Antiretroviral sales in 2009 were estimated at $11.8 billion. While that figure is forecast to hit $14.4 billion in the next ten years, the number of drugs exceeding $400 million in annual sales is expected to drop from 10 to just six due, in part, to the strength of cross-class, fixed-dose combination (FDC) treatments.

FDC regimens replace the drug cocktails that patients have relied on for years. First out of the gate was Gilead Sciences’ and Bristol-Myers Squibb’s Atripla, which raked in $2.3 billion in sales in 2009, claiming 19 percent of the HIV market. The drug’s market share is so dominant that companies that aren’t trying to compete with this type of drug will probably be in trouble.

Besides Atripla, Truvada/rilpivirine and the Quad pill are being tagged as major HIV players when they launch in the next few years. “Atripla has been hugely successful, and we believe that follow-up FDCs will be just as successful, if not more,” said Hedwig Kresse, head of Vaccines & Infectious Diseases, Datamonitor.

Kresse said that pharma companies that sell HIV drugs but don’t have a combination treatment in their portfolio are going to have a tough time penetrating the market or keeping share in the market

“One example that shows that the market is getting tougher is Avexa’s apricitabine, which was discontinued by the company because it couldn’t find a development partner despite significant results in efficacy trials,” said Nele Jensen, associate analyst, Datamonitor.

Merck-Schering-Plough faced similar problems with its CCR5 inhibitor, vicriviroc, after the treatment failed to meet end points in late-stage trials.

Reimbursement is also becoming an issue in light of the push for restricted healthcare spending in many countries. Traditionally, drug combinations were priced as the sum of the single agents. But with mandatory discounts on the way, pricing for HIV treatments will become a challenging environment, Jensen said.

The only single-pipeline agent predicted to be a success is Shionogi & Co and ViiV Healthcare’s integrase inhibitor S/GSK1349572, which has shown positive Phase II results.

“HIV is a very sizeable market, and it’s a market that has been growing for the past decade,” Kresse said. “And for now, it’s a chronic market. You maintain patients for a very long period, which gives you a relatively stable revenue stream for good and efficacious drugs. But it’s getting harder to differentiate your drugs from the competition. And in light of the dominance of fixed-drug combinations, I think it won’t become an easier environment in the next decade—I think it will become tougher.”

The Center for Business Intelligence, on Monday, revealed winners of its annual Strategic Patient Adherence Awards as part of its two-day conference about patient compliance with their drug regiments.

This year’s award winners are:

• Best Integrated Program—Shire Pharmaceuticals: FOSRENOL ON TRACK Direct To Patient Support Program
• Best Disease State Program—BMS/Sanofi-Aventis Canada & Rx Canada: My Plavix Partner Program
• Scientific Excellence Award—Merck: Medication Non-Fulfillment Rates and Reasons:  Systematic Review
• Innovation Award #1—Kaiser Permanente: B-Smart Program
• Innovation Award #2—Pfizer/Walgreens Patient Adherence Collaboration Project

Pharm Exec chatted with Robert Nauman, one of the judges and principal at Biopharma Advisors to find out more about the state of adherence programs in the drug industry.

Where is industry at right now with regard to adherence programs?

The pharma industry is at a point where they are falling behind other channels within the healthcare space in being able to provide adherence programs. The industry has never been very customer-centric over the past 15 years. They tried it, but struggled with customer-based programs.

That’s partly because their model is built around generating medical content. But that content is highly regulated. Today’s patients have very specific information needs, and we are seeing a trend towards behavioral-specific content that would move the needle for a particular patient.

Isn’t that positive for industry and patients?

Yes, but pharma is having a tough time getting behavioral-specific content through the FDA regulatory review process through a drug company. A lot of the adherence initiatives that are going on are marginally effective for two reasons. One, the content isn’t really valued by the end user; and secondly, none of them have been able to build programs of significant scale at this point in time. No one has ever reached a million patients through an adherence program. Some of these therapies have millions of patients on these drugs, but only register 15,000 people in the programs.

Are there any leaders in the area?

Healthcare providers like Kaiser, Partners Health, and MEDCO are really picking the ball up and running with it. Industries role is being relegated to a second string player. Also, I think collaboration/integration was a clear theme with all the award winners.

Shire’s On Track program was an integration of a lot of different marketing efforts that were designed as a multi-channel approach to improving adherence. It included targeted mailings, pharmacy letters, and a financial assistance program—all integrated in under an umbrella of a patient-support program that offered soup-to-nuts patient support.

There were a number of Canadian nominations this year; the Canadian branches of Bristol-Myers Squibb and Sanofi-Aventis won best disease state program. Is this trend telling?

This says something to the larger companies that tend to silo different patient initiatives and don’t tie them together. Because Canadian healthcare is national in scope, the programs they have must work together.

Can you talk a bit about the innovation awards?

The innovation awards were given to companies that we felt were fairly unique in some particular aspect of what they were doing. Maybe they didn’t fit into the criteria we were looking at in terms of best disease state program or best branded, but it helped evolve how we will look at entries in the future.

For example, Kaiser Permanente has a program that trains physicians and developed a process by which they could identify and target non-adherent patients for specific adherence interventions within the Kaiser Permanente system. They rolled this program out into their group in Southern California and had a significant impact in adherence rates in the patients that they ran through the program.

Why did you choose the collaboration between Pfizer and Walgreens?

Our second innovation award went to the Pfizer/Walgreens, which was interesting because Pfizer invested in the program but was completely hands-off and didn’t control it. It was Walgreens that made the investment to retrain its people to do motivational interviewing at the pharmacy counter. Rather than ask if a customer has any questions about a treatment, the pharmacist helps coach the customer about their disease and why it’s important to take his or her medication.

The program has shown an increase in adherence by 47 percent over the test group and proves that personalized interactions work.

