severe anaphylaxis and severe asthma. Net sales of the product here were Cdn$27.6 million in 2004. Says King’s Steve Andrzejewski: “This is part of our strategy to pursue commercial opportunities for our leading branded prescription pharmaceutical products, such as EpiPen, in Canada and throughout the world.” King will pay Allerex Cdn$28.38 million plus an earn-out based on sales. King rang up US$1.77 billion in sales in 2005, up 36 per cent over 2004. Earnings in 2005 were US$117.8 million.
QLT, the struggling Vancouver drugmaker, inked a co-development and licensing pact with Retinagenix, a start-up Seattle Rx discovery company, to develop active synthetic retinoid products for Tx of degenerative retinal diseases. Retinagenix gets an upfront payment of Cdn$1.8 million, milestone payments, and royalties. Says a hopeful QLT boss Bob Butchofsky, who was just appointed to the position in March: “We plan to progress the first drug candidate from the Retinagenix collaboration into the clinic within the next 18 months.”
Shareholders of BIOVAIL had a look at company founder Eugene Melnyk on the TV program “60 Minutes,” and evidently liked what he had to say about Wall Street short-sellers. Melnyk—who is seeking $4.6 billion from various hedge-fund operators and financial analysts, accusing them of stock market manipulation—was joined in his effort by other owners of Biovail stock, who would like an additional $4 billion for their trouble. Among the defendants named is Bank of America Securities, the California-based financial services behemoth. The plaintiffs say the bank and its co-defendants harmed Biovail through a “massive and fraudulent disinformation campaign.”
ASTELLAS bought worldwide rights to antipsoriatic Rx alefacept (Amevive), ending Biogen Idec’s search for a buyer. Says Astellas’ Canadian prexy Hiromu Ozaki: “The acquisition of this well established product not only strengthens our dermatology franchise but also provides Astellas with an important opportunity to offer Canadian dermatologists an effective treatment option for a very difficult to treat skin disease.” Amevive sold for a low-ball price: around Cdn$70 million, plus a royalty. Observers say the discounted price reflects the difficulty Biogen experienced in marketing the complex biological Tx globally.
Third-party CME called fraudulent in US lawsuit over Lipitor marketing
Pfizer has succeeded in annoying both the Teamsters and US federal prosecutors, a situation most would seek to avoid. The union is suing the planet’s biggest drugmaker, accusing Pfizer of improperly marketing lipid-lowerer atorvastatin (Lipitor), resulting in several billions of dollars in unnecessary costs to Rx benefits plans. The suit says Pfizer promoted off-label use of Lipitor: “Pfizer also employed purported ‘independent’ third-parties, which were fully funded by Pfizer and/or received other incentives from the company, to promote Lipitor’s off-label use. These third-parties furthered Pfizer’s scheme by promoting the off-label use of Lipitor to physicians under the guise of providing physicians education information concerning the use of statin drugs.” The Associated Press news-wire reports the US Attorney’s office in Brooklyn, NY is also investigating the claims.
Says a spokesman for the company: “We have been co-operating with that investigation, and have seen no merit in any of the claims in that matter.”
NOCs of Note: April 2006
Oral hypoglycemic (sulfonylurea)03-17
Glimepiride (Amaryl, sanofi-aventis Canada Inc.) Comments: Manufacturer name change; TAB(1mg, 2mg, 4mg)ORL
Antibacterial periodontal agent03-15
Minocycline supplied as minocycline hydrochloride (Arestin Microspheres, Johnson & Johnson Inc.) Comments:POW(1mg/4mg)SGV
Antidepressant03-01
Escitalopram oxalate (Cipralex, Lundbeck Canada Inc.) Comments: Maintenance of antidepressant response in patients with Major Depressive Disorder (MDD); TAB(5mg, 10mg, 15mg, 20mg)ORL
Antiretroviral agent03-10
Efavirenz (Sustiva, Bristol-Myers Squibb Canada) Comments: Updates to the product monograph regarding long term safety/efficacy data, and changes to contraindications, warnings and precautions, and drug-drug interactions, including the addition of immune reconstitution syndrome; CAP(50mg, 100mg, 200mg)ORL, TAB(300mg, 600mg)ORL
Antibiotic03-21
Cefotaxime (supplied as cefotaxime sodium) (Claforan, sanofi-aventis Canada Inc.) Comments: Manufacturer name change; PWSO(500mg/vial, 1gm/vial, 2gm/vial)IM, IV
Rectal anti-inflammatory corticosteroid foam03-01
Hydrocortisone acetate (Cortifoam, Squire Pharmaceuticals Inc.) Comments: Manufacturer name change; AER(10%)RT
Prostaglandin F2alpha analogue and beta-adrenergic receptor03-17
Travoprost/timolol maleate (Duo Trav, Alcon Canada Inc.) Comments:SOL(0.004% / 0.5%)OPH
Modifier of upper gastrointestinal motility03-17
Domperidone (as domperidone maleate) (Gen-Domperidone, Genpharm Inc.) Comments:TAB(10mg)ORL
Antineoplastic03-09
Carmustine (Gliadel Wafer, MGI Pharma Inc.) Comments: Manufacturer name change; WAF(7.7mg)IL
Antineoplastic03-13
Hydroxyurea (Hydrea, Bristol-Myers Squibb Canada) Comments: Update to the product monograph; CAP(500mg)ORL
Opioid analgesic03-13
Morphine sulfate (Kadian Capsules, F.H. Faulding & Co. Ltd.) Comments: Manufacturer name change; SRC(10mg, 20mg, 50mg, 100mg)ORL
Topical corticosteroid with antibacterial-antifungal agent03-01
