Friday, January 31, 2014

Deals Of The Week Looks at The Intersection Of Patient Empowerment, Generic Drugs, And Macaroni & Cheese

It’s a challenge to pick up an annual report or listen to a CEO present at a conference these days without reading or hearing something about “patients being at the center of everything we do.” But patient empowerment is a slippery concept. It means different things to different stakeholders.

To health insurers and policy mavens, it’s about providing consumers with information about health care delivery and payment options. To disease advocates, it’s about sparing no effort to make clinically meaningful, affordable therapies available to patients. To some investors, it’s about giving consumers a stake in the funding of medicines.

To drug companies, patient empowerment is all too often about educating consumers – via print and broadcast, online media and through the physicians they detail – about their proprietary drug and shielding them from information about competing drugs.

To explore the issue, “The Pink Sheet” recently talked with Harvard Medical School Professor Eric Campbell, a sociologist who heads the Mongan Institute for Health Policy at Massachusetts General Hospital. Among his research projects, Campbell and institute colleagues published an article in the Feb. 11, 2013 issue of JAMA Internal Medicine reporting on a survey that sheds an interesting light on patient empowerment.

The basic takeaway was that 37% of physicians surveyed (n=1,891) sometimes or often prescribed a brand-name drug at a patient’s request when a generic is available. Campbell commented, “[That] is a wasteful medical practice, and part of the reason that health care is so expensive.”

The survey turned up some interesting determinants of the surprisingly high cave-in rate. Forty-three percent of physicians in practice for more than 30 years acquiesced to patient demands for the brand drug, compared to 31% of physicians in practice 10 years or fewer. Fifty percent of internal medicine docs caved compared to specialties like pediatrics (17%), anesthesiology (20%), and general surgery (26%). And physicians in solo or two-person practices were significantly more disposed to cave to patient demands than those working in a hospital (46% versus 35%).

Not surprisingly, physician-industry relationships were positively associated with accommodating patient requests for brand-name drugs. In particular, physicians who received industry-provided food and/or beverages in their workplace or who got free drug samples were more likely to accede to patient demands. But the biggest predictor of the propensity to cave in was the frequency with which docs met with drug reps to stay up to date.

The survey leaves unanswered other questions, both about the physician-patient relationship and about how patients and physicians, as distinct groups, view generics versus branded drugs. For instance, wouldn’t drug companies and health care policy makers like to know whether patients, emboldened by information gleaned from social media and the Web, are requesting FDA-approved drugs with alternative mechanisms in place of the physician’s recommendation?

And wouldn’t all health care system stakeholders appreciate some hard data on patient views about generics? Do a majority see them as inferior to the brand? As less safe? Less prestigious? How well informed are patients about the concept of bioequivalence or about the clinical dossier required for approval of a generic drug? And the same goes for physicians – what are their views about generics?

Docs working in large, increasingly corporatized settings like hospitals or large physician groups seem to toe the line more when it comes to prescribing generics. As accountable care organizations gather steam, physicians will be economically incentivized to prescribe generics.

And other trends are at work that will nudge over-obliging physicians toward generics and away from brands. Formulary exclusion programs, such as have been instituted at pharmacy benefit managers like CVS Caremark Corp. and Express Scripts Inc., are targeting branded drugs in categories where there are generic alternatives. Caremark’s program, in its second year, has designated 70 drugs in its 2014 formulary as “not covered.” Express Scripts’ exclusion list, which began on Jan. 1 of this year, targets 48 drugs, including mega-brands like GlaxoSmithKline PLC’s Advair Diskus (fluticasone/salmeterol) and excludes more specialty products than Caremark.

The Sunshine Act, which went into effect in August 2013, prohibits drug industry value transfers to physicians. While it’s too early to say whether it’s casting an overall chill on industry interactions with physicians, some regional health systems like ThedaCare in Wisconsin are using the new law to ban drug rep visits and product samples even though neither are proscribed under the law. The trend over the past decade has been for larger academic centers to prohibit reps from leaving samples or, in some cases, from in-clinic visits altogether.

