Thirty years is a long time in any industry. The coalmining industry, the market for air travel, or telecommunications and computing technologies each offer compelling demonstrations of how much can change in such a short period. Few market leaders in those sectors have survived.

Against that background, the pharmaceutical industry has done pretty well over the last thirty years — and so have many of its players. Eli Lilly, Pfizer, Boehringer Ingelheim, Hoffman-La Roche, Merck Sharpe and Dohme — all were big beasts, and they still are. The industry was one of the darlings of the investment community back then, and still today it is seen as one of the safer counter-cyclical havens. And the industry’s enduring qualities as a powerhouse of scientific advance and a generator of high-quality jobs and exports continue to assure drug firms of sympathetic ears in many of the corridors of power.

Survival has, however, been very much the prize of the fittest. In a world grown harshly competitive, many firms have fallen by the wayside, been trampled underfoot, or have simply been lost without trace. Three decades of successive concentrations have thinned the ranks of the industry to a mere shadow of its former self. The roll-call of once-illustrious names has been abbreviated by bankruptcy, mergers and acquisitions. Who now recalls Richardson, which merged with Merrell before being taken over by Dow? There are many working in the industry today who are unaware that a proudly independent Beecham – with its breakthrough work on antibiotics – merged with SmithKline and French before its name was obliterated altogher from the marquee when Glaxo took over the entire operation. The French industry was dominated by Rhône Poulenc and Rousel Uclaf when Sanofi was still a struggling adolescent.

The relentless search for efficiencies, for leaner management, for shareholder value, and for  market share has hit the pharma sector hard. Gone are many of the notorious extravagances of the past. Product launches on the Orient Express or on yachts in the Mediterranean attracted hostility and accusations of a greater focus on marketing than on research. Armies of highly organised sales forces provoked questions among the sceptical about how much success had come to depend on science, and how much on subversion. The rise of a new and assertive form of consumer activism in the 1980s found ample fuel here, and prompted deeper soul-searching among the organisations that were paying for medicines — the consequences of which are still being played out today.

Major advances in diagnosis and treatment (AIDS was an ill-understood but fatal condition in the 1980s) tend to obscure the fact that it is some thirty years since the first blockbuster medicines emerged. Huge optimism was created by the revenues from innovations like cimetidine and ranitidine. But the resulting search for world-beating products not only led to some revolutionary earnings by revolutionary products. It also imposed new economic strains that took their toll of the sector. For many, the development costs and high risk were more than they could comfortably sustain.

In parallel, the operating context was changing rapidly. High-profile cases of big new products with big adverse effects led to some conspicuous withdrawals from the market — and to constantly-rising requirements from regulators who had burnt their fingers through injudicious authorisations. Extensive demands for greater preclinical and clinical testing tightened the screws still further on the industry’s business model, just as the opportunities opened up by biotechnology applications were also making research more expensive and unpredictable. And alongside the strains on innovation, challenges multiplied in the marketplace, from increasingly adventurous generic producers, and the still-sharper elbows of the burgeoning parallel trade sector.

The spectacular increase in international products and international marketing exposed as never before the fundamental weakness confronting the industry in Europe: the divergent national requirements, which split a potentially large market into a patchwork of distinct fragments and hindered the continent-wide launch of innovations. This was the background to the development, throughout the 1980s, of the first attempts at a pan-European system of obtaining marketing authorisations. It was, at times, a painful experience, handicapped (and occasionally even sabotaged) by resistance from national authorities to what they saw as an erosion of their prerogatives, and boycotted by some major firms fearful of concentration of power at European level.

The deficiencies of those initial procedures led to the construction of the more robust mechanisms of the European Medicines Agency. This has, over the fifteen or so years of its existence, brought a new degree of harmonization to product authorization — and extended its authority to a wide range of related issues that have arisen, from advanced therapies to the promotion of smaller biopharm companies.

Over the same period, the industry in Europe managed to persuade the European Union to take action to compensate firms for the growing delays in bringing new products through the ever-lengthening development periods. Patent term restoration legislation and subsequently data protection rules provided some relief for innovators against the depredations of generic competitors.