Clioquinol / flumethasone pivalate (Locacorten Vioform Cream, Locacorten Vioform Eardrops, Squire Pharmaceuticals Inc.) Comments: Manufacturer name change; CRM(3% / 0.02%)TOP, DPS(1% / 0.02%)OTIC
Anticoagulant/antithrombotic agent03-21
Enoxaparin sodium (Lovenox, Lovenox HP, sanofi-aventis Canada Inc.) Comments: Manufacturer name change; [Lovenox SOL(100mg/ml)SC], [Lovenox (30mg/0.3ml) - SOL(100mg/ml)SC], [Lovenox (with preservative 300mg/3ml) - SOL(100mg/ml)SC], [Lovenox HP - SOL(150mg/ml)SC]
Antidiuretic03-02
Desmopressin acetate (Minirin Tablets, Ferring Inc.) Comments: Change in the manufacturing process for the drug product; TAB(0.1mg, 0.2mg)ORL
Plasma volume expander03-10
Hydroxyethyl starch / sodium chloride (Voluven, Fresenius Kabi Deutschland GmbH) Comments:SOL(6% / 0.9%)IV
Anti-inflammatory analgesic agent02-27
Meloxicam (Mobicox, Boehringer Ingelheim (Canada) Ltd./Ltee) Comments: Update to the product monograph; TAB(7.5mg, 15mg)ORL
Bone metabolism regulator03-07
Pamidronate disodium (Pamidronate Disodium for Injection, Sandoz Canada Inc.) Comments: Manufacturer and product name change; SOL(3mg/ml, 6mg/ml, 9mg/ml)IV
Topical anti-inflammatory/analgesic03-03
Diclofenac sodium (Pennsaid, Squire Pharmaceuticals Inc.) Comments: Manufacturer name change; SOL(1.5%)TOP
Antiglutamate03-21
Riluzole (Rilutek, sanofi-aventis Canada Inc.) Comments: Manufacturer name change; TAB(50mg)ORL
Beta-adrenergic receptor blocking agent03-03
Atenolol (Riva-Atenolol, Laboratoire Riva Inc.) Comments: New strength; TAB(25mg)ORL
Leukotriene receptor antagonist03-21
Montelukast sodium (Singulair, Merck Frosst Canada Ltd., Merck Frosst Canada Lte) Comments: Safety updates to the product monograph; TAB(10mg, 5mg, 4mg)ORL; GRA(4mg/pck)ORL
Topical antifungal02-27
Ciclopirox olamine (Stieprox, Stiefel Canada Inc.) Comments: The prophylaxis and treatment of dandruff or the treatment of seborrhoeic dermatitis in which the yeast Malassezia furfur is involved; SHP(1.5%)TOP
Luteinizing hormone-releasing hormone (LHRH) analog03-10
Histrelin acetate (Vantas, Paladin Labs Inc.) Comments:IMP(50mg)SC
Angiotensin converting enzyme inhibitor/diuretic03-08
Enalapril maleate & hydrochlorothiazide (Vaseretic, Merck Frosst Canada Ltd. / Merck Frosst Canada Lte) Comments: Updating the indication for the treatment of essential hypertension in patients for whom this combination therapy is appropriate; TAB(5mg & 12.5mg)ORL; TAB(10mg & 25mg)ORL
cGMP-Specific Phosphodiesterase Type 5 inhibitor03-10
Sildenafil citrate (Viagra, Pfizer Canada Inc.) Comments: Updates to the product monograph; TAB(25mg, 50mg, 100mg)ORL
Antidiabetic agent04-12
Insulin glulisine (recombinant DNA origin) (Apidra, sanofi-aventis Canada Inc.) Comments:SOL[100unit/ml (10ml vial)]SC, SOL[100unit/ml (3ml cartridge)]SC, SOL[100unit/ml (3ml OptiSet)]SC
Passive immunizing agent03-03
Immune globulin (human) (IGIVnex, Talecris Biotherapeutics, Inc.) Comments:SOL(10gm/100ml)IV
Special Report
Web-based tools help pharmas refine traditional marketing approach
Something old, and something new. That would be a fair summary of the state of technology in pharma marketing in 2006, industry observers seem to agree. Today’s technology is a mixed bag of state-of-the-art and the tried and true, with some interesting new twists.
Whether it’s new and emerging communications tools, or innovative uses for older technology, the concept of streamlining the process would seem to be the most important element. “If you are looking at driving closer to the customer, and looking at how to get efficiency into that business, the answer is to take steps out [of the process],” says Wayne Fisher of Oakville, Ont.’s Plexus 360 Inc. To accomplish that, traditional business processes may need to be turned and examined in a non-traditional way.
Whatever technology the project ultimately involves—innovative software, interactive solutions, or merely a fax machine or the telephone—it’s essential to think outside the proverbial box when it comes to choosing a medium. According to Fisher, it’s important not to pigeonhole a particular technology as suited only to a particular application. “It’s much more interesting to say, this is my communication challenge and employ the appropriate tools to invent new creative communication solutions,” he observes.
Fisher’s company has integrated a suite of desktop e-marketing tools with e-logistics tools to help pharma marketers enhance their marketing initiatives and simplify their marketing processes. For example, marketers or sales managers can access online databases, Internet-based fax, voice Internet webcasts, and order or send promotional materials and track their progress in real time.
The wave of the future is empowering the customer, says Fisher, who refers to a term called “disintermediation,” which simply means removing the middleman. Creatively using web-based tools to streamline the marketing-logistics process removes unnecessary steps in the marketing process, and helps maintain the speed, flexibility, and fast market feedback that is required to compete in today’s market.
The web-based tools are flexibly designed, so clients can access the tools online, or they can outsource the service to Plexus 360. “They’re not single items, but a whole integrated solution of desktop tools,” adds Fisher.