Meanwhile, the influx of generics in the wake of major brands going off-patent helped tamp down drug expenditures in 2012 from all sources of drug spending – public plans, private plans and out-of-pocket payments. The implementation of four-tier formularies, for instance among employer-sponsored plans, has helped constrain patient and physician use of brand-name drugs.

Campbell offered an insight into the poorly understood world of patient psychology as it pertains to evaluating and selecting a therapeutic option:

“I think people see generics and think of it like macaroni and cheese. If you buy generic macaroni and cheese at the grocery store, you know in advance that it won’t taste as good as the brand-name Kraft Macaroni & Cheese. You can see why some people might be reluctant to use generic drugs.” But then he hastens to point out a crucial difference: “In the drug world, they’ve actually proven that the generic macaroni and cheese is completely identical to the Kraft Macaroni & Cheese.” -- Mike Goodman

Meanwhile, here's a sampling of this week's choicest transactions, served piping hot:

Biogen Idec/UCB

Biogen Idec Inc. will be taking its multiple sclerosis portfolio into several Asian markets, along with its candidates for hemophilia A and B, under a commercialization pact signed with Belgium’s UCB SA on Jan. 30. Financial terms of the deal were not disclosed.

Under the agreement, UCB obtains the rights to commercialize six MS drugs in South Korea, Hong Kong, Malaysia, Thailand, Singapore and Taiwan, as well as Eloctate and Alprolix, Biogen’s investigational long-acting recombinant therapies for hemophilia A and B. In MS, the deal confers rights to fast-growing Tecfidera (dimethyl fumarate), blockbuster biologic therapies Avonex (interferon beta-1a) and Tysabri (natalizumab), Ampyra (dalfampridine), Plegridy (pegylated interferon-1a) and daclizumab. UCB also gets development and commercialization rights to all eight drugs in China.

During its year-end investor call Jan. 29, Biogen reported that Tecfidera had produced sales of $876 million worldwide in 2013; all but $12 million of that was realized in the U.S. The Weston, Mass.-based biotech expects Plegridy to obtain marketing approval this year in the U.S. and Europe, and Eloctate and Alprolix to obtain approval in the U.S., although it does not project meaningful revenues this year from the hemophilia drugs. --Joe Haas

Baxter/Xenetic Biosciences

Baxter International Inc. and the U.K.’s Xenetic Biosciences Inc. announced they were restructuring their 2005 collaboration to co-develop hemophilia drugs that could be administered less frequently than current therapies, perhaps once weekly. The expanded deal, announced Jan. 30, includes a $10 million equity investment by Baxter in its partner and also amends the terms of a licensing agreement, increasing the potential milestones payable to Xenetic to $100 million. The amended deal would increase sales royalties on any products reaching market, as well.

Xenetic CEO Scott Maguire said the company plans to use the money to advance its own pipeline assets, which include ErepoXen, a polysialylated formulation of erythropoietin for the treatment of anemia in pre-dialysis patients with chronic kidney disease, and OncoHist, a recombinant human histone H1.3 compound in development for refractory acute myeloid leukemia. The partnership with Baxter centers on using the biotech’s PolyXen technology platform to develop polysialylated blood-coagulation factors, including a reformulation of Factor VIII.

Baxter’s website notes the company has completed Phase I clinical trials of BAX 855, a longer-acting recombinant factor VIII protein for the treatment of hemophilia A based on the full-length ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] molecule. ADVATE is approved in more than 50 countries for hemophilia A, most recently China. --JH

AstraZeneca/FOB Synthesis

AstraZeneca PLC is delving further into antibiotic research through an option licensing deal with drug discovery company FOB Synthesis Inc. The deal, announced Jan. 27, will provide AstraZeneca with access to two of FOB Synthesis’ preclinical carbapenem antibiotic programs, FSI-1671 and FSI-1686, to potentially be combined with a preclinical beta lactamase inhibitor from AstraZeneca’s pipeline. AstraZeneca will develop the compounds through Phase I and then have an option to acquire them outright. The terms of the deal were not disclosed.

