With an all-important FDA decision on carfilzomib scheduled for July 27, Onyx hopes to graduate to the next stage of commercial success. For a feature-length profile of Onyx and CEO Tony Coles, click here.

Onyx Pharmaceuticals CEO Tony Coles

Following on a strong 4Q report, Onyx Pharmaceuticals’ CEO Tony Coles said the company hopes to transform itself from a one-product company to a three-product company, covering seven types of cancer, by the end of 2012.

On the February 22 full-year and 4Q earnings call, Coles described Onyx’s Nexavar-related cash flow as the impetus for transformation, and the patron of strategic investment in the company’s proteasome inhibitor franchise, which includes carfilzomib. At the end of 2011, the company had roughly $668 million cash on hand.

The regulatory pathway for carfilzomib – a small molecule drug (administered via infusion) in development for multiple myeloma and solid tumors – hinges on FDA’s July 27 PDUFA date, which will determine whether or not carfilzomib is eligible for accelerated approval. The company is already focusing on “launch readiness,” which includes the development of coverage and reimbursement strategies, as well as patient support materials, said Helen Torley, EVP and chief commercial officer, on the call. Onyx also hired a reimbursement and access team in Europe “to prepare for approval.” Torley said carfilzomib could be an over $2 billion opportunity for Onyx.

Through a partnership with the Multiple Myeloma Research Foundation, Onyx launched an expanded access program for carfilzomib last August. The initial target enrollment for the program was set at 250, and the program is currently “over-enrolled,” said Coles on the earnings call. “Take that as a good sign…of support from the clinical community for carfilzomib.”

In a discussion on the company’s plans to test carfilzomib head-to-head against Takeda/Millennium’s Velcade in a new trial, slated to begin this year, Ted Love, Onyx’s EVP, R&D and technical operations, said the company expects to “take a higher dose of carfilzomib” into the main event bout with Velcade, a blockbuster multiple myeloma drug that picked up an approval for subcutaneous administration in January (Velcade was approved as an infusion in 2003). Love is retiring in August.

Onyx’s financial results drew praise from analysts on the earnings call; Nexavar turned blockbuster in 2011, through an 8% increase in sales. In the US, Nexavar, a liver and kidney cancer drug, got a 2% price increase in 3Q 2011, and 3.5% increase this month.

Beyond building Nexavar and hoping for a positive FDA action on carfilzomib, Onyx has “renegotiated and expanded” its partnership with Bayer on Nexavar and regorafenib, the latter a colon cancer drug expected to be filed with FDA by the end of June. If regorafenib is approved, Onyx stands to collect a 20% royalty fee on sales, under the new Bayer agreement, said Coles on the call.

The decentralized approach to product commercialization, which puts global headquarters in the role of “coach for the affiliate,” represents a corporate rethinking, although the pendulum tends to swing from centralized to decentralized (and back) over time, said S. Michael Harrill, Lilly’s global brand director, neuroscience, during a presentation yesterday. “We’re now in decentralized mode, which is a big difference from five years ago,” said Harrill.

As such, global headquarters and affiliates do their own market research prior to launch; the former does not necessarily guide the latter. Prior to a global launch, companies are understandably “working with incomplete data,” although Harrill says Lilly is “investing heavily in market research, and will do even more” in the future. But it’s important for affiliates to conduct their own research, rather than cribbing exclusively from headquarters’ intel, “so it’s not supposition on top of supposition,” said Harrill. Allowing affiliates a degree of independence lets them adapt to the situation more quickly, he said.

In pre-launch, Harrill emphasized the importance of ‘PRA,’ or pricing, reimbursement and access issues, and anticipating payers’ needs. “Ten years ago, we were creating a pricing value and access notebook too late, around phase 3, but now that happens much earlier,” he said. Other pre-launch activities include an understanding of the patient journey – a “new moniker” at Lilly – as well as key player segmentation, competitive activities assessment, tracking and influencing environmental issues (SWOT analyses, for example), creation of HCP and patient education materials and brand certification training.