A perceived obstacle to using technological tools is that many of them look like magic but really aren’t, says Fisher. He adds that definitions of available technologies are often inconsistent. The terms “virtual” and “interactive” are misused and misunderstood, he says, and the field is full of what he considers techno-jargon, terms like “podcasts” and “webinars.”
Most technological solutions actually come down to five basic technological tools that can be adapted to a variety of different needs. These include:
• Virtual Audio: the oldest, and the least complex technological tool, VA enables the user to conduct secure, automated audio conferences without having to reserve the call in advance;
• Virtual Web: a powerful Internet tool that makes it possible to share computer content with an audience in a controlled, secure environment;
• Virtual Webcast: allows the user to record a web seminar from their computer with video, audio, and synchronized PowerPoint slides. Participants can participate through e-mail, polling, or testing;
• Live Web cast: a tool that allows streaming of video and audio from live events, published to the web via a secure URL, incorporating registration, reporting, polling, and chat. Live events can be archived to build libraries of recorded topics for future viewing; and
• Virtual Video: considered the Cadillac of web-based communication tools, VV is a user-friendly video conferencing solution providing TV quality video, ease of use, and full support for video calls.
The process of determining which technological tool to apply in any given situation starts with a careful identification of the objectives, says Fisher. “If you want to look at the communication result, you’ve got to say ‘this is what I want to achieve. And what is the best tool to do that?’”
He’s careful to note that the best tool might not necessarily be the most advanced, so older technologies should be considered as well. For instance, although it’s one of the oldest technologies, Fisher says the facsimile machine is an ideal research and communication tool, especially in a healthcare environment where “signatures are usually required.”
LOWLY FAX STILL CONSIDERED A VALUABLE TOOL?
The traditional fax has nevertheless benefited from new technology that now precludes the operator having to physically load documents into a machine. Computer software makes it possible to customize faxes for individual recipients, although those recipients still receive the faxes in the traditional hard-copy way. It’s “hit send and it’s gone,” says Fisher, whose software enables clients to merge up to 21 different fields in their faxes. Fax can also be considered better than e-mail for reaching certain audiences. “As soon as you send an e-mail out in a mass mailing, most SPAM controllers will grab it,” Fisher explains.
Nicole Archambault, prexy of MedBase Marketing Intelligence Inc., a company with offices in Toronto and Montreal specializing in custom profiling, agrees that the facsimile machine remains an effective way to fast track urgent messaging. “The fax is being used in a different way than it was 10 years ago,” says Archambault.
She adds that fax messaging is the preferred route for conveying drug recall information, because “You want the nurse, assistant, pharmacists to see it and act on it right away.” Health Canada guidelines prohibit the use of regular mail or e-mail for drug recalls, but have approved the use of fax communication in the past year, she says.
Using fax broadcast software, MedBase is able to fax up to 60,000 doctors and 7,500 pharmacies across the country in a two-hour time period, says Archambault. Pharmacists are one of the biggest users of fax technology, as are doctors who often send prescriptions via fax, says Archambault. “Telex and carbon paper are gone, but the fax is going to be here for awhile longer,” she jokes.
Because of its longevity and its flexibility, the same may hold true for the telephone. Archambault says the phone is a central communications tool for the company’s call center, Medical Dialogue. She claims the call center, which hires foreign doctors waiting for their Canadian accreditation to interview Canadian GP/FPs and specialists on selected topics for pharma clients, operates on an 80 per cent response rate, says Archambault. The phone interviews conducted between 8 am and 8 pm on weekdays last just a few minutes, but “it works well for our pharma clients. It’s very specific and they get results instantly.”
MARKET RESEARCH COMBINED WITH CLINICAL DATA
When combined with PDA technology, traditional phone communication can prove useful. Terrence Sigouin, CEO, S&H MedCom Inc. of Grimsby, Ont., is marrying the data-gathering capabilities of the PDA and the convenience of the phone line in a new venture, a Rep Activity Assessment (RAA) tool that captures details on rep visits to hospital-based physicians, and a Diagnosis and Treatment Assessment (DTA) tool that captures data at the point of patient care from a panel of 77 hospital-based physicians with a special interest in oncology.
Twice a week, recruited physicians input data based on patient visits—demographics, location of visit, diagnosis, follow-up, staging, and treatment details, and quality of life assessment scores (ECOG)—on handheld devices equipped with a wireless Internet browser, phone, and a digital camera. “As they collect data, they transmit it daily, or send it via the telephone,” says Sigouin, who also utilizes the communication devices to send out market research questionnaires.
Leading edge mobile high-speed data networks like those recently introduced by Bell Canada will allow applications like Sigouin’s to work faster, smarter, and more efficiently. Introduced in April, Bell’s EV-DO (EVolution Data Optimized) mobile high-speed data network leverages third-generation (3G) wireless network technology to deliver data at download rates of up to 2.4 megabits per second, according to Bell Canada spokesperson Paolo Pasquini. It delivers broadband speed on compatible mobile wireless, and is the kind of technology any business or industry can maximize if they have a need to work with a wireless connection, Pasquini says. He adds that this is the first time in Canada this type of network has been available coast to coast. “The EV-DO network will allow all applications, healthcare and otherwise, the ability to increase or grow their wireless adoption and strategy as it relates to high-speed networks,” he maintains.
The mobile network will nevertheless require EV-DO-capable devices and PC cards that are available through Bell Mobility outlets. Among these devices, Bell has added the Sanyo SCP-7500 phone, which has push-talk capability, advanced multimedia functions including live TV with streaming televison and video high-speed Internet browsing, 1.3 megapixel camera with PictBridge compatibility, digital camcorder, dual color LCD displays, and SMS and instant messaging. It can also be used as a tethered modem according to a Bell press release.
