Editor

The biopharma industry has known for years that drug development is changing, that FDA approval is no longer the end goal but rather the starting point from which to tackle reimbursement, and that the pendulum has swung away from me-too drugs and toward value-creating innovation.

But if you thought value-creating innovation meant a drug that could measurably improve the lives of patients with a devastating disease and outperform any currently available treatments – well, it appears you'd be mistaken.

Last week's disappointing sales figures for Dendreon Corp.'s prostate cancer vaccine Provenge (Sipuleucel-T) made that abundantly clear. Provenge is the first and only therapeutic cancer vaccine ever FDA approved, and it boosted survival by 4.1 months in a Phase III trial. But the drug is not succeeding commercially, which Dendreon blamed on reimbursement issues.

In the past, "the pharmaceutical world valued innovation for itself," explained Roger Longman, CEO of consulting firm Real Endpoints LLC. But now, as regulators the world over lean on health care costs to solve their budget crises, "what you're seeing is innovation's value is now going to be determined based on the value it brings to the health care system."

PBM Incentives

In Dendreon's case, company executives said doctors are hesitant to prescribe Provenge because they are not yet comfortable with reimbursement for the $93,000 drug. Recent progress including issuance of an NCD and Q-code should help, although analysts are concerned that demand rather than reimbursement is the real issue – a disturbing prospect that indicates patients and doctors don't see the value of the drug. (See BioWorld Today, Aug. 5, 2011.)

But Provenge is not the only example of an innovative drug getting sidelined by its value proposition. Longman pointed to Eli Lilly and Co.'s antiplatelet drug Effient (prasurgrel) as another.

Effient beat Plavix (clopidogrel, Sanofi SA and Bristol-Myers Squibb Co.) in a head-to-head study and was thus expected to be a blockbuster, even in the face of near-term generic clopidogrel competition. While the availability of a better drug would seem to be good news for patients, it was decidedly bad news for pharmacy benefit managers like Medco Health Solutions Inc., which make higher margins on generics.

Medco was thus incentivized to disprove Effient's efficacy. So the PBM started its own head-to-head trial comparing Effient to Plavix only in patients without the gene mutation that can make Plavix less effective, acting on a hunch that non-responders gave Effient an unfair advantage in Lilly's study. The outcome may help establish what's best for patients, though the situation has been anything but good for Lilly: Effient is suffering from a weak launch, with $72 million in second quarter sales.

Thus when AstraZeneca plc gained FDA approval last month of Brilinta (ticagrelor) – which had also beat Plavix head-to-head – analysts couldn't muster all that much excitement.

Longman pondered if a similar situation might play out as the next-generation anticoagulant competitors approach the market. Boehringer Ingelheim GmbH's Pradaxa (dabigatran etexilate), Bayer Schering Pharma AG's Xarelto (rivaroxaban), Daiichi-Sankyo Co. Ltd.'s edoxaban and Pfizer Inc.'s apixaban are all in Phase III – and all would increase PBM costs vs. generic warfarin. "What if you could use technology to determine the right dose of warfarin instead?" Longman questioned. PBMs may be motivated to find out.

Prolia vs. Xgeva

Another example of an innovative drug that has suffered a slower-than-expected launch is Amgen Inc.'s Prolia (denosumab) for postmenopausal osteoporosis.

Denosumab, a first-in-class RANK ligand inhibitor, has been billed as the "white knight" that will save Amgen from the safety, regulatory and reimbursement issues that have plagued its core erythropoiesis-stimulating agent franchise. Expectations for the drug were high, considering it had beaten Fosamax (alendronate, Merck & Co. Inc.) in head-to-head trials, but some analysts were skeptical of Amgen's ability to compete against big pharma and generics in the primary care osteoporosis market.

Approved just over a year ago, Prolia sales started without a bang: about $13 million in the third quarter of 2010, $20 million in the fourth quarter and $27 million in the first quarter of 2011. It wasn't until the second quarter of this year that the drug seemed to turn a corner, beating analyst estimates by posting $44 million in sales. (See BioWorld Today, June 3, 2010, and Aug. 1, 2011.)

In a recent business update, Amgen President and Chief Operating Officer Robert Bradway explained Prolia's initial challenges. Primary care physicians in general are "slower to adopt new therapies," he said. They are also reluctant to buy a drug until they are confident they will get reimbursed for it. When explaining the sales jump in the second quarter, he pointed to the fact that Amgen has significantly increased Medicare Part D coverage for the drug and increased patient awareness through direct-to-consumer advertising.

Christopher Raymond, analyst with Robert W. Baird & Co., explained the turnaround by stating that Prolia "is a superior product. Ultimately, clinical data win in the end." But he's not convinced the drug will hit blockbuster status as many originally predicted: He models Prolia sales of $700 million in 2014.

Contrast that with the launch of Xgeva, denosumab's brand name in the oncology market. The drug booked $8 million at the end of last year, and quickly ramped up to $42 million in the first quarter and $73 million in the second quarter. (See BioWorld Today, Nov. 22, 2010.)

Bradway attributed the strong launch to the fact that specialists tend to be faster adopters. He also noted that there is "no more impactful word in our industry than superiority," and Xgeva beat Zometa (zoledronic acid, Novartis AG) in head-to-head studies – although such superiority apparently didn't have the same impact on Prolia.

Longman offered another possible explanation. "Payers are afraid not to pay for cancer drugs," he said.

Failure to Launch

Yet having a cancer drug didn't save Dendreon's launch, nor did it prevent Allos Therapeutics Inc.'s peripheral T-cell lymphoma drug Folotyn (pralatrexate) from missing initial analyst expectations.

And targeting specialists rather than primary care physicians hasn't helped the initial launch of other biotech drugs, like Auxilium Pharmaceuticals Inc.'s Xiaflex (collagenase clostridium histolyticum) for Dupuytren's contracture or Acorda Therapeutics Inc.'s Ampyra (dalfampridine) for multiple sclerosis.

It just seems that biotech drug launches across the board generally fall short of analyst expectations, a fact recently explored in a two-part BioWorld Insight series. Sometimes there are reimbursement problems, sometimes there's a lack of disease awareness, sometimes the biotechs just don't have sufficient resources to launch fast and hard, and frequently analyst estimates are more optimistic than realistic. (See BioWorld Insight, May 23, 2011, and May 30, 2011.)

To minimize an innovative drug's likelihood of failing due to reimbursement issues, Longman recommends that biotechs include endpoints in their clinical trials that help demonstrate the drug's cost-effectiveness. Companies should treat "reimbursement issues as equally important to medical issues," he said.

The challenge, however, is getting payers interested in participating in the drug development process. Most don't want to become paid industry consultants, he said, and drug developers don't often have strong contacts in the payer world. And even if a company can get payer feedback, it has to "listen to what's said and interpret it effectively" rather than hearing what it wants to hear, Longman added.

The solutions to these problems are emerging and evolving, Longman said, and will be critical to successful drug launches in the future.