Friday, October 17, 2008

"Biologicals"--a Technique to Justify High Drug Prices

The Healthy Skepticism listserv recently featured a very insightful and helpful comment from a Down Under pharmacist, Dr. Chris Doecke, of the Royal Adelaide Hospital. Though this blog is not primarily about why drugs cost so much, it is about techniques of drug marketing, so I thought Dr. Doecke's expose of the myths surrounding the term "biologicals" might be helpful to readers:

I also would like to highlight another very common myth that is often promoted in the area of new pharmaceuticals generally, but particularly with cancer treatments. Unfortunately many health professional have also been sucked in that most new drugs are "biologicals". Once said this somehow immediately justifies a $100K per year price tag without further challenge.

The quotes from the BW article were: "Because cancer treatments often consist of complex protein molecules that take years to develop, the drug multinationals left these risky products to small biotech ventures such as ImClone." "And Roche, bowing to pressure from Britain's National Institute for Health & Clinical Excellence (NICE), slashed the price of lung cancer drug Tarceva by $1,200 to $10,830 per four-month course of treatment."

Point one

Tarceva is erlotinib hydrochloride, a fairly simple small synthetic chemical. It is not a protein, it is not complex. It inhibits endogenous receptors in the body to modify physiologic processes (tyrosine kinase activity) just as atenolol inhibits endogenous receptors in the body (beta adrenergic receptors). Erlotinib is presented as a simple oral film coated tablet. We are being duped into linking these simple chemicals with "biologicals" because they are use for cancer treatment. Novartis did exactly the same with imatinib for CML. A$50-75K per year per patient for a simple oral dose form.

Point two

The fact that a pharmaceutical is a proteins should NOT immediately justify a $100K per year price tag. Most are produced by using a recombinant process via a cell line. Once the process is established, cells simply spew out protein. I simplify a little, but as part of my PhD I produced active protein via recombinant techniques - hence isn't that difficult. Finally we have had recombinant human insulin available for decades at arguably reasonable prices.

In summary, this is a subtle process that we often get sucked into. That is, that everything for cancer is "biological" and that everything biological is rare, complex and expensive. As health practitioners we need to de-bunk these myths at every opportunity.

Thanks to Chris for giving permission to reprint his comment here, and he notes that he will be expanding the discussion for a future edition of the Healthy Skepticism Newsletter.

1 comment:

Anonymous said...