Bell’s other new offering, the UTStarcom PPC6700, features CDMA, Wi-Fi and Bluetooth, and has a slide-out text keyboard, touch screen, and a camera among other bells and whistles. Pasquini calls the product “the first pocket PC-based handset in Canada with the Microsoft Windows Mobile 5.0 Operating System with Microsoft Office Software like Word Mobile, which supports tables, lists, and embedded images and allows users to create, edit or review docuemnts.” It also supports Excel and PowerPoint mobile, which allow users to view and create charts and graphs and view and rehearse presentations.
Because it offers real time solutions, Pasquini thinks the new technology will alter the entire communications landscape. “It’s going to open a lot of doors. We’re at a new beginning of wireless innovation.”
GSK drafts employees to polish industry image
New strategy makes entire sales force national PR machine
Troubled by the worsening reputation of drug companies that is ranked just above tobacco and oil manufacturers, pharmaceutical giant GlaxoSmithKline is out to win over a skeptical public—by turning its entire sales force into a PR machine.
In an unprecedented mission, the US$35.4 billion pharmaceutical giant has quietly anointed its 8,000 US sales representatives as “public relations ambassadors” to lift its image and that of the beleaguered industry with grassroots PR. The initiative, dubbed the ”Value of Medicine,” was created by Michael Pucci, GSK’s VP-external advocacy, to respond to overwhelming criticism and negative perception of the pharmaceutical industry.
“What we’re leveraging here is asking our employees to talk to people, even if they just start with their family members,” he said.
Deciding to eschew a traditional corporate branding campaign, Pucci instead has unofficially “deputized” his sales force to speak on behalf of GSK and the industry about the affordability of prescription medication; how today’s medicines fund the next generation of blockbuster drugs; access to [US] state and federal programs that offset drug prices; and even some common misconceptions about direct-to-consumer advertising.
Armed with salient talking points and answers to tough questions, the sales force is out speaking to Rotarians, Elks, Lions Club members, senior-citizen groups, weekly newspapers, schools, and every community group they can think of. And Mr. Pucci said GSK has enough sales reps to cover every county in every state in the US.
“Reputation matters,” Pucci said. “In this industry, it’s so important. We have to tell that story of how we’re investing for the future.”
He said the majority of questions the reps receive revolve around pricing, and he has given them what he calls a “learning system” that takes 50 minutes to master and will enable the rep to satisfy queries about the company and the industry. GSK reps made 15,000 presentations last year, Pucci said, reaching 1.8 million people.
The seeds of the effort were sown when Pucci two years ago viewed a Harris Interactive poll on the perception of various industries. Pharmaceutical companies received a 44 per cent favorable rating in 2004, a big plunge from 79 per cent in 1997, putting drug makers in the uncomfortable company of tobacco and oil titans. So he went to GSK Vice Chairman Bob Ingram and said, “We have to play offense here. We have to tell our story.”
GRASSROOTS TOUCHPOINTS
Ironically, in the 2005 Harris poll, pharma jumped back up 17 points based on what Harris said were more moderate price increases and effective advertising to promote the industry. But Pucci insists that the best PR is less about traditional advertising and more about touchpoints at the grassroots level.
“A book called The Influentials cited data that people are more trusting of information conveyed by family members and regular rank-and-file employees than from corporate figures and more formal channels,” he said.
The message is getting around—at least within the drug industry. “We have encouraged our other companies to undertake similar programs,” said Ken Johnson, VP-communications for the industry’s lobby group in the United States, Pharmaceutical Research and Manufacturers of America. “It’s not enough for our sales people to be marketers, they need to be ambassadors of the industry as well. We have a great industry; we shouldn’t be ashamed of defending it.”
But while rivals have done corporate branding PR at a more understated level, they don’t appear to be too eager to join in. “It’s ambitious, and I give Glaxo a lot of credit for doing it,” said the chief marketing officer for a top 10 drug maker. “But I’m not sure I want 8,000 people on the ground given that level of responsibility to basically speak for a company and an industry. With that many, the odds say there’s going to be a percentage of them—however small—that will make a mistake, or stray from the script, or whatever.”
Then there are those who question the script. “I understand pharma does feel they’ve been picked on, but I’m not sure this is the best way to go about changing that image,” said Dr. Donna Sweet, chair of the Board of Regents for the American College of Physicians, which is on record as opposing direct-to-consumer advertising. “It’s not a bad idea if these people are acting as good citizens and telling the truth and not trying to sway people. But I have a hard time believing they’re going to be completely fair and honest in all situations.”
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Reprinted with permission from the Feb. 21, 2006 issue of Advertising Age. © Crain Communications Inc., 2006
Transformational leadership: Changing the game
Mike Ball, president of Allergan of Irvine, Calif., is one of the speakers who will describe their ideas and experiences in detail during the 2nd annual Futures in Healthcare 2006 conference, scheduled to be held May 12 at the Kingbridge Conference Centre in King City, Ont. He spoke with Susan J. Turner
You’ve had a successful career, first in Canada, and now as President of Allergan. What steps did you take en route?
I joined the pharmaceutical industry in 1981, after completing my BSc and MBA at Queen’s University in Kingston, Ont. My first jobs were with Eli Lilly, in sales and marketing. In 1983 I moved to Syntex Canada as Group Product Manager and advanced to become President in 1992. A year later, I moved to Syntex Laboratories’ head office in Palo Alto, Calif., as Senior Vice President of Sales, Managed Care and Marketing. In 1995, I joined Allergan as Senior VP and moved to Irvine. A year later, I became President of North America and, several moves later, was appointed as President of Allergan in February 2006.
What career strategy have you followed?
I don’t know that I consciously followed a strategy. I just learned as much as I could in each job and did the best job I could, trusting that I would be rewarded with promotion when the time came. I think sometimes people make the mistake of worrying about the next promotion too soon. Instead, focus on maximizing your current role.
I also think it’s important that you are a true team player and don’t engage in destructive politics. I read somewhere recently that “You don’t claw your way to the top, you’re carried there.” I think this is very true.
How did your Canadian experience prepare you to move to the US?
My Canadian experience was very valuable for a couple of reasons. First, at the time, the US was just beginning to develop managed markets and my experience with the Canadian public health system gave me a head start in helping the organization develop successful strategies in this area. Also, having had broad working experience in a Canadian organization that included all of the departments—medical, regulatory, finance, manufacturing, sales, marketing, etc.—meant that I understood all of these functions very deeply. That is a great asset. Moving into a larger US organization was an easier transition because I understood the workings of the total company.
Is there a difference in leadership styles between Canadian and US organizations?
I would characterize the US as more demanding. Surveys show that Americans work the longest hours anywhere in the world, and this has been my own observation. There is also more need for risk-taking and innovation in addition to a lot of very hard work.
What advice would you give to Canadians who are interested in a global career?
I have seen Canadians adapt very well in the US and I encourage Canadians to consider a global career. Canadians bring broad experience, which is highly sought-after. My advice would be to advance as high as possible in Canada before moving to a global position. That way, you offer the broadest experience. Canadians also have a cultural appreciation for global cultures—we grew up with the idea of the Commonwealth, and we understand other cultures. Companies value this kind of diversity in their senior management. For example, at Allergan our CEO is from Scotland, the President and the head of Global operations are both Canadians, the head of Allergan US is from the UK, and an American is in charge of Europe.
Mike, what’s the most important lesson you’ve learned about leading and developing people?
I believe strongly that a leader needs to give people a sense of the future—of where the company might be—and to get them to envision a future state. Then, help them to define their role in making this happen. They must be clear on their responsibilities and accountabilities. I am very results-oriented and subscribe to measuring and rewarding achievement. Companies tend to be either results-focussed or relationship-focussed. The latter generally leads to organizations that are politically-driven. By focussing on results, you engage people in an active dialogue and it frees them up to do their best because they are clear about your expectations.
Also, I think it’s important to ask people “How might you think about this differently than I would?” That way, you tap into their creativity and the diversity of experience—and at the same time you let them know that you expect them to innovate.
As a leader you need to set the standard. Set an example by what you do—your work ethic, your priorities—not what you say.
And, last, hire great people, not great resumes.
We’ve seen leaders transform their industries by bringing an altogether different perspective, or by seeing threats as opportunities. Tell me about an event that transformed your organization, and your role as a leader.
As a young marketer at Syntex in the early 1980s, I was responsible for Naprosyn, which had been the company’s largest product and the number two product in the Canadian. pharma industry. At that time companies across Canada were experiencing major losses to their businesses due to generics (this was before Canadian patent laws had been brought up to international standards, and generic companies could obtain a compulsory licence for any approved product). Not only did we lose our major source of sales revenue, but the company had just built a new manufacturing plant in 1981 and we risked an enormous decrease in volume as Naprosyn was genericized.
We did something that was highly unconventional at the time and developed an “authorized generics” strategy. This was a first in Canada. We formed a new division called Syncare, which manufactured and sold generic forms of Naprosyn under their own label. Not only did we recover a portion of lost sales, but we also managed to maintain a share of volume for our plant.
But then we took it a step further and offered the same services to other companies who were in this situation. The strategy was great for payers, because it brought new competitors into the generic market, as well as a sound strategy for the companies.
Spearheading this strategy gave me exposure at a young age to top Syntex management and established my reputation as someone who would bring new solutions that would have a major impact on the business. Because this was a totally new approach, and because we extended it beyond the company to the entire industry, it helped take Syntex to the next level. I encourage all of my people to not only to do a good job in their regular responsibilities, but to look for those kinds of breakout opportunities.
What advice would you give to executives on seizing new opportunities presented by changes in the external environment?
You need to engage your top people—and your top customers—in active dialogue on out-of-the-box solutions. We have used proven brainstorming and lateral thinking techniques—for example, the methodologies that Edward De Bono developed in the 1980s. And you also need to recognize that while many new ideas won’t work, this is not a reason not to pursue them.
The worst thing you can do is to hunker down. As a leader, you have to be constantly thinking about new ways of doing things, and to drive the organization to behave this way.
How do you stay current in the face of the time pressures you face every day?
You really need to be disciplined and force yourself to set time aside—to meet with government, payers, and to interact with customers. My annual objectives include a certain number of days in the field, and I actually do it. You need to get over your discomfort about being out of the office. After all, the ivory tower walls are very thick. You won’t find new ideas there, and you won’t be fulfilling your role as a leader by staying inside the tower.
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For more information, see www.kingbridgecentre.com/Futures
Talecris Biotherapeutics Canada opened their new office in Mississauga, Ont., in March, with long-time Mississauga mayor Hazel McCallion doing the honors. Based in North Carolina, Talecris develops and produces plasma-derived therapeutic proteins.
Out There: What's happening in the world of drug marketing
A stateside lawsuit against JOHNSON & JOHNSON, SCHERING-PLOUGH, CHATTEM, and other makers of sunblock gained a little momentum, as litigants sought class-action status for their claims. The companies are accused of making improper claims for their products, and engaging in deceptive marketing. Plaintiffs want their money back, along with actual and punitive damages. The companies deny any wrongdoing. Says a spokesman for Schering-Plough: “Labelling and advertising for all Schering-Plough products, including sun care, are developed in compliance with all applicable laws and FDA regulations.”