But if the industry had some success in winning arguments about the merits of innovation, it was conspicuously less successful in convincing national or European authorities to put their money where their mouth was. Attempts by brandname companies to contain the rampant growth in parallel trade  failed repeatedly — and on more than one occasion, spectacularly. European court rulings consistently upheld the EU doctrine of free movement of goods within the EU, and when one European Commissioner acceded to industry urgings to raise the question of overturning this sacrosanct principle, he was left high and dry because industry failed to deliver on its promise to provide him with the supporting evidence. It took years for the industry’s credibility to recover.

More significantly, European countries, even within the EU, retained absolute sovereignty in their decisions on pricing and reimbursement. So the best that the industry was able to obtain was an EU directive requiring national authorities to operate in a transparent fashion about their reasoning for decisions – but the decisions nonetheless remained entirely autonomous, and increasingly parsimonious, so industry gained little or nothing.

This divergence in economic decision-making continues to bedevil the operating climate for the industry — and all the more so as the winds of economic crisis whistle more threateningly. The assumptions that had prevailed for so long, that healthcare spending should continue to rise, are now subject to open challenge. The pressures on drug budgets — which have in any case been an easy target in healthcare financing over recent years — are inevitably increasing as a consequence.

The industry in Europe has been engaged for more than two decades in a protracted  lobster quadrille of round tables, forums and high-level groups with politicians, payers and patients, ostensibly to build a European policy for pharmaceuticals that can guarantee access to medicines while promoting research. But the overall effect has been to blunten rather than sharpen industry arguments for better treatment in terms of market access and adequate pricing and reimbursement.

The recent emphasis on ensuring the sustainability of healthcare systems — a constant theme now in European political debate — is not helpful to industry’s renewed bid for recognition of the importance of innovation.  There is plenty of talk on all sides about the need to promote innovation — in Europe this type of rhetoric has attained epidemic proportions — but the talk is yet to produce any real shift in attitude among healthcare payers. The debates are complicated by new uncertainties over the prospects and perils from advances in areas such as personalised medicine or e-health, or the challenges of providing care for increasing numbers of old people. But it will be unwise of Europe to spend another thirty years looking for solutions. The game has been changed out of all recognition, and the schedule dramatically abbreviated, by the rise of the new economies. No longer will the debate focus on the decline in Europe’s performance compared to the US and Japan. Now the industry lives under the shadow of China and India’s might — and they will not stand patiently aside while Europe reflects on how to maintain industrial competitiveness.

Reflector is Pharmaceutical Executive’s EU correspondent.

The companies listed above – Abbott and GSK, on the one hand, and Danone and Nestlé, on the other – represent two distinctly different industries that are beginning to step on each other’s toes.  Consumer packaging goods (CPG) companies are skilled at developing and marketing consumer products, while pharma’s expertise is more science-oriented, in terms of product development and marketing requirements. Both industries have taken notice of a snowballing consumer interest in so-called nutraceuticals and functional foods, or products that don’t necessarily involve active pharmaceutical agents, but have marketable, science-based ingredients.

While Abbott, GSK, Sanofi and other pharmas have shown an interest in building a nutraceuticals or science-tempered nutritionals business around areas like heart disease, Alzheimer’s, diabetes and gastrointestinal disorders, others have shied away from the prospect of low margin consumer products, and the marketing efforts they require. Pfizer, for example, put Wyeth’s baby formula business up for sale in July; Nestlé and Danone are reportedly the leading bidders.

Given the pipeline gap, pharma can’t afford to cede the nutraceuticals market to CPGs like Nestlé, a company that is actively climbing over the fence into pharmaceuticals. Pharma companies are “gun shy” about aggressive consumer marketing, and less willing to take risks, says Leonard Fuld, CEO of Fuld & Company, a competitive intelligence firm, and host to the aforementioned war games. Pharma’s FDA regulatory funambulism is the source of its reticence, whereas CPGs are willing to risk obtrusiveness (and legal grey areas) in the attempt to dominate a market. You won’t see embedded video advertising for a pharma brand placed against pirated television shows hosted offshore, for example.