Innovation of Biologics, And The Debate of Their Value

Beginning in the late 1970s, biopharmaceuticals were being researched for conceptual production in those places once called academic institutions, and is was here that actual researchers conducted basic research to identify new product candidates and applied a great amount of time and effort. The same protocol is applied with biopharmaceutical companies today as it was then.
Known also as Red Biotechnology, it is believed that the first biopharmaceutical therapy ever was synthetic insulin called Humulin made by Genetech in 1982 that utilized what is called rDNA technology, which also is used to produce human growth hormones. Later, the rights were sold to Eli Lilly for this insulin. Yet Genetech was the catalyst and apex of biopharmaceutical growth. And they are truly research-driven. Today, they employ near 1000 scientists to continue their drive to research. And so far, Genentech remains independent, although Roche owns a large portion of this company.
Biopharmaceuticals are distant and covert relatives of big pharmaceuticals, whose products are formed by synthetic small molecule and carbon based in their design. Due to the lack of innovation and creation of truly unique products, large pharmaceutical corporations in particular have become intimate with the innovative biopharmaceutical companies more often now than ever. In fact, large pharmaceutical companies often acquire biopharmaceutical companies. These large pharmaceuticals do this because of the unlikely possibility that biopharmaceuticals will have biosimiliar products with therapeutic equivalents for some time, as, by definition, a generic biologic is not possible. In addition, biopharmaceutical companies have historically been and experienced accelerated growth that has proven to be quite lucrative for them. Presently, this is an 80 billion or so dollar per year industry, with roughly 15 percent growth each year.
How do these drugs differ from typical drugs that have been made before this advent of biopharmaceuticals? Unlike the small molecule, synthetic, carbon based pharmaceuticals of yesterday, biopharmaceuticals essentially are larger and very complex modified proteins derived from living biological materials, such as manipulated cell cultures, that vary depending on what medication will be manufactured and for what disease state. In fact, it is difficult to identify the clinically active component of a biopharmaceutical drug, which is why there is no pathway for generic copies of such drugs, as it would require expensive and meticulous clinical trial processes.
One method of these creations is that a transformed host cell is developed to synthesize this protein that is altered and then inserted into a selected cell line. The master cell banks, like fingerprints, are each unique and cannot be accurately duplicated, which is why there are no generic biopharmaceuticals as of yet, as there is no known process to create them. So the altered molecules are then cultured to produce the desired protein for the eventual biopharmaceutical product. These proteins are very complex and are manufactured from living organisms and material chosen for whatever biopharmaceutical that may be desired to be created. It is difficult to identify the clinically active component of biopharmaceutical drugs. So manufacturing biopharmaceuticals clearly is a different and innovative process, and a small manufacturing change could and has raised safety issues of a particular biopharmaceutical in the developing process. Also, it takes about 5 years to manufacture a biopharmaceutical. And each class has a different method of production and alteration of life forms to create what the company intends to develop. Yet overall, their development methods are rather effective, and cost over a billion dollars to bring to market.
Over 20 biopharmaceutical drugs were approved in 2005, I believe, and their growth tripled of what large pharmaceuticals experienced then. Also, just last year, biopharmaceutical companies made close to 80 billion in sales as well. Presently, over 20 biopharmaceutical products are blockbusters by definition. They are overall very effective treatments for what are viewed as very difficult diseases to manage. This is due to the fact that some pharmaceutical products target specific etiologies of these diseases, while limiting side effects because of the specific way in which such products work.
Unlike traditional medications that have been created in the same way for decades, biopharmaceutical companies seek through their research specific disease targets by genetic analysis and then search for a way to manipulate this target in a very specific way to provide superior treatment for such patients. Furthermore, these products are biologically synthesized and manipulated to maximize their efficacy while not crossing into a patient’s bloodstream.
There are about a dozen different classes or mechanisms of action of biopharmaceuticals that have about a half of dozen different types of uses today. Label alterations for additional disease states occur often as well due to the progressive and novel effectiveness of biopharmaceuticals. Some of these drugs are catalysts for apoptosis of tumor cells. Others may cause angiogenesis to occur to block blood supply to the tumors of cancer patients. Then some biopharmaceuticals have multiple modes of action that benefit certain patient types and their diseases greatly, as with most biopharmaceutical products, the safety and efficacy is evident and reinforced with clinical data and eventual experience with the biopharmaceutical that is chosen to be utilized. And this clinical data is of a different method as well in comparison with what are traditional medications. For example, patients in the clinical trial involving a pharmaceutical are profiled, which allows better interpretation of this clinical data on their products.
The country of Belgium provides the most biotech products to the biopharmaceutical companies in the United States, and the U.S. leads the world in regards to biopharmaceutical product creation- with more than 70 percent of both revenues and research and development expenditures in this country. Canada is ranked number two in this area, others have said.
And with the government health care programs who are the largest U.S. payers for pharmaceuticals, Medicare pays 80 percent of the cost of biopharmaceuticals, as many are administered in the doctor’s office, and Medicare part B covers the cost in large part for biologics.
One issue with biologics is overuse of these therapies, and biopharmaceutical companies are not exempt from federal prescription regulation. Amgen, who makes an anemia biologic called Neupogen, recently had to pay a settlement as well as JNJ, who makes an identical drug called Procrit, for rebates and incentives both companies were giving to the users of their products, which were very lucrative benefits, and this resulted in some cases intentional overdosing thier patients with these biologics at unreasonable and unnecessary levels. The doctors targeted with these biologics are nephrologists and oncologists, as anemia is often seen in their practices for various reasons.
Another controversy involving biopharmaceuticals is that, while they overall are efficacious and safe, the typical cost of biopharmaceuticals is rather unbelievable, as the cost may approach tens of thousands of dollars per month for some of these biologics. Furthermore, with cancer drugs, they are used together with chemotherapy for their treatment regimens in many treatment centers, so the quality of life comes into question if one considers the devastating side effects of chemo treatment. Another criticism of biopharmaceuticals is that, with cancer patients in particular, they normally provide an extension of their life of only a few months.
Several years ago, I saw Roy Vagelos, former CEO of Merck Pharmaceuticals, and heard him speak to others at Washington University in St. Louis about his views on medicines. And during his presentation, he stated something similar regarding the cost of biopharmaceuticals and asked as well about whether or not the value related to the cost of biopharmaceuticals is truly clinically beneficial for such a brief life extension of cancer patients in particular, for the most part. I happen to concur with this premise.
There are frequently issue or issues associated with new paradigms and innovations. Yet there are only a few biopharmaceuticals out of many available with debatable benefits with the high price tag. It ends up being what the market will bear for what their makers charge others. Yet the real question is the clinical evidence behind biopharmaceuticals: If a biopharmaceutical stops tumor progression without harming such patients and really extends their lifespan with efficacy, that the benefit for the patient becomes clear.
Another difference with biopharmaceuticals is that they are also are additionally regulated by what is called The Public Service Act, and are involved in authorizing the marketing of biopharmaceuticals.
With many biopharmaceuticals, such as those used to treat cancer, between 70and 80 percent of them are believed to be prescribed off-label, so it will be interesting on how these drugs will be used in such disease states now and in the future.
So the future looks good for this industry, as biologics have tremendous marketing power along with superior therapeutic value with some of the products available, but not all.
Regardless of the challenges and flaws that exist with biopharmaceuticals and their makers, I’m pleased to see the results and realization of true innovation in pharmacology by taking a different path of drug development. Furthermore, I believe others should behave in a similar manner and be inspired by the biopharmaceutical companies and what they have done and continue to do for the benefit of patients regarding the issue of innovation.
“The progressive development of man is vitally dependent on invention.” --- N. Tesla
Dan Abshear (what has been written is based upon information and belief)