In the peri-launch phase, Harrill said key roles include tracking and influencing an affiliate’s operating expenses, coordinating global manufacturing supplies, insuring PR and patient advocacy plans are in place, conducting launch preparedness assessments, and updating the global brand strategy.

In the post-launch phase, the old rule of thumb – at eight months, it’s possible to get a pretty good idea of a product’s trajectory – isn’t appropriate anymore, said Harrill. “Delays in access, REMS, and other issues have lengthened the front end of uptake…there are often six or 12-month delays in access.” Building on that thought, Harrill said the sales rep to PRA personnel ratio is “out of balance.” He cited the fact that Lilly has only four PRA managers in Italy, in neuroscience. “When you think about the number of accounts in Italy, that’s mind-boggling,” said Harrill. In Italy, marketers could end up “sitting there twiddling their thumbs while four PRAs get access in the 12 provinces you’re counting on.” Harrill also acknowledged rising commercialization costs and shorter net exclusivity periods, and faster uptake of generic products upon expiry, to underscore the need for organizations to “look for what the payer wants, early.”

Harrill’s comments were delivered at CBI’s 2^nd Annual Commercialization and Market Access Congress, in Philadelphia, on December 6. CBI is a subsidiary of Advanstar, publisher of PharmExec.

At first blush, a system whereby countries or geographic areas are carved out along socioeconomic lines maximizes profit: prices are set according to consumers’ “willingness or ability to pay,” which can bring previously unaffordable treatments into use. However, a tiered price can work against local competition in a given area, which tends to deliver a lower sustainable price over the long term, according to a critical analysis of tiered pricing done by authors from Medecins Sans Frontieres and Harvard School of Public Health.

Of the case studies examined in the report, Abbott’s price for the HIV treatment lopinavir and ritonavir (LPV/r) remained at $500 in African countries and other “least developed countries” from 2002 to 2007, or until the Clinton HIV/AIDS Initiative announced a generic LPV/r for $470. Abbott then reduced its price to $440, suggesting that manufacturers “do not have strong incentives to reduce tiered prices in the absence of competition, nor are tiered prices immune to competition when it does arise,” according to the report.

In the case of Bristol-Myers Squibb’s antiretroviral (ARV) treatment for HIV, the company created a Category 1 tier including 57 primarily low-income and African countries, but excluding southern African countries, which were lumped into a higher income Category 2. Southern Africa has the highest HIV-prevalence rates in the world, and the impact of a Category 2 placement means that BMS “prices its important second-line drug atazanavir 25% higher, at $547, in southern Africa, compared with $412 in other [Category 1] countries where HIV prevalence is lower, and in a few cases, income is higher,” the report found.

In the case of Lilly’s drug-resistant TB products capreomycin and cycloserine, however, tiered pricing did work to create lower prices than competitive production, but there were special circumstances. For example, TB endemic countries participating in the “preferential price” scheme facilitated by the WHO Green Light Committee beginning in 2002 – a program that also transferred technology to local generics manufacturers in support of local production – did not see a cheaper generic reach the market. In the case of capreomycin, no generic products were WHO pre-qualified for use as of September 2011, and cycloserine had gone up in price by a multiple of four, after Lilly stopped producing the drug. Lilly’s tiered pricing did in fact keep prices at the lowest rates, although demand was low and production capacity was limited.

“Tiered pricing does not necessarily result in the lowest sustainable prices, nor does it reliably lead to price reductions over time,” the report’s authors conclude. “In comparison, when markets are sufficiently large and multiple sources of production exist, robust competition has consistently proven across different therapeutic areas to result in lower prices.” Tiered pricing also leaves “too little decision-making power to governments, which are accountable to their populations under international law for insuring access to medicines.”

