ACCESS TO MEDICINE INDEX 2010

GlaxoSmithKline ranked number one in a study of pharmaceutical companies offering access to medicines to emerging and developing nations, proving that the UK drug giant has a far stronger grasp on new markets than its US and Japanese counterparts.

The study ranks 20 companies based on significant criteria including pricing, patents and intellectual properties, capacity enhancement, marketing, lobbying tactics, competition, and philanthropy.The study was the brainchild of Wim Leereveld, founder and chairman of the NGO, Access to Medicine Foundation, in partnership with research firm Risk Metrics.

This is the second index that the foundation has published. The first, released in 2008, featured data submitted from only nine companies. This year, 19 of the 20 pharma firms were open and transparent with their information.

High Marks All Around
So what separates GSK from the competition?

“GSK has integrated access to medicine into its core business model, so it’s not philanthropy, it’s really part of the way they do business and part of their understanding of the importance of emerging markets,” said Afshin Mehrpouya of Risk Metrics. “As a result, they are heavily engaged in research for neglected diseases. At the same time [they are] able to sell their drugs in the emerging markets, they help with the development of the infrastructure.”

Companies at the middle or the bottom of the list treat access to medicine as a tactical issue rather than including access to medicines as a major part of their business, Mehrpoua explained.

The biggest mover among Big Pharma companies was Pfizer, which ranked 17 in 2008, but moved up to number nine this year.

“Pfizer is now seen as a player,” Leereveld said. “The company has changed dramatically. All the people [in that division] are gone and there is a new team that see [access to medicine] as a very relevant matter to perform in developing countries and they did their utmost to get their data together.”

European companies, in general, have has a longer history operating in emerging markets, giving them a lead on Japanese and American firms that relied for many years on local markets for sales.

“Given the saturation of the Western market, the decline of the blockbuster drugs, and the fast growth of the emerging markets, companies like Pfizer are moving faster to catch up with their European counterparts,” Mehrpouya said.

And for the first time in over 40 years, promising new drug candidates have appeared on the R&D scene. The candidates are designed to be effective not only against not regular TB, but also against multidrug-resistant (MDR) and extensively drug-resistant (XDR) strains of the disease, as well as those co-occurring with HIV. The drugs are expected to reduce treatment time to two months, as opposed to the current (40-year-old) six-month regimen for regular infections. Current courses for MDR are even longer, and just 1 percent of patients get the proper treatment.

But activist organization Treatment Action Group puts a $2 billion per year price tag on the R&D needed to bring these drugs through the pipeline, and current funding is well below that—75 percent below, according to Médicins Sans Frontières.

New vaccines, drugs, and diagnostics could reduce TB’s global infection rate by 71 percent by 2050. That may seem a long way away, but according to TB Alliance communications manager Joanna Breitstein, that’s the best case scenario. The current rate of reduction for the disease is just 1 percent per year, and without advances in technology and drugs for MDR TB, the rate is likely to stay the same. That’s even grimmer news when you take into account population growth: reduction becomes negligible.

On the plus side, there was a general increase of almost 100 percent in public financing of health worldwide, according to an April article in The Lancet. The exception? Sub-Saharan Africa, where government spending actually decreased. The region has an extraordinarily high infection rate, partially due to the high incidence of HIV/AIDS in the population.

Helen Disney

When most of us look at taking a new medicine we tend to think it will make us better. Some of us may think about possible side effects but few of us expect the medicines we take to actually be dangerous. Recently, the public and policymakers have become more aware of the issue of counterfeit medicines — especially as patients increasingly learn about how to shop safely online for pharmaceuticals. But scant attention has been paid to a safety issue that is also important to patients — the problem of substandard medicines.

Unlike counterfeits, which have been much more widely discussed, substandard pharmaceuticals have been legally authorized for manufacturing and, more often than not, approved for market and sale by a national or regional drug regulatory authority. Despite this, these medicines nevertheless do not meet the required quality or safety requirements for that particular drug or treatment, compromising safety and efficacy.

It may appear that this is more likely to be a problem affecting developing countries such as China, India or Latin American countries, and indeed these countries are certainly affected. But this issue is not just one that affects developing countries. Especially now that global supply chains bring medicines quickly and easily from one country to another, substandard medicines can reach also American or European patients. While safety regulations may look good on paper, several countries are still failing to meet the required standards and the consequences for public health are worrying. Regulators need to take a closer look at what is happening on the ground.

A new report by the Stockholm Network, Keeping Medicines Safe, cites examples and case studies from China, India, Brazil, Argentina and Turkey to demonstrate the lethal effects that counterfeit and substandard drugs can have on public health. It shows how bad, non-existent or unenforced regulations can play a serious part in this process.

For instance, current regulations in India divide regulatory responsibilities between state and national authorities. The delegation of inspecting and enforcing Good Manufacturing Practices (GMP) to the state level has resulted in substantial variation in the quality of medicines produced, despite all manufacturers having been certified by the relevant authorities. Some Indian states do a good job of maintaining high levels of manufacturing practices but other states do not. As a result, substandard medicines can easily move from one state to another.

