The Enemies You Keep

Former Rep. Bill Thomas sure has it in for Amgen.

First, as chairman of the House Ways and Means Committee, Thomas made life difficult for Amgen by siding with sworn enemy Johnson & Johnson during the now-resolved EPO bundling dispute.

Thomas wasn’t particularly happy with allegations that Amgen gave large rebates for Aranesp (which competes with J&J’s Procrit) when purchasers committed to buying Neulasta and Neupogen.

And just before retiring from public service in 2006, Thomas teamed up with Rep. Pete Stark to criticize the Centers for Medicare & Medicaid Services’ reimbursement policy for Aranesp, in the hopes of making anti-Amgen changes in the way that the product was covered under Medicare Part B.

But while the Amgen/J&J feud has finally ended with a $200 million payout to J&J, Thomas can’t quite bury the hatchet.

This time around, he’s working against Amgen on the issue of follow-on biologics. Thomas has teamed up with Insmed Inc.—a company you might remember from a moderately infamous YouTube video—but that also just announced the results of a study demonstrating bioequivalence between its INS-19 and....wait for it...Amgen’s Neupogen.

Insmed has a long way to go on INS-19—that bioequivalence study was a Phase I trial. But the company says it is planning to petition FDA to commence Phase III studies of INS-19, and wants to move another “me-too” biologic, INS-20, which Insmed says is a “generic form” of Amgen’s Neulasta, into Phase I. (Are you sensing a pattern here yet?)

How Thomas’ vision for a follow-on biologics framework is different than the bipartisan legislation that’s already out there is unclear. It’s also unclear how the Congressional Budget Office’s scoring of the Senate’s version of the bill will affect the chances for near-term passage of any legislation.

But what is clear is that there’s no love lost between Thomas and Amgen. Conventional wisdom would suggest that it took a pretty sweet fee for Insmed to get Thomas on board as a strategic advisor. But given Thomas’ history with Insmed’s main target in the war on follow-on-biologics, maybe it didn’t take too much convincing.

The Stakes Increase on Comparative Effectiveness

When the Congressional Budget Office released its long-awaited report on comparative effectiveness last month, its overall conclusions were pretty much what were expected, based on director Peter Orszag’s public previews.

A comprehensive, national effort on comparative effectiveness will eventually save the US health system money, CBO determined. But for the next 10 years or so, more money will be spent implementing the program than will come out the back end in savings. And, as Orszag stressed in public comments leading up to the release of the report, success will be largely enhanced if the results are tied to financial incentives.

The RPM Report has written extensively about the potential for a national effort on comparative effectiveness—you can read our stories here and here. So is this bad news or good news for the pharmaceutical industry? Well, that largely depends on who you talk to, and, dare we say, what products are in the pipeline.

Merck is one of the more outspoken supporters of comparative effectiveness, dating back at least a year to an editor’s note from CEO Richard Clark (pictured here) in The American Journal of Managed Care. In fact, Clark is so on board that Merck redefined its approach to R&D and marketing based on a “value proposition.” Importantly, he wrote, “it is no longer enough to say that a drug has a new mechanism of action.”

Clark echoed that sentiment with investors during last week’s Morgan Stanley CEO’s Unplugged conference, selling comparative effectiveness (or “health economics,” as he put it) as a way to address FDA’s higher approval standards for new products.

Merck acknowledges its endorsement of comparative effectiveness isn’t winning any popularity contests among its peers. Indeed, other pharma companies have been somewhat less receptive. During a recent Kaiser Permanente Health Policy Forum, Sanofi-Aventis public policy director Jean-Paul Gagnon argued that the lifespan of a comparative effectiveness review is only three to five months. Beyond that, he argued, any findings should be considered suspect, given the changing science. That’s not exactly a ringing endorsement for comparative effectiveness. (In fact, using that philosophy, you might ask whether it’s even worth it.)

But maybe comparative effectiveness is easier for Merck to push as a priority right now, given the flush state of its pipeline. With the failed development of Arcoxia safely behind it, Merck can point to products like the type 2 diabetes drug Januvia (thought to have fewer side effects than existing products) and Gardasil (the first approved HPV vaccine) as “breakthrough” products worthy of winning a comparative effectiveness test.

Merck is smart to be ahead of the curve. The CBO report endorsing comparative effectiveness is an important political step in creating a national effort. But Clark is right: comparative effectiveness will be the wave of the future regardless of whether Congress creates a national agency, for one simple reason: FDA’s approval standards will demand it.