RANBAXY LABORATORIES, the biggest Indian drugmaker, bought GlaxoSmithKline’s generics business in Italy. Said Ranbaxy kingpin Malvinder Mohan Singh: “This acquisition of the Allen Generic business from GSK will fast track Ranbaxy’s growth plans in Italy. This product portfolio complements Ranbaxy’s own pipeline of products for the Italian market and will enable the company to utilize opportunities arising from future patent expiries.”
MERCK has inked a Cdn$145 million in-licensing pact with Paratek Pharmaceuticals for antibiotic candidate PTK0796. Para previously partnered with Bayer on the Rx, an aminomethylcycline antibiotic, but that deal ended last year. Para is also noodling out an MS Tx with Serono.
VALEANT PHARMACEUTICALS, the California drugmaker formerly known as ICN, said it plans to restructure its operations to cut costs and accelerate earnings growth. Part of the plan involves out-licensing pradefovir, the company’s hepatitis B Tx candidate, and VRX-840773, its HIV compound. Says Val boss Timothy Tyson: “We remain committed to the development of Viramidine, retigabine, and Infergen, which we will continue to pursue aggressively. As we near the completion of our second pivotal, Phase III trial for Viramidine, we are evaluating the best path to advance this development program to regulatory approval.”
Prescription growth in the erectile dysfunction category has kind of petered out, so the marketing team behind PFIZER's sildenafil (Viagra) will shift its US DTC efforts to a non-branded educational approach, using the new theme, “Just Ask Today.” The tone of the new ads follows that used earlier by GlaxoSmithKline and Schering-Plough in marketing rival Tx Levitra, and appears to repudiate the salacious messages used earlier in DTC ads for ED products. Viagra revenues have been falling for the past two years, reports Dow Jones news service.
STIEFEL LABORATORIES, the privately held skincare house, has purchased a facility in North Carolina that it intends to use as its worldwide R&D headquarters. The company, which has other research centers in the UK and Brazil, plans to relocate its stateside R&D operations from New York. Says board chair Charles Stiefel: “The relocation of our Research Institute contributes to Stiefel’s strategic evolution toward being the most-valued dermatological company in the world.”
A Reader Writes...
I found the article on the use of the sales force by GSK in the US “to speak to service organizations, schools, etc.” of great interest, and had a severe case of deja vu when I read it (The Chronicle of Healthcare Marketing, Dec. 2005, p.1). Although there probably are not too many people besides myself who were in the industry in the mid-1960s and are still active today, I was a sales representative for Smith, Kline and French (the predecessor of the current GSK) at the time, located in Toronto.
During that period the industry was feeling a combination of bad press and the initial inroads of the generics. SK&F developed a program whereby the sales reps would earn a bonus (usually a dinner out with their spouse at a nice restaurant) if they made a certain number of speeches to their local service clubs. I can vividly remember as a young new rep standing in front of an intimidating audience of “old” people at a Lions, Kiwanis, or whatever dinner, and trying to convince them about the altruism of the industry and the value we brought—a rather daunting task to say the least.
Who says history does not repeat itself?
Toronto
On page 8 of this issue, you’ll find additional details r.egarding GSK’s renewed push to upgrade their image by planting reps at every afternoon tea in town. After all those little cucumber sandwiches, who could bear to go out for dinner at a nice restaurant?—ed.
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The Chronicle of Healthcare Marketing welcomes correspondence from readers. Please reply to health@chronicle.org or by fax to 416.352.6199.
$3.4 billion talks. Will it also listen?
The joke going around is that capitalism defeated communism, and, emboldened with victory, is now trying to defeat democracy. That’s the sort of lunchtime witticism that might draw a smirk, unless you happened to pay $1.08 for a litre of gas earlier that morning, or happened to read something in the newspaper about more record profits in the petroleum sector.
Some politicians are beginning to mutter about imposing a tax on excessive corporate profits earned in the energy business. Legislators appear reluctant to consider such measures, for all the usual reasons. Topping the list is the concern that taxation is a disincentive for companies to invest in innovation and exploration.
That’s a point that we in the drugbiz can appreciate.
In Ontario, health minister George Smitherman just proposed a series of adjustments to the pharmaceutical policies of Canada’s largest and wealthiest province that would bear the same effect as discriminatory taxation.
One intriguing suggestion from Mr. Smitherman is that the provincial formulary would arbitrarily cut the price it pays for generic drugs by one-fifth. Now, we must admit, this proposal caused us to laugh so hard and so abruptly that we sprayed the cappuccino right out of our nostrils, causing quite a commotion around the office. The Fraser Institute made it fairly clear through their 2004 investigation that Canadian generics companies have long been fleecing patients, if pricing found in other jurisdictions is used as a basis of comparison (Aug. 2004: Brett J. Skinner, “Generic Drugopoly: Why Non-patented Prescription Drugs Cost More in Canada than in the United States and Europe”). Yet, the local generics lobby has skilfully deflected attention from that scandal, preferring to frame the matter as a contest between high-minded Canadian entrepreneurs and the rapacious multinational forces of Big Pharma.
That trick worked pretty well for at least 30 years, ironically allowing the privately held Canadian generic oligarchs to take the mammoth profits they derived from overcharging patients in Trois-Pistoles, Kindersley, and Salmon Arm—and unashamedly plough the proceeds into becoming multinationals themselves.
However, someone in the Ontario health ministry may have finally deciphered the implied message contained in the phrase, The Customer is King.