Fuld says the war game discussions also revealed that pharma companies are nervous about partnerships with CPGs, believing that brand identity or intellectual property could be usurped after handing over a product. While Nestlé in particular could “break the mold” – the company has walled off its high-science division, separating disciplines like genomics, biochemistry and human cell biology, from say, innovations in foam-boosted cappuccinos – Fuld says pharma companies need to make a public health case for nutraceuticals, since they don’t know how to educate consumers the CPG way: by creating and exploiting a broad, populist market need. CPGs like Nestlé and Danone are pushing into new, science-based products that don’t require a prescription. Fuld says pharma should be more willing to collaborate, and recognize the nutraceuticals and “designer foods” market for what it is: an opportunity for new revenue that bypasses a decade-long testing phase and an increasingly hostile payer environment.

Participants representing the four companies in the war game were culled from Dartmouth’s Tuck School, MIT Sloan, Northwestern’s Kellogg School, and the Yale School of Management. Actual company representatives observed and made comments.

Today, GSK announced phase two of the program, which includes incentive components that sound a lot like sales-based goals. Phase two, which began on July 1, consists of three criteria for sales rep compensation: selling competencies, customer evaluation, and the overall performance of the rep’s business unit, according to a statement.

If sales targets aren’t part of the new incentive structure, what exactly are selling competencies? “We’re not giving details on assessing things like sales competency and customer evaluations, because we really consider the methodology and process that we’ve developed and put in place to be proprietary,” says Kevin Colgan, a GSK spokesperson. The methodology “uses information from multiple data streams,” and will “provide a good way to differentiate the performance of the sales professionals,” says Colgan.

The third criterion – overall performance of the business unit – is a measure used to evaluate other employees in the organization, not just sales reps, according to Colgan. Asked about reactions to the new incentive structure (first implemented in January 2011) from the rank and file, Colgan says, “I think the sales force is pleased with the rigor of the new approach, and that it will do a good job in determining the success of the sales force and how they’re performing relative to their peers.” GSK’s first quarter sales in the US were down 4%, to $2.27 billion, but that was thanks to “higher discounts required as a result of US Healthcare reform, generic competition to Hycamtin…and the impact of the divestment of Zovirax,” sold to Valeant during the first quarter, the company said.

GlaxoSmithKline’s diabetes drug Avandia became mired in such controversy regarding its safety in recent years that it was dubbed “another Vioxx”—exactly what the pharmaceutical industry had vowed never to produce. Two weeks ago, FDA’s decided to restrict access to Avandia, earning it “drug of last resort” status. This long-awaited decision was expected, but there were many unexpected aspects to the way the agency made its decision public.

Pharmaceutical Executive asked Daniel Carpenter, a professor of government at Harvard University and the author of a big new book about FDA called Reputation and Power (Princeton University Press) that is getting a lot of attention in the press, for his take on how the Avandia story has played out—and what it may mean for both FDA and pharma in the future. Walter Armstrong

Pharm Exec: FDA decided to leave Avandia on the market and to impose a REMS that essentially turns it into a diabetes drug of last resort. (The drug already carried a black box warning about cardiovascular risks.) GSK has said it will no longer spend any money marketing Avandia, and most analysts agree that new prescriptions will likely come to a halt. So why didn’t the FDA, like the EMA, simply yank the drug?

Daniel Carpenter: I see the Avandia decision as a kind of withdrawal, with a very strong, long-term message for the pharmaceutical industry. Essentially 95 percent or more of the drug’s once-robust market is gone, and the decline is attributable almost entirely to post-marketing studies by third parties and a series of FDA regulatory decisions.

GSK’s decision to discontinue marketing for Avandia was not unrelated to FDA’s decision. My guess is that GSK had an implicit understanding that FDA would allow sales for existing Avandia patients without other alternatives, but only if marketing stopped to new patients.?The FDA can now use a REMS to carve out virtually all of a drug’s market while also satisfying medical libertarians by leaving it to be prescribed for the few who have no alternative. Some consumer advocates have decried the decision to leave the drug on the market. I see it differently: Avandia has been all but taken off the market, and a critical precedent has been established.

If I had told you four years ago that, in the absence of a single randomized clinical trial demonstrating greater cardiovascular risk for the drug, 95 percent of that drug’s market was going to be taken away by virtue of a meta-analysis and post-market epidemiology studies—plus some unsavory evidence revealed about a company’s clinical trial practices and failure to disclosure risk information—I think you would have bet against me.

Vioxx was pulled only when a randomized clinical trial demonstrated greater myocardial infarction risk. In some ways, given the evidence base, FDA’s decision on Avandia is a more aggressive regulatory action. It may well be the right one, but regardless, it’s momentous.

If I had to wager one other thought—based on this case’s circumstantial evidence—it’s that FDA’s leadership might be using Avandia as a try-out opportunity for a tougher REMS. Again, there is a real signal being sent to the drug industry that these REMS are not mere “management tools” but can be used to reduce a drug’s market to a fraction of the sponsor’s original ambitions.

Three aspects about the way the decision was communicated seemed surprising to me: First, FDA and the EMA made their announcements in a coordinated fashion.
Second, FDA posted on its website the memos written by John Jenkins at the Center for New Drugs, David Graham at the Center for Drug Safety, and other key officials, showing the dramatically conflicting views of their risk/benefit analysis of the drug.
Third, Commissioner Margaret Hamburg, Deputy Commissioner Josh Sharfstein, and CDER head Janet Woodcock co-wrote a piece in the New England Journal of Medicine explaining the difficulty of coming to a conclusive decision. Each of these actions was a remarkable departure from FDA tradition. They appear to speak to the new transparency at the agency, which seems to be a very high value of the Margaret Hamburg.

DC: I think you’re right about transparency being cherished by the new leadership. It’s being pursued for a number of reasons, not least because the new FDA leadership understands, in ways the past few commissioners did not, that the FDA’s credibility has been severely compromised in the last two decades.

The current FDA leadership also understands the symbolic importance of their actions, and I can only surmise that that understanding, plus the possible confusion caused by separate EU and US decisions, was the reason for the coordination with the EMA.  ?There are, of course, risks to transparency. In this case, by not presenting a united front to the public and the scientific community, people will perhaps begin to view FDA as characterized by massive infighting. That said, in an age when anyone can tweet, blog, talk to a reporter, and so on, I think Commissioner Hamburg understands that there is a greater risk from trying to present a united front when there isn’t one.

Her policy of transparency serves other purposes, too. It now forces people like Jenkins and Graham to come clean and public with their strong views. Graham had been doing that already, but this policy requires him and other drug safety officials to articulate their views on the same platform (scientific and administrative memoranda) shared by Jenkins and Woodcock, the people whom they regularly oppose. Jenkins’ view that Avandia needed essentially no further regulation had been articulated internally in the past, but from now on it has to be communicated openly and immediately.

So this policy may make it more difficult for people like Jenkins and Graham to maintain rigid stances. To keep credibility, they may need to pick and choose their battles.

GSK attempted to refute the charge that Avandia caused more heart attacks and other CV complications than other diabetes treatments by saying that the two most damning studies were both meta-analyses, while their own RECORD trial, which didn’t show an increased risk, was gold-standard randomized controlled trial (RCT). (Of course, their defense was demolished when an FDA investigator revealed that some of the outcome data in the trial had been dropped or faked.)Do you agree that the two different kinds of studies are too different to be usefully compared?

DC: On the memo from FDA reviewer Thomas Marciniak severely criticizing the RECORD trial, I have claimed elsewhere (Pharmalot, July 2010) that its effect was to undermine GSK’s credibility in running trials. That could have long-term damaging consequences for the company, especially when combined with the New York Times reports and the evidence coming from the Senate Finance Committee. The issue is not so much whether New York Times readers trust the company’s trials, but whether advisory committees and FDA and EU medical reviewers trust the company’s trials.

This question—the comparability and relative value of RCTs versus epidemiologic studies—is one of the critical issues facing 21st century governance and science of pharmaceuticals. It’s clear that RCTs are still preferable for many questions, but it’s also the case that other kinds of evidence (such as pharmacoepidemiology) are becoming more rigorous.

The question of internal and external validity is also very important. I tell my students that perhaps the most important medical and public health finding of the 20th century—that cigarette smoking causes lung cancer and heart disease—came entirely from observational studies.

One other thing. If we are truly entering a world where we care not just about a single average treatment effect, but instead a battery of treatment effects that differ by phenotype or genotype, then we are likely entering a world where observational studies are more—not less—important to the scientific inferences we make.

How would you characterize GSK’s approach to the entire question of its drug’s association with CV events, especially heart attacks. The coverage in the New York Times, in particular, of the documents GSK gave to the Senate Finance Committee paints the picture of a company almost trying its hardest not to get to the bottom of the problem—in fact, using tactics like intimidation of critics, hiding negative data from the public and even the FDA, and possibly paying doctors to fudge clinical data. Is that the grim reality of pharma’s methods?

DC: Large pharmaceutical companies have a severe trust deficit right now—in the public, in academic medicine and science, and among regulators and public health officials. And I daresay that trust deficit has been richly earned.

Every time another memo is leaked suggesting that risk information has been suppressed or shrouded, every time a critic has been bought off or intimated, every time a clinical trial has been oversold or sloppily analyzed, the reputation of the entire industry suffers. It really is a case of one bad apple ruining the whole bunch.

In my scholarship, I’ve noticed this kind of associative property of reputations and trust, where people who had nothing to do with success or malfeasance are nonetheless implicated symbolically in the success or malfeasance by virtue of their common membership in an organization or an industry.

Part of the problem is that we all inhabit a world where institutions and organizations generally have lost legitimacy. My own “sector”—higher education and places like Harvard—are not immune from this critique. But the reputation of the pharmaceutical industry seems to have fallen in a different way, by a different magnitude. If I had to name the top two or three issues facing pharmaceutical managers and executives over the coming generation, restoring public trust through circumspection and transparency would have to be one of them. This issue isn’t going away.

(Pharm Exec’s November issue will contain an in-depth interview with Daniel Carpenter about his 10-year study of FDA for his book, Reputation and Power, as well as some of the intense responses the book has already received in the media.)

The majority of the panel found there was a greater risk of major adverse cardiovascular events (heart attacks, strokes, etc.) for patients taking Avandia than those taking other diabetes drugs. (It didn’t find an increase in mortality, however.)

During the meeting, GSK trotted out details from its RECORD study that supported its hypothesis that Avandia benefits Type 2 diabetes patients in the long run and does not cause an increase in risk.

The company also released a statement July 13 echoing what it had told the Senate Finance Committee and FDA months before: Avandia critics are cherry-picking documents that support their claims of increased risk of adverse cardiovascular events; furthermore, comparisons that favor Takeda’s rival diabetes drug Actos are invalid, since one of the studies did not compare the performance of the two drugs in regards to cardiovascular events.

The “trial” itself played like a game of statistics ping-pong, with different analyses and accusations of data manipulation batted around by both sides. The sheer number of trial design flaws worked in both parties’ favors, and the debate over which studies should be included in decision-influencing meta-analyses raged throughout both days.

But much of the damage to GSK’s case had already been done before the meeting: Reports of study coverups (in The New York Times, no less) and paper ghostwriting have been plaguing the company for months. And the company announced on Tuesday it would settle around 10,000 suits for a total of $460 million. The suits alleged the very problems Avandia critics have vocalized over the last several years.

One of the reviewers to recently join the critics was Thomas Marciniak, who blasted GSK’s lynchpin RECORD trial for not only being poorly designed, but also poorly executed. Marciniak found numerous instances of ignored or severely delayed reporting of cardiac events in Avandia patients. He also argued, in his slides, that he has no bias, as “neither [his] job nor (for [him]) hundreds of millions of dollars are riding on the results.” And, far from GSK’s claim that RECORD vindicates its drug, Marciniak said he found that the study does suggest Avandia increases the risk for heart attack.

FDA doesn’t have to follow the panel’s recommendation. But the agency’s ultimate decision on Avandia’s fate will be indicative of the direction commissioner Margaret Hamburg’s regime is taking: Will it lean towards getting—and keeping—as many drugs into the market as possible, or will it take the safer route of risk management?

Of course, reading the tea leaves in FDA’s cup is often an exercise in futility. Determined to make as few waves as possible, FDA officials have perfected the art of “split-the-difference” decision-making. But Hamburg and Sharfstein are reputedly a different breed of leader. And given the longstanding guerilla war between FDA’s safety officials and its drug reviewers, the outcome of Avandia’s trial may signal a possible shakeup inside the agency itself.

But portents aside, will justice be done in the case of GSK’s once-heralded, now much-maligned diabetes drug?

Imagine the process as a courtroom drama. At the prosecution’s table sit two familiar doctors: David Graham, the outspoken FDA drug safety expert; and Steve Nissen, the equally outspoken chairman of cardiology at the Cleveland Clinic. Both made their names a decade ago leading the charge against Vioxx, and the Avandia dustup has further burnished their reputations as anti-pharma crusaders. Both advocate Avandia’s withdrawal and have published studies making that case to the FDA advisory panel.

Graham’s study, published June 28 by the Journal of the American Medical Association (JAMA), is based on a retroactive analysis of the 1999–2009 records of 227,571 Medicare patients on Avandia or its same-class competitor, Takeda’s Actos. The report finds that Avandia was associated with a higher risk of stroke, heart failure (but not heart attack), and death, and concludes that more than 47,000 people could have escaped these health emergencies had they been on Actos rather than Avandia. Graham has long maintained that Avandia remains on the market only because FDA reviewers are defending their original decision to approve it.

Nissen’s study, published June 28 by the Archives of Internal Medicine, updated his 2007 meta-analysis, using a database of 56 trials including 35,531 patients. He found that Avandia raised the heart attack risk by 39 percent, compared to placebo; however, the rate of mortality was not elevated. Nissen attributes the differences between his data and Graham’s to the fact that his cohort’s average age was 54, while Graham’s was 74. “It is really impossible to argue that this drug has benefits that exceed its hazard,” Nissen told The New York Times.

Additional evidence includes a February 2010 bipartisan Senate investigation into 250,000 internal GSK documents. The most serious findings charge that GSK knew about the increased cardiovascular risks for two years, and FDA for about half as long, without alerting the public.

At the defense table sit a row of lawyers flanked by PR flaks, with a few slightly rumpled scientists sprinkled in for effect. “Results from six controlled clinical trials have been reported since … FDA last reviewed questions about the cardiovascular safety of Avandia in 2007. Taken together, these trials show that it does not increase the overall risk of heart attack, stroke, or death,” the suits intone as one.

The most recent study, presented on June 28 at the annual meeting of the American Diabetes Association (ADA), was designed to test how best to treat patients with both diabetes and coronary artery disease. In this 2,400-patient observational study, Avandia was not prescribed randomly but by the individual doctor’s discretion: Some patients got medication alone, others medication plus angioplasty or bypass surgery. At 4.5 years of follow-up, the rates of heart attack, stroke, or death were slightly less for those on Avandia (or Actos) than metformin.

As for the Senate’s accusations about concealing known dangers from the public, GSK denies all such charges. It also insists that the two new studies critical of Avandia, as retrospective analyses, are open to interpretation. Citing opposition by doctors—including ADA and American Heart Association officials—to any move to yank Avandia, GSK’s legal eagles rest their defense with a rhetorical plea to let science prevail over uncertainty.

The FDA advisory committee will certainly sweat over the mass of Avandia science, but uncertainty is likely to remain. Following FDA’s 2007 decision to allow GSK to keep selling Avandia despite possible dangers, the agency ordered the company to conduct a large, randomized trial comparing Avandia to Actos to determine which is safer. Yet with enrollment flagging, the drug may well be off patent before results are in.

