3 ways to sink a new drug

I don't just rant about methods and evidence -- in my work life I also rant about health economics and outcomes! This is why I was so interested in this post by the health economist Ulf Staginnus called
"New Models for Market Access." I want to give a hat tip to Healtheconomics.com for pointing me here.

The thesis of the article is that we need to refocus our discussion from market access to true innovation in the biopharma sector. There are some priceless quotes here, like this one, for example:

It is amusing, at least to me, to see the continued flood of articles, consultant presentations, blogs, congress announcements, workshops, summits, reorganizations, speeches, etc. all over the place, basically suggesting how the industry just needs to throw a few more people with fancy titles here and there, coupled with slight organizational changes, onto the problem and involve stakeholders and—guess what?!—actually talk to patients and perhaps even payers and all of a sudden, like Alice in Wonderland, everything will be good, after all.

The uncomfortable truth is, it won't be. All this “noise” is only good for one thing, paying the bills of the consultants, which is fine, too, as I have been one myself so I can understand. But it will not address the problem the research-based pharmaceutical industry and its employees are facing. Without a substantial increase in R&D productivity, the pharmaceutical industry's survival (let alone its continued growth prospects), at least in its current form, is in great jeopardy.

Don't you love it? It is hard to disagree. He also calls for more of a focus on the long-term returns than the short-term (duh!), as well as more internal honesty, or having the courage to stand up to the pathologic internal enthusiasm about a late-stage product that will obviously go nowhere. And all of this is on target.

He has this to say about health economics and outcomes and such:

Of course, you need experience in areas such as HE, outcomes research, pricing, economics, policy, advocacy, etc. and all needs to work in sync and early on and with the payer in mind and, yes, most people have understood that by now. So the problem is essentially not in the capabilities, although some are more advanced than others, but rather in the company cultures.

And this, I think, is where I have to disagree with him. In my experience there are glaring deficits in the approach to HEOR within biopharma, though of course there are exceptions to the rule. It starts with the fact that disease burden, and especially its costs, are initially assessed through less than, shall we say, rigorous methods. I have seen this critical information get pieced together through market "research", where 5-10 "thought leaders" are asked for their opinions, and the quantification is based on this tiny non-representative sample of nothing more than guesses. This is a shame because the data usually exist which can give a much more bona fide estimate of the extent of the problem.

The second problem is that articulating the value proposition of a nascent technology is usually an afterthought. In fact it is self-evident that drug pricing must be fed using the information on the burden of disease, and the impact the new technology can make in mitigating such burden. Unfortunately, time and time again I see companies backing into a price simply in reaction to what their Boards perceive the returns should be. And frequently this is based on the overly optimistic market projections flowing from, you guessed it, market "research."

So, the direct result of all this short-sightedness and business as usual is that even innovative useful products are driven into oblivion because there is no realistic look at what the technology is worth or where best to use it. And fixing the problem after the drug or device is on the market is a much bigger challenge for several