In Argentina, the government and national drug regulator actively promote the prescription and use of a category of medicines called ‘similars.’ These drugs are advertised as being generic drugs, but in actual fact ‘similars’ have not been tested for bioequivalence — a prerequisite in much of the developed world for labelling a drug a generic.

China’s national drug regulations are comparable to those of Europe or North America, but the lack of implementation and enforcement is glaring. China is one of the world’s largest producers of both substandard and counterfeited medicines. One of the main reasons for this is wide-spread and pervasive corruption, even among government regulators. Indeed, only five years ago the head of the national medicines regulator was executed on charges of corruption.

All of these circumstances are causes for concern, but there is a further wrinkle in the ointment. The development of biological drugs makes the problem of substandards potentially far riskier — especially when it comes to similars. As the use of this type of drug increases, patients and policymakers can expect to encounter more problems with defective medicines than they did before.

Policymakers and regulators need to acknowledge the problem of substandard drugs and improve the regulation of drug manufacturing and the enforcement of good manufacturing processes. If they fail to do so, some patients who faithfully take a seemingly innocuous white pill could be doing themselves more harm than good.

Helen Disney

Before his speech, Witty told the Wall Street Journal that the cuts won’t affect GSK very much, noting that 20 percent of its profits in the poorest countries would total between GBP 1 million and GBP 2 million per year. According to the Journal, GSK’s hepatitis B, genital herpes, malaria and asthma meds will be among those hit with a price cut.

In the February issue, Pharm Exec tackled the complex issue of access, and highlighted some of the new models pharma is using to bridge the gap between wealth and health. For the story, Executive Editor Joanna Breitstein spoke with Kate Taylor, vice president of global vaccine policy at GlaxoSmithKline Biologicals, about the challenges global access poses for the pharma industry.

Click here for an edited version of the interview transcript.

If approved, the Quad would likely improve patient adherence to HIV treatment, which typically calls for a “cocktail” of three drugs, each with its own dosing requirements. Better adherence, in turn, decreases the risk of viral resistance and drug failure. The Quad would also likely shake up the market—not a first for the Foster City, CA, biotech, which was founded in 1987 during the darkest days of the AIDS epidemic.

After launching Viread (tenofovir) and Emtriva (emtricitabine)—two nucleoside/nucleotide reverse transcription inhibitors—Gilead pioneered fixed-dose HIV combinations in 2004 by combining the two molecules, and called it Truvada. Two years later, in a rare melding of two pharma competitors, the biotech partnered with Bristol-Myers Squibb to produce the first-ever three-drug HIV regimen in a one-a-day pill—a medical advance that was unimaginable a decade earlier. Atripla, which combines Truvada with BMS’s Sustiva (efavirenz), a non-nucleoside reverse transcriptase inhibitor, became the new gold standard for first time patients, with 2008 sales of $1.6 billion, up 74 percent from 2007. Truvada remains the market leader for the third year in a row, with sales up 33 percent to $2.1 billion.

The Quad appears to be the first-ever four-drug combo in any category. (There are three-drug fixed-doses in TB and malaria.) The product builds on the success of Truvada by adding to it Gilead’s two newest experimental drugs: elvitegravir, a second-in-class integrase inhibitor, and GS 9350, a compound with the ability to boost levels of integrase inhibitors (and probably protease inhibitors, still the most widely used class in HIV cocktails).

The simultaneous development of all three drugs may lead to interesting clinical and commercialization challenges. Elvitegravir is currently going head-to-head with Isentress, Merck’s breakthrough integrase inhibitor, in a Phase III non-inferiority trial in treatment-experienced patients. The Quad must pass the Phase II non-inferiority test against Atripla, which will position either the Truvada/boosted elvitegravir or the Truvada/Sustiva combo to lead the market in a few years. It’s worth noting that data suggest that black patients are at greater risk of Sustiva’s notorious central nervous system side-effects because they metabolize the drug more slowly. The right clinical results could give integrase inhibitors the edge over this first-line non-nucleoside, making the Quad a must-have for millions of Africans with HIV.

But at what price? That question will test Gilead’s talent at mixing—and mixing it up—with the feisty global AIDS treatment movement. Meanwhile, the biotech continues to enjoy outlandish sales growth (36 percent in 2008, to $5 billion), elevating this Bay Area dynamo to the top of the list of biotechs in this season of Big Pharma takeovers.

But now that the bubble has burst, pharma can expect what Russell predicted a decade ago: a more competitive industry, with greater focus on pharmacoeconomic data, ROI, and less tolerance for me-too drugs. “The economic miracle is over—there will be a struggle to survive in this industry,” he says.

Russell, a speaker at the Reuters healthcare conference today, breakfasted with Pharm Exec at the W Hotel, and offered a preview before tomorrow’s main event, the business update for its Human Genetic Therapies (HGT) business. The meeting will take place in HGT’s new Lexington, MA, headquarters, and with more than 1,000 employees (up from 300 in 2005), it will also provide a visual reminder of how this business is a growth engine for Shire.