Now that study looks like a waste of time and money. As the JAMA editorial accompanying Graham’s study says, “Converging lines of evidence suggest that Avandia is less safe than Actos, whereas no data suggest that the converse is true. The real question is, given all the accumulating safety concerns about Avandia, why, exactly, a patient might want to receive the drug or why a physician would choose to prescribe it when there is an available and quite possibly safer alternative?”

In other words, it is a question not merely of safety and efficacy but also of value. Commissioner Hamburg may decide to ask GSK to pull Avandia to make precisely that point.

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.

Much of the drive for this addition labor sculpting stems from AZ’s desire to streamline its R&D; the company will focus on fewer disease targets and expects to cut up to 3,500 jobs in that sector, which currently employs about 12,000.

But it’s not all bad news. Some jobs might survive via relocation, and because the company wants to expand its work in biologics, the net loss could end up in the 1,800 range. This should save AZ at least $1 billion a year, money they need for pipeline projects close to launch, such as the highly anticipated motavisumab, which aims to prevent respiratory syncytial virus (RSV). But that’s just the tip of the iceberg. AstraZeneca’s pipeline contains over 100 projects, about 30 percent of which were acquired by licensing, according to CEO David Brennan.

The company has not disclosed which disease areas it will leave behind during this streamlining process, but it’s unlikely they’ll drop ones diabetes (with seven compounds in the works and a rapidly growing patient population) or cancer.

According to the Times of London, GlaxoSmithKline is also expected to have unpleasant news for employees during Thursday’s release of its 4Q figures: They’ll be cutting 4,000 jobs, mostly in Europe and America. A similar bloodletting took place last February, when an estimated 6,000 got the axe. This is all part of Glaxo’s plan to save $2.7 billion by 2011.

At 26, Paul Dyer has a long list of accolades that most young professionals his age only dream about. As eMedia Director at WeissComm Group (WCG), Dyer oversees social and new media programming for the agency’s health and consumer brands as well as healthcare clients. Some of his current and former clients have included Virgin Megastore, IBM, Elan Pharmaceuticals, Novartis, GlaxoSmithKline, and Actelion.

This year the Austin, Texas-based Dyer developed and launched a social media monitoring and analytics program for Pfizer’s entire primary care portfolio. Pharm Exec was excited to get the scoop about it, and pick his brain for thoughts about pharma on the social media scene.

Pharm Exec: In your opinion, is pharma “getting” social media?

PD: A lot of social media pundits would say pharma is totally missing the boat. However, that view is based on the assumption that “getting” social media requires full blown adoption and running 100 mph. Social media has changed online communications so significantly, so rapidly, the attitude has become that if you aren’t moving just as quickly, you’re not “getting” it. It is true that pharma is behind other industries in terms of adoption of social media. However, there is an argument to be made that cautious, strategic entry is the wise approach for any industry. That is what pharma is doing right now.

Pharm Exec: Currently, what trends do you see happening in this space and which ones are on the horizon?

PD: There are a lot of important trends online. The most important trend we are all living is that consumers are looking to their peers as they make decisions. This includes health and treatment decisions. For most industries, pharma included, this heralds an exciting new marketing opportunity. For pharma, this also introduces serious risks. The key point is that consumers will only continue to place increasing trust in their peers online. How pharma reacts to and embraces this trend will be an important factor in Communications in the future, and may play a role in shaping policy as well.

The most significant trend on the horizon is mobile. Mobile devices are increasingly effective communication tools and technology is increasingly integrated into our lives on the go. Patients are now leveraging mobile applications from companies like Walgreens to fill their prescriptions and find information while they stand in a pharmacy. In the next few years we will see a shift that brings the full experience of the web out of our offices and homes and into our pockets.

Pharm Exec: Tell me about the program you launched for Pfizer’s primary care portfolio.

PD: Without mentioning specific clients, we are currently operating social media “listening” programs for almost two dozen pharma brands. These programs capture online conversations between patients, caregivers, and in some cases, physicians. They allow us to better understand important details about how patients live with specific conditions and what needs they have that pharma can support. In some cases, pharma has been afraid of listening. In others, forward thinking companies understand that these conversations are taking place whether we listen to them or not. Not just from a marketing perspective, but also from the perspective of better understanding how we can help our patients, listening to conversations in social media is an important first step.

Pharm Exec: What has been your biggest accomplishment to date, either professionally or personally?

PD: I would have to say my biggest accomplishment to date was convincing my very first client to run a social media campaign. It was almost five years ago now. Thinking back, it was a ludicrous proposition. Here I was, some kid from LA claiming to be a consultant, sitting with the heads of marketing at a global entertainment retailer in New York, and telling them social media was going to be the next big thing. Equally ludicrous was the idea that I should be the guy to run the campaign. But they signed on it. That campaign was one of my most successful ever—right at the forefront of when consumers were starting to accept companies being involved in social media, and before a lot of social media tactics had become common. The retailer reported increased sales in every segment that Quarter, including CD sales, even while competitors were closing their doors down the street. The social media campaign was credited with their increase in sales. That’s really the campaign that launched my career.

Jacky Law

Guest blog by Jacky Law

A couple of weeks ago I attended an industry awards dinner and had an interesting conversation with an eminent doctor who shall remain nameless. The doctor in question works in a highly specialized area and frequently talks about her research at conferences around the world. She always travels first-class and has come to expect accommodation at the best hotels, courtesy of the people who have invited her to speak, which may be a drug company or the conference organizers. She believes she is worth the extra expense and does not think for a second she is abusing the system.

But she was worried about a colleague in Italy who works in the same area and who has had a holiday home paid for in its entirety by a drug company. He also believes he is worth it. The area of medicine in question is highly competitive and I suspect both doctors earn their perks as far as the pharma companies are concerned.

The trouble is that in an era of transparency, other stakeholders get a look-in and conflicts arise, as UK readers will know from the furore that arose after expenses claimed by their Members of Parliament (MPs) were disclosed recently. In that uproar, it was clear that many MPs also thought they had done nothing wrong, even when their expenses ran to extremes such as the cleaning of a personal moat.

This was not how the electorate saw it and lots of MPs’ reputations and the integrity of the system took a hard knock. The doctor I was talking to wondered if the new fashion for transparency in pharma circles would similarly impact the medical profession.

As well she might. Just a few days earlier, Merck & Co had disclosed it had paid 1,078 doctors and nurses in the US a total of $3.7 million from July to September to talk to colleagues about company products and healthcare related to those products. On average, these professionals were paid $1,548 but the highest earner received $22,693, and several doctors got more than $10,000 — not inconsiderable sums.

Merck is not alone. Eli Lilly was the first to fall in line with new thinking on payments to physicians and GlaxoSmithKline, Pfizer and Johnson & Johnson are among others to say they will follow suit. Indeed, all pharma and medical device companies in the US will be compelled to disclose information on their payments to physicians if the Physician Payments Sunshine Act 2009, which was folded into the health reform bill approved last month by the Senate Finance Committee, becomes law. The act sets fines of up to $1 million for knowingly not reporting payments to doctors of more than $100 in a year.

So far the disclosures only focus on the US, but the arguments of Senators Chuck Grassley and Herb Kohl, who introduced the legislation, are equally persuasive in Europe. Timing is everything. The two senators had tried to introduce a similar bill a couple of years ago but it was not even considered by Congress. Now it is strengthened by incorporating many of the recommendations of the Medicare Payment Advisory Commission, an independent agency that advises Congress. Even if the act isn’t passed, many Big Pharma companies see compliance with its spirit as essential to repairing the damage the industry’s reputation has suffered in recent years. They probably also reckon it will save them money as it dawns on doctors, like the one I was talking to, that they also have reputations to protect and may well settle for less to speak on a company’s behalf.

The truth is that ordinary people, like the UK electorate when presented with what their representatives had been getting away with for years, see things differently from MPs or doctors. And having pharma companies pay for second homes doesn’t sound like a terribly impartial way of doing things.