Do you see things moving in the right direction?

I do, I just don’t think they are moving fast enough. There is also a rationale that industry shouldn’t be the only one paying for these programs, because adherence isn’t just a brand problem. One of the things we brought up at the conference was the concern over who will pay for these programs. Almost 75 percent of the medications dispensed today are generics and that is only going to grow. It shouldn’t just be pharma’s responsibility.

“AstraZeneca is making changes to our sales force, which will be managed first by looking at vacancies and offering field sales employees the opportunity to self-identify whether they are interested in leaving the company,” a company spokesperson stated in an email. “We will know the full scope of the changes in the coming weeks.”

The strategy is similar to the move made earlier this year by US automakers to reduce their work force. However, it seems that AZ is looking to thin its ranks to compensate for loss of patent exclusivity rather than find more affordable help. The question is: What happens if the buyout quota isn’t met? Currently, only AZ executives know—and they aren’t talking. 

Meanwhile, local press in Indiana is reporting that Bristol-Myers Squibb filed paperwork stating it will close its Evansville, IL, plant and lay off 113 employees at that location and one other facility. The Courier Press of Evansville wrote that job losses would include 57 production operators in Evansville and 14 team leaders in both Evansville and Mount Vernon.

Pfizer is also being tight lipped about pending layoffs, but did reveal changes it’s making to existing facilities. According to a letter sent to employees, the company intends to keep its New York headquarters intact, while its Madison location will become the leadership center for the diversified businesses, animal health, consumer healthcare, and a few other units. Pfizer plans to close its Bridgewater, NJ, facility and Wyeth’s Great Valley, PA, campus by mid-2010. The Morris Plains, NJ, facility is still under review, and Wyeth’s Collegeville, PA, location will serve as the leadership center for the new specialty care business unit.

“It’s important for all colleagues to note that the location of a leadership center for a particular business unit does not require all colleagues working in that business to be located at the same facility,” Pfizer CFO Frank D’Amelio stated in the letter. “Rather, over the course of the next several weeks, each business will be determining the best location for each colleague, and managers will soon begin having individual conversations with colleagues impacted by these decisions.”

“Pen-ance: Bristol-Myers Exec Gets Two Years of Hard Writing,” The Wall Street Journal Law Blog titled its piece.

“Call him the homework judge, not the hanging judge,” reads The New York Times’ lede. The paper goes on to note that “this is not the first time Judge Urbina has demanded written penance” in white-collar crime cases.

The jokiness is apt. The BMS-Apotex case set a comically new record for deception and incompetence ever for Big Pharma—making then–BMS CEO Peter Dolan, whose plush Park Avenue office was turned upside down during a very public FBI visit, a poster boy for industry bad behavior. The case itself was settled in 2007, with BMS pleading guilty to two counts of making false statements to the antitrust probers and paying the maximum fine, $1 million.

Yet Bodnar, Dolan’s hand-picked negotiator in the secret deal it had cut—and then bungled big time—with Apotex to delay knockoffs of the megabluckbuster bloodthinner, remained a loose end. Flash-forward to yesterday, when Urbina, tied him up quite nicely, sentencing Bodnar, who had pleaded guilty to a single count of making a false statement, to pay a $5,000 fine, serve two years’ probation—and produce a book about his descent into crime.

“I would like to see you write a book” so other people “don’t find themselves in a similar situation,” Urbina told Bodnar. “Who knows, it may even be inspirational.”

For all the humor, however, the judge may not be entirely joking. After all, the presumption that lessons can be learned by pharma’s new generation of leaders from an honest accounting of the BMS-Apotex misadventure isn’t as quirky as it may seem. (For a memory-refresher on the truly bizarre twists and turns, BNET Pharma’s Jim Edwards can’t be beat.)

Of course, whether Bodnar is up to the task is another question. His attorney was reported by Bloomberg as saying that Bodnar “is ‘gratified’ that the matter has been put behind him.”

Peter Dolan, who got tossed from BMS with a $10 million golden parachute, is probably hoping that’s exactly where the matter stays.

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.

Lilly broke the news Monday morning that ImClone had accepted its offer to acquire the biotech firm for $6.5 billion or $70 per share—Lilly’s largest acquisition ever.

With this purchase Lilly gains control of ImClone’s blockbuster, targeted cancer agent Erbitux, which is marketed for second- and third-line colon cancer and refractory head and neck cancer.

ImClone also has five monoclonal antibodies in clinical development—including one in Phase III and two currently moving out of Phase II trials. The acquisition will help Lilly meet the challenge of patent expiration that it will see in the next decade and bolster its 13 oncology drugs currently in development.

One sticking point will be how the deal affects ImClone’s co-marketing pact with Bristol-Myers Squibb in the United States. BMS currently pays a 39 percent distribution fee to ImClone for Erbitux and owns 17 percent of ImClone stock. In an investor call this morning, Lilly said it could not comment on the situation.

Last month, BMS offered $4.5 billion for ImClone. ImClone chairman Carl Icahn shot down the offer stating that it undervalued the company and that a second mystery suitor had made an offer for $70 per share. After more than a week of whispers and second-guessing, Lilly announced that the boards of both companies have approved a definitive merger agreement.

Lilly expects the income stream of Erbitux and the success of one additional drug to cover the cost of ImClone. The company will cover the cost with a combination of cash and debt.

Moody’s Investors Service announced this morning that it was considering the possibility of lowering Lilly’s Aa3 long-term debt rating (the company’s Prime-1 short-term rating would remain unchanged).

“The long-term success of the acquisition will be dependent on receiving expanded approvals for Erbitux as well as favorable execution of other products in ImClone’s pipeline, both of which remain uncertain at this time,” stated Michael Levesque, Moody’s senior vice president.