In every nook and cranny of the global economy, buyers are applying every tactic at their disposal to reduce costs. If this point needs to be illustrated, merely wander down an aisle at your neighbourhood Wal-Mart, or, better yet, drive slowly down the abandoned streets in your community that once included locally owned shops and services, before Wal-Mart, Costco, and Home Depot came to town. (That blur you will notice through your windshield will be the Last Remaining Canadian Economic Nationalist, abandoning his principles in a fevered rush to save 14 cents on a block of Breyer’s ice cream.)
Seemingly, it has just dawned on Minister Smitherman that the $3.4 billion he spends each year purchasing prescription drugs for Ontarions might represent what is known in other places as buying power. We are familiar with the practice in the United States of HMOs and benefits-providers negotiating for the best possible price from therapy producers. We are also aware of the legislation in that country which imposes harsh penalties on vendors who attempt to charge the federal formulary more than private organizations. Ontario’s drug budget is larger than all but a handful of US payers, and it is inevitable that the province will insist on receiving commensurate pricing considerations, from both the generics and branded segments of the pharma industry. That much is assured.
Also contained in Mr. Smitherman’s proposals are some ill-conceived musings about encouraging pharmacists to freely substitute generics for prescribed next-generation therapies. This is a particularly poor idea, for too many reasons to enumerate, but the minister has ensured the support of dispensing druggists by cannily offering them approximately $5,000 each in new or increased fees.
This will introduce a series of new challenges for research-based drugmakers doing business in Canada, under our nation’s idiosyncratic approach to capitalism.
We have observed, in other economic models, that the savings offered by so-called Big Box retailers are counter-balanced by the cost not just of diminished independent local retailing activity, but also of fewer North American manufacturing jobs. From this, can inferences be drawn regarding continued investment and philanthropy from research-based drugmakers in specific provinces?
That’s not for us to imply, but we would hope that in the coming interplay between buyer and seller, all parties might keep in mind that there are several high-risk endeavours unsuited to the inexperienced, the smug, or the timorous. There’s shark-hunting, dragon-slaying, duelling with pistols at close range, and, yes, there is also something called market-force capitalism.
Trouble in the US FDA pipeline
By Peter Pitts,
Special to THE CHRONICLE OF
HEALTHCARE MARKETING
Has the prodigious American drug development machine started to sputter?
After much hand wringing in the press about there being “too many” new drugs comes a sobering fact: Although pharmaceutical companies poured a record amount of money into drug development in 2005, the US Food and Drug Administration approved only 20 new drugs last year, down from 36 in 2004.
Only once in last 10 years has the number of newly approved drugs been lower than last year’s figure. So, what’s clogging up the approval pipeline?
According to Dr. Scott Gottlieb, the FDA’s deputy commissioner for medical and scientific affairs, “The development process itself is not keeping up at a fast enough pace to match the progress on the discovery end.”
In other words, the science hare is outrunning the approval tortoise.
When Thomas Edison was asked why he was so successful, he responded, “Because I fail so much faster than everyone else.” Edison didn’t face today’s massive federal regulation or predatory liability lawyers. And he was working in a technology where failure was often as clear as a short circuit. Pharmaceuticals are infinitely more complex. Success or failure can be a matter of years, if not decades.
But the question remains. Is it possible to apply advanced engineering to the approval process so failure—or success—can be identified faster in the tricky area of medicine?
Not only could there be enormous savings in costs, but helpful drug discoveries could be moved more quickly from bench to bedside, so they actually help the patients who so desperately need them.
Institutional, legal, and organizational barriers, of course, remain formidable. But even within the existing structures, there is much that can be done.
Regulators, industry, and academia can partner with the goal of improving standardization and automation of clinical research—in effect targeting “cures” for the development process itself. Such a partnership—with a forceful mandate for change—would seek to apply modern engineering and cutting-edge scientific knowledge to medical product manufacturing.
Standard critical path analysis would almost certainly point to innovations in clinical trial design and uniform statistical methodologies that could produce far more efficient evaluation of a drug’s safety and effectiveness. The cost savings of these early warnings would more than pay for whatever process redesign was required. Currently, 50 per cent of drugs that undergo large-scale Phase 3 trials turn out to be too unsafe or not effective enough for marketing. That is not a sustainable model for the 21st century.
FDA COULD HELP COMPANIES ‘FAIL FASTER’
There are dozens of fairly obvious tools that can speed up the process with little or no risk. Standardized biomarkers, for instance, have been publicly discussed and vetted for years. They can and should be incorporated into the drug approval process.
Consider a few financial implications.
If the FDA were to help companies to “fail faster” by using the lower end of the Tufts drug development number, a 10 per cent improvement in predicting failure before clinical trials could save US$100 million in development costs for a single drug. Shifting just five per cent of clinical failures from Phase 3 to Phase 1 would reduce out-of-pocket costs by US$15 to $20 million. Moving just one-quarter of failures from Phase 2 to Phase 1 would reduce costs by US$12 to $21 million.
Such an FDA initiative should not—and need not—conflict with what industry and other regulatory agencies in the US and around the world are already doing. In fact, coordination and integration are beneficial to everyone. But the FDA’s role is pivotal. The agency stands at the crossroads of the translational process.
The FDA is uniquely suited to take a major role in this effort because of its unique broad and deep understanding of the—often predictable—snags companies and products encounter that are causing drug development to fail in late stage clinical trials.
The Agency has the technical expertise that can draw together stakeholders, help prioritize process research, and build partnerships for reform. What’s more, since drug development today is in fact global, it’s time to push harder for common standards across national approval bodies, private industry, academic institutions and other global translational research groups.
An FDA Critical Path initiative would help American-based pharmaceutical companies as well. Our innovative growth companies would be more efficient in navigating the approval process and could thus compete more effectively against the bigger, better-funded players in the market. That in turn would have distinct benefits both for these emerging growth companies and for public health.
The most important tool is collaboration. Regulators must not remain distant, aloof, and unpredictable. Rather the FDA should take the lead in embracing all stakeholders as partners in the public health process.
COMMUNICATION IMPROVED
The FDA itself is well aware of these issues, and has already undertaken significant reforms to speed up a number of high-profile critical paths. In the area of cancer therapies, especially, the agency is making innovative therapies available more quickly and at a lower total cost while maintaining high standards of consumer protection.
It has reduced drug development times by avoiding multiple review cycles. It has initiated a quality systems approach to medical product review. It has worked to clarify regulatory uncertainty and increase predictability in product development to stimulate innovation.
The FDA’s communication with sponsors has been significantly improved. The agency is now more available and engaged early on in the review process—including interactions at the end of Phase II meetings, prior to NDA meetings, and after the NDA Submission meeting piloted by the Oncology Division.
Even when drugs are given “Fast Track” status, the FDA has requested and approved comprehensive development programs in advance of that designation to ensure subsequent clinical trials are properly structured.
With new Special Protocol Assessment guidance, product developers now work more closely than ever before with the FDA to create phase III studies prior to implementation to gather all necessary information.
The agency’s emerging Continuous Marketing Application enhances sponsor access to early guidance and feedback for Fast Track drugs or biologics intended to treat serious or life threatening diseases, and provides for FDA-sponsor agreement to engage in frequent scientific interaction.
In addition to early and frequent communication, FDA’s quality systems approach to medical product review has also made the whole review process more efficient. The Common Technical Document (CTD) and the electronic CTD (eCTD) uses cutting edge technology and a closer adherence to international public health methodologies to provide better quality, consistency and communication with sponsors.
In priority areas besides cancer (e.g., obesity and diabetes), the agency is stimulating the development of new medicines by creating clearer guidance for product approvals.
With its Special Protocol Assessment (SPA) program, the agency now helps product developers design phase III trials so all necessary data is collected.
When there is an anticipation of a Fast Track designation, the FDA now works closely with the sponsor to review and approve the comprehensive development program and the potential filing for Accelerated Approval. This includes the phase III confirmatory studies that are a critical component of application for accelerated approval.
But more needs to be done.
A family has been described as “a parliament of habits.” The FDA—with its 10,000 employees—is a unique family with scores of idiosyncrasies. To an outsider, the agency’s methods are not always transparent, but there is certainly an internal logic that moves things forward within the organization. Ultimately, that logic is the agency’s traditional mandate of protecting public health. That mission is inherently cautious, and conservative.
As the agency enters its second hundred years—a very different medical environment—there are strong arguments that the agency’s mission should be expanded to not only protect, but also advance public health.
The stakes are very high. In economic terms alone, the FDA now regulates upwards of 25 per cent of the US economy. And the political implications of changes in health policy are enormous. So different cultures—scientific, business and political—are heavily involved in every proposal for change.
So change is very, very difficult and very, very political. The FDA remains a government bureaucracy with its own interests and its own byzantine internal politics. When such a bureaucracy is attacked, the wagons are circled. It becomes difficult to accept advice (even good advice) from people viewed as “enemies of the agency.” The “current unpleasantness,” driven by events ranging from Vioxx to DTC.
Leadership shuffles have brought shifts more attuned to public relations quick fixes in response to ad hoc attacks from politicians and interest groups. And caution replaces fundamental strategic analysis and even science. Because every change hurts someone.
But change there must be if the FDA is to become what it should be in this century. It must become more future-oriented and science-based, able to move down “the critical path” more directly and rapidly and both protect and advance the public health.
To own change, to wrestle the agenda from those who would use it for their own purposes, we must drive change. Rather than being against things we must seize the day and be for something.
There is no question that without core scientific expertise and capacity, it will be difficult to identify problems in product development across products and disciplines, to then identify the real critical path opportunities, to help choose the very best priorities, to identify, support, and work with the best partners, to realistically assess the potential of various approaches to do what we want FDA to do (get rid of the barriers and bumps, develop new paradigms, etc.) and to continue to perform science-based review and risk assessment, and provide appropriate guidance, particularly with new/cutting edge technologies, and maintain agency credibility and standing with the scientific and public health communities.
A healthy and sustainable vision would include appropriate support of cooperative agreements, partnerships, targeted infrastructure in specific areas, and joint training programs. There is a need for rigor and expertise even in identifying needs, giving out grants and ongoing evaluation.
As FDA’s bioinformatics and biomarker capability increases, its scientific abilities will be strengthened by being deeply and consistently engaged in collaborative drug evaluation development work.
Intra and extramural work must become one in the same, must meet and help develop scientific standards and be part of a program of creating support for guidances, endpoints, etc. We must use the mantra of the agency’s current antagonists that FDA must be governed by science not politics and use it to our advantage to create a new a gold standard for how evaluation should be conducted.
With respect to the overall critical path matrix, we may wish to also consider how the FDA undertakes the process of identifying relevant public health and medical needs and opportunities. Since we expect the initial list of critical path issues from the FDA shortly, this also gives us a ready-made point of departure.
I recently had the privilege of a private meeting with Nobel Laureate Joshua Lederberg. The topic of conversation was the future of the FDA and the agency’s Critical Path initiative.
We talked about the state of applied research and “the texture” of the agency, the prioritization of development science, biomarkers, and a host of other future-oriented issues.
He talked. I took a lot of notes.
At the end of the meeting he put everything into perspective in a single sentence. He leaned over the table and said, “The real question should be, is innovation feasible?”
I hope so.
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Peter Pitts is director of the Center for Medicine in the Public Interest in New York, and a former associate commissioner of the US FDA.