Over the last three years, this specialty pharma company has grown and diversified both its product portfolio and geographic reach. A few years back, Adderall XR accounted for the lion’s share of Shire’s sales. But recently announced Q3 earnings show that the company has succeeded in bringing along its newest drugs—and for the first time, new product sales exceeded those of Adderall XR (and not a moment too soon, as generic Adderall arrives on the market in just six months). With almost two dozen potential launches planned for 2008-2015, Russell says the company is in “the best shape it’s ever been.” He attributes this to strong IP (even for its next-stage ADHD drug Vyvanse), a heavy focus on orphan drugs, and Shire’s litany of productive deals including Jerini.

On Tuesday, Russell will address HGT and outline Shire’s seven-year plan. (“Five years was too short, 10 too long,” says Russell.) It includes expansion into China and  a reorganization along patient lines; drugs for diseases that serve more than 50,000 patients will fall under specialty pharma head Mike Cola; smaller drugs will fit within Shire HGT, presided over by Sylvie Grégoire. Russell says this paradigm best capitalizes on the different commercialization models, enabling smaller orphan drugs to fully leverage the “advocacy-based selling model.”

But it’s not all roses for Shire. In the short-term, the company will experience a dip in sales in 2009, and possibly 2010, as it fully transitions away from Adderall XR. Perhaps a bigger issue is the biogenerics bill that’s shaping up among legislators. Russell plans to visit Washington, DC, several times over the next few months to conduct what he characterizes as much-needed education on the interaction between intellectual property and biosimilars. Right now, small molecules have 20 years of patent life, but biologics only have seven. “Without 12 or 14 years of exclusivity, it just might not warrant the investment,” says Russell. “You see the reaction when I tell people that—their eyes light up and you can tell they are beginning to understand.”

Let the emerging market come up with low-cost must-have medicines, though, and we’ll see how long the US fights to keep them out. A handful of sucessful medicines from India and China could end up doing a remarkable amount to transform the US drug industry and US drug regulation.

I finally met a pharm exec who’s pursuing that insight as a way to build his company, when Abe Abuchowski, founder and COO of Prolong Pharmaceuticals, stopped by to visit not long ago. You’ve probably heard Abe’s name already. He’s the biotech pioneer who developed the technique of attaching polyethylene glycol (PEG) to protein-based drugs. PEGylation, the subject of Abuchowski’s thesis at Rutgers back in 1971, proved to be an effective way to reduce the immunogenecity of biotech drugs and to increase the amount of time they remained in the body, and it’s gone on to become one of the field’s gold-standard technologies.

Abuchowski himself went on to found Enzon (starting with just half a dozen people in 1983), which he developed into a fuly integrated company. “We had to,” he says. “At the time you couldn’t just hire services like toxicology.” Enzon’s pegylation technology led to several important products, including Adagen (pegylated adenosine deaminase, for severe combined immune deficiency disease, just the fifth biotech product to win FDA approval), Oncospar (pegaspargase for certain cancers), and the blockbuster PegIntron (pegylated interferon A, for Hepatitis C, developed with Schering Plough and approved in 2001).

With PegIntron, Enzon was profitable, but it turned away from pegylation, leaving the field to Nektar. (The company announced earlier this week that it was considering divesting itself of its biotech business.) Abuchowski, meanwhile, had left in 1996, spending more than a decade as a stay-at-home dad and part-time consultant. He never lost the entrepreneurial urge, though, and in 2005 launched Prolong. (The name refers in part to the way that pegylation prolongs the time a protein spends in the body.)

The new company’s strategy is to develop patented, second-generation biotech products in India and China, using Prolong’s expertise in pegylation (which Abuchowski says is not part of the Indian/Chinese biotech arsenal) and to partner with companies able to manufacture at low cost.

Low-hanging fruit is the name of his game. Within the past month or so, Prolong announced a partnership with Zydus Cadila, one of India’s 30,000 biotechs, to produce a pegylated erythropoietin (an anti-anemia drug in the same class as Amgen’s Epogen and J&J’s Procri) and another deal is in the works in India for a pegylated granulocyte colony-stimulating factor (GCSF) drug, similar to Amgen’s Neupogen. When last I spoke with Abuchowski, he was just back from China, where he formed a tentative agreement with a biotech company over one, or possibly two, products.

“All the modern technology we have here they are copying,” says Abuchoswki. “All the first generation of biotech products are being made there and brought into the marketplace. The benefit is that they are starting with scientific knowledge that is mature rather than developing that knowledge from scratch. They have the benefit of waiting for 20 years, then building the most modern facilities with the cheapest labor and developing these products at the lowest cost possible. There are an unbelievable nmber of biotech companies, and being able to link up with a company like ours will allow them to differentiate themselves from the others in the ferocious competition that goes on there.”

Expect an announcement soon. In the meantime, more news from Prolong:
The company has just received a grant from the National Heart Lung and Blood Institute to supply Prolong’s developmental blood replacement product (which, not surprisingly, is based on pegylated hemoglobin) for researchers in such areas as combat surgery.

“It’s exciting to us because it changes the dynamic of the company,” says Abuchowski. “Instead of raising money to test our product, we can sell it to the research community while still working on it as a product, and make a little money on it. And researchers will find new uses for it. We hope that various branches of the military will want to buy it for their own application.”