Countries that aren’t strong negotiators, and can’t convincingly threaten compulsory licensing, for example, get the short end of the stick with tiered pricing. In 2006, Honduras purchased LPV/r for about six times more than Brazil paid, despite the fact that HIV rates are equivalent in both countries, and Honduras per capita gross national income is roughly 25% of Brazil’s. To create a truly “win-win” situation for manufacturers and patients, governments and manufacturers will need to consider new models that “de-link” medicine prices from R&D costs. How countries contribute to R&D financing as a global public good will influence the new models that help to bring new medicines to the most needy.

Back in August, before there was any mainstream media coverage of the movement, Occupy Wall Street (OWS) cited Franklin Delano Roosevelt’s Economic Bill of Rights speech on one of its websites, which includes the “right to adequate medical care and the opportunity to achieve and enjoy good health.” To the pharmaceutical companies with headquarters in the tri-state area: why not send a few boxes of provisions to the demonstrators? Not prescription drugs, of course, but OTC products like Band-Aids, Neosporin and tampons (Johnson & Johnson), and Advil, Robitussin and ChapStick (Pfizer).

Pharmaceutical companies complain, rightly sometimes, that they aren’t duly recognized for the community service and philanthropic efforts they provide and support, outside of core business operations. Industry’s current reputation may be slightly “above Congress and tobacco,” as Pfizer CEO Ian Read recently put it, but that isn’t saying much. Pfizer headquarters is a subway ride away – without the need to change trains – from Zuccotti Park. Johnson & Johnson likes to talk about the clear social benefit its products have provided over the years, but here is a chance to bandage the cuts and scrapes of an active and visible community. It’s a PR play, but one that isn’t damaged by its transparency. Given J&J’s ongoing manufacturing difficulties, and Pfizer’s ongoing promotional missteps, both companies could use a reputational lift.

From an OWS perspective, companies like Pfizer and Johnson & Johnson represent a scientific vehicle fueled primarily by commercial interests, without seat belts or airbags; the humanistic objectives of most pharmaceutical scientists get left by the wayside. Executive compensation at top pharmas, in the context of plant closures in the U.S., is also a point of contention. Despite this perspective, a goodly portion of the demonstrators, not to mention their families and friends, have probably depended on medicines produced by one of these two companies, at one time or another. The question is, would OWS be willing to accept a gift of bandages, pain relievers, decongestants and other products from pharma, to aid in the struggle against the elements? My guess is that they would, and that they would be grateful. It wouldn’t hurt to ask. Perhaps the question can be put to the General Assembly, for a consensus vote.

Regardless of whether you believe access to adequate medical care is a right or a privilege, what would be lost by donating a few boxes of Dr. Scholl’s to OWS, Merck? The Congressional Budget Office’s October report on income growth (1979-2007) makes it more difficult for political pundits to continue saying they don’t understand what the OWS message is, or why these demonstrations are occurring (full CBO report here). Gifting medical supplies to protesters accomplishes PR goals, and it aids those demonstrators willing to stand and sleep outside for a cause they believe will help make America a stronger, more equitable place to live and work.

Pfizer, J&J, Merck and others, will you step up? Anyone own a subsidiary that makes hand warmers?

A repeat of the survey, released last week, found that regulatory and compliance issues had jumped to 16% as a driver for new technology adoption. As a motivation for business model or process change, the percentage of respondents citing regulatory and compliance issues (13%) more than doubled this year.

While executive management and strategic planning still represent the top two influences with respect to new technology adoption and changes to business operations, respectively, both categories decreased significantly from last year.

“Spending at pharmaceutical companies is shifting to compliance,” said Angela Miccoli, Cegedim’s president, North America, during a presentation on the data.

Asked about the biggest changes companies are making, 73% cited an increased focus on market access strategies; 63% cited an increased focus on managed markets; and 59% cited a realignment of primary sales forces.

The survey was conducted online, mostly among pharmaceutical executives, managers and directors in sales, marketing, general management and regulatory departments.

Robert Epstein, chief clinical research and development officer at Medco, said too often pharmaceutical companies “show up in the middle of Phase III with a half-baked cake,” which inevitably raises questions. “What about sub-populations with side effects? What about an additional endpoint, an observational study or comparative information?” asked Epstein.

In response, panel moderator Richard Pasternak, an associate professor at Harvard Medical School and a former Merck VP, said “payers aren’t interested in early stage research, and pharma isn’t set up to listen to them.” Barry Gertz, SVP and head of clinical research and regulatory affairs at Merck, suggested that despite regulations and other challenges, “We have to force that dialogue to occur. The mechanisms haven’t evolved to include the needed communications, and the structure for payer/pharma communications.”

Epstein said R&D departments – not marketing departments – should be in direct contact with payers at the very earliest stages of development. Researchers, after all, are “more candid,” and they “ask the right questions.” Roger Longman, founder of Windhover Information and CEO at Real Endpoints, said Medco may be interested in early stage communications with pharmaceutical researchers, but “other payers aren’t, and R&D [researchers] aren’t.” R&D departments “are marketing-driven,” and health insurance payers have “very little incentive to dialogue with pharma early on,” said Longman. “Insurance companies wait and then say you don’t have the right data, we’re going to screw down the price, and government is banned from using cost effectiveness to determine how much it will pay” for a drug. Longman cited Italy as the “most aggressive” geography for value-based agreements involving payers in the drug development process. In Italy, “you have a drug, you bring it to a payer, an endpoint is identified, and if you meet the endpoint, you get paid,” he said.

Peter Pitts, president of the Center for Medicine in the Public Interest, wondered which R&D groups would be available for speaking with payers. “Are we talking about the Quintiles of the world? Who, inside pharmaceutical organizations, is left to think about clinical trial designs?” asked Pitts, somewhat rhetorically.

Regardless of what endpoints are pursued in clinical trials, Epstein said comparing a drug to placebo, as opposed to a comparable therapeutic product, “doesn’t work for us.” He cited a JAMA article published last May, finding that over “50% of all new drugs” approved by FDA come with comparative effectiveness data. The study also found that more than two-thirds of new molecular entities recently approved in therapeutic categories where alternative treatment options exist contain comparative effectiveness data.

The panel, titled “What is ‘Value’ and How Can it be Measured and Demonstrated in Therapeutic Innovations,” was part of a forum associated with the Galien Foundation’s Prix Galien ceremony, held last night in New York City. Prix Galien winners this year included Janssen’s (J&J) Stelara and Amgen’s Prolia, for best biotechnology products, and Pfizer’s Prevnar 13, for best medical agent.

“Perception of value drives the willingness to pay, and those perceptions vary from country to country,” said Adam Woodrow, vice president of Pfizer’s specialty care business unit, at a marketing and strategy forum hosted by Simon-Kucher & Partners. “We need to do a much better job communicating value to payers, and that means knowing what turns the payer on,” said Woodrow.

In a global environment where “a simple slip up in one country” can mean losing “half a billion dollars overnight,” – due to the widespread adoption of cross-country reference pricing in Europe, Asia and elsewhere – drug companies need to send a consistent message to stakeholders, said Woodrow. Payers often speak with physicians, for example, when evaluating a product for reimbursement; if sales reps are out saying one thing to doctors, and payers are hearing something else, that disconnect could translate into a less than ideal reimbursement decision.

Patient groups and associations represent another way to boost the perception of value on a given drug, said Woodrow. “Patient groups can be incredibly powerful” in gaining reimbursement, he said, citing the World Federation of Hemophilia as one particularly strong organization. “Hemophilia drugs are reimbursed almost across the board,” due in no small part to governments being pressured by patients, said Woodrow. “We have to be very careful about how we interact with patient groups.”

Woodrow, who jokingly referred to the UK’s National Institute for Health and Clinical Excellence (NICE) as NICER – “No, I Can’t Expect Reimbursement” – said Big Pharma has “failed to communicate value properly, but let’s be real: half the drugs are me-too, so there is no value. We have to begin [the clinical process] with a truly different value proposition” that recognizes the payer’s needs and perception of value, and brings patient advocacy groups on board.

The New York City Life Sciences Marketing & Strategy Forum was held yesterday in Manhattan.

To expedite distribution, and to make sure educational initiatives – under  Risk Evaluation and Mitigation Strategies (REMS) requirements, and otherwise – are being met, AstraZeneca signed a deal with Biologics, an oncology management company, to distribute vandetanib exclusively through Biologics’ specialty pharmacy. Financial terms of the deal were not disclosed.

Approved in the US on April 6, vandetanib is an orphan drug indicated for the treatment of medullary thyroid cancer that can’t be removed by surgery, or that has spread to other parts of the body. In the US, somewhere between 500 and 1,000 patients, approximately, have this rare form of cancer, according to Dan Duffy, executive VP and general manager, oncology pharmacy services group, at Biologics. FDA puts the number at 1,300 to 2,200 in 2010, according to a release.

Biologics is tasked with managing vandetanib’s REMS requirements (only REMS-certified pharmacists are allowed to dispense the drug) in addition to working with payers and consolidating referral sources. Ten nurse liaisons are “going out to educate the physician and clinical staff about program specifics, how to make it efficient for them, and to ease the administrative burden for the physician,” said Duffy. For patients, the company expedites available copay assistance, with a focus on rapid turn-around times. Without insurance, a 30-day supply of 300 mg vandetanib, taken once daily, costs $10,454.00, according to an employee in Biologics specialty pharmacy. Patients without insurance may be elligible to recieve the drug at no cost, through AstraZeneca’s prescription savings program, according to Laura Woodin, a spokesperson at AstraZeneca. In clinical trials, vandetanib was “shown to affect the electrical activity of the heart, which in some cases can cause irregular heart beats that could lead to death,” hence the REMS, said FDA, in the release.

Woodin said in an email that the company’s exclusive distribution arrangement with Biologics is “a new approach for our US business…vandetanib is also the first treatment that AstraZeneca has developed and brought to market under orphan drug designation in the US.” Woodin said the small patient population for vandetanib was a major factor in signing the exclusive distribution deal. Duffy said the agreement lets AstraZenca “standardize the distribution channel and really control it.”

Vandetanib doesn’t currently have a brand name; AstraZeneca requested Zactima, but FDA did not accept that name, said Woodin. The company is currently in talks with FDA about a new name.

While intellectual property (IP) protections and the Chinese government’s willingness to pay for expensive new products represent two large and lingering question marks, Joe Panetta, president and CEO at BIOCOM, said his last trip to China was surprising.

“We visited one of the largest pharmaceutical companies in China – Yangtze River Pharmaceuticals – which is pretty strongly government-backed and which has been long known to be a generics and traditional Chinese medicine company,” said Panetta, noting a statue of Mao Zedong in the company’s courtyard. “When I got there, not only did I see their long-established generics manufacturing facilities, but I also saw their 14- and 10-story innovative research towers that are under construction. They assured me that the future for them is not in generics, and the CEO said clearly to us: ‘I want to meet companies in San Diego, and I want to access new therapies that we can commercialize here.’”

Panetta said a portion of China’s population – by some estimates a portion as large as the total US population, according to Panetta – is becoming increasingly affluent, and has the “desire to access new therapies as well as the means to access new therapies.”

Despite a rising tide of affluence in major cities, many people living in China’s outer provinces are still in need of basic medical services, a problem China’s ambitious, $125 billion health reform initiative hopes to alleviate. “First they have to build delivery centers, and [the Chinese government] is talking about building hundreds of hospitals and thousands of clinics throughout the provinces in China, and they have to first deliver basic therapies and diagnostics and devices, but the question is how soon will it be before the government begins to take an interest in more innovative technologies,” said Panetta. “They have a long way to go, but to me, what that says is that there’s a lot of opportunity for a long time in China.”

The best way to enter the Chinese market is through partnerships, said Panetta, citing talks with companies residing in “large biotech parks in Shanghai and Beijing, and the China Medical City that’s being built from the ground up in Taizhou,” as well as US and European pharmaceutical companies that have a presence in China. “The Chinese would love for our companies to go over there and set up shop,” said Panetta. “What they tell us is that they want to learn how to innovate…I think the payback for our companies is clearly the 1.3 billion person market in China.”

BIOCOM hopes to facilitate partnerships with Chinese companies through conferences and trips to China, in order to “understand who we can build relationships with, what those relationships need to look like, and where we can build those relationships,” said Panetta. “[US] companies need to be careful about how much of their intellectual property they take to China when they create partnerships, and how much they keep [in the US],” said Panetta, and concerns remain about the level of talent and skill that exists, beyond the research level. “Several years ago, the discussion on Asia tended to gravitate toward outsourcing, low-cost research and low-cost early stage discovery efforts,” said Panetta. “That’s changed pretty drastically. It’s a terrific opportunity four our life sciences industry in Southern California,” he said.

Billed as the first Chinese product development partnership (PDP), the Global Health R&D Center of China (GHRC) hopes to discover and develop new treatments for tuberculosis (TB) and other diseases by collaborating with pharmaceutical companies, the Chinese government, academic institutions and other groups, according to a statement.

The GHRC was created through a partnership between The International Scientific Exchange Foundation of China (ISEFC), a translational sciences group, and the TB Alliance, a not-for-profit organization focused on developing new and better TB medications.

Mel Spigelman, president and CEO of the TB Alliance, said in an email that pharmaceutical companies stand to gain from sharing resources, such as intellectual property, with the GHRC. “The GHRC will offer companies financial and world-class discovery and clinical development resources to advance compounds for neglected diseases that they otherwise may not be able to [develop] on their own,” said Spigelman. “In addition, companies will establish strong working relationships with key discovery, regulatory, and clinical resources in the fastest-growing pharmaceutical market in the world.”

The TB Alliance has drug development partnerships with AstraZeneca, Bayer, GSK, Novartis, Sanofi-Aventis, and Tibotec, and is currently managing three drug candidates in clinical trials, according to organization’s website. Spigelman declined to specify which compounds the TB Alliance itself will contribute to the GHRC.

“The vision of the GHRC is to focus on translational medicine for public health and bridge the innovation gap that currently exists into new treatments and cures,” said Geng Jianyue, secretary-general assistant of the ISEFC, in a statement. In China alone, some 1.3 million people develop active TB annually, and 150,000 die from the disease each year, according to the TB Alliance.

A recent World Health Organization (WHO) report found that only a 10% of the multidrug-resistant tuberculosis (MDR-TB) cases identified globally received treatment in 2009. The WHO report called multidrug-resistant and extensively drug-resistant tuberculosis a global epidemic, and TB in general kills almost 2 million people each year, according to the TB Alliance. The announcement of the GHRC coincides with World TB Day, which is celebrated on March 24 each year, to commemorate Robert Koch’s discovery of TB bacillus, the cause of the disease.

While access to treatment remains a major problem in many of the 27 countries most burdened with MDR-TB, the treatments themselves, many over forty years old, present further difficulties, since first-line drugs like isoniazid, ethambutol, pyrazinamide and rifampin require a six to nine month regimen. Failure to adhere to a treatment regimen can result in drug resistant strains of TB, which require second-line drugs, many with severe side effects.

In addition to developing new TB treatments and addressing other public health diseases in China, the GHRC will also develop compounds for the rest of the developing world, according to Spigelman. “Global development programs will likely be partnered with disease-specific PDPs or with global pharmaceutical companies, who will then work with GHRC to register the compounds throughout the world,” he said.