Carbapenem antibiotics are a backbone treatment for Gram-negative bacterial infections, but have grown less effective against drug resistant bacteria. FOB’s novel carbapenem products have demonstrated strong activity against Gram-negative infections in preclinical models. Combining an antibiotic like carbapenem with a beta lactamase inhibitor has been shown to help break down bacteria’s resistance to the drugs.

The field is one AstraZeneca knows well. The company already has a novel beta lactamase inhibitor avibactam in Phase III development in combination with the antibiotic ceftazidime in collaboration with Forest Laboratories Inc. The two are studying the drug in five Phase III studies for Gram-negative infections.

While the market for antibiotics that address Gram-positive infections has seen several new entries in recent years and there are several more antibiotics in late-stage development, the market for antibiotics that address Gram-negative infections has been slower to develop while the need for new treatments has grown dire. At least one analyst, ISI Group’s Umer Raffat, puts the market opportunity for antibiotics that treat resistant Gram-negative infections at $2.5 billion.--Jess Merrill


Galectin Therapeutics Inc. enjoyed a bump in its stock price during January, thanks in part to fellow fibrosis treatment developer Intercept Pharmaceuticals Inc.’s clinical success. On Jan. 27, Galectin teamed with cell-based assay developer SBH Sciences to form a joint venture that will investigate oral small-molecule galectin-3 inhibitors.

The two companies will share ownership of newly created, Georgia-based Galectin Sciences LLC. The company will develop a series of compounds SBH recently discovered that show potential in inhibiting galectin-3, one of several galectin proteins implicated in inflammatory diseases, organ scarring disorders and cancers. The collaborative venture will also attempt to discover new compounds using both companies’ expertise. Norcross, Ga.-based Galectin Therapeutics has two clinical compounds currently under development, but both are intravenous rather than oral.

Natick, Mass.-based SBH has provided contract research services to Galectin Therapeutics for more than a decade. Founded in 1997 to develop mammalian-derived recombinant cytokines, SBH now performs in vitro drug development and is a vendor of cytokine-measuring bioassays. Galectin Therapeutics was established in 2000, and was known as Pro-Pharmaceuticals Inc. until 2011. --Paul Bonanos

Actavis/Zhejiang Chiral Medicine Chemicals

Actavis PLC inked a deal with Zhejiang Chiral Medicine Chemicals Co., Ltd to divest its joint venture in China, Actavis Foshan China, the company announced Jan. 24. Terms of the deal were not disclosed. Weeks earlier Actavis CEO Paul Bisaro had said China was an "unfriendly environment" for biopharmaceuticals and that he would pull out of the country.

During the company’s Jan. 31 analyst day in New York, the company said it would continue operations in China with business partners, but it would focus on other emerging markets such as Russia, Brazil, Turkey and Southeast Asia. Global Operations President Bob Stewart told analysts that as the company focused more on supply chain rather than manufacturing, it took out a number of assets through sales and divestitures, and it would continue to do so. Along those lines, Actavis sold a facility in India, a JV in Russia, exited out of two facilities in China and divested operations in China.

“We will always make modifications based on portfolios,” Stewart said, adding, “the map continually evolves.”

"Actavis is focused on strengthening our investment in high-growth markets where our size and scale allow us to maintain a competitive presence with the leading companies in the market," said Actavis Pharma President Sigurdur Oli Olafsson.  "Our operations in Foshan were limited in scope and we believe that their value will be better capitalized on by Chiral, which will add manufacturing and marketing capabilities allowing them to expand their portfolio and strengthen their position in the Chinese market.”

CEO Paul Bisaro told analysts that the company has roughly $2 billion in cash and will look for strategic M&A that will focus on geographic expansion. --Tamra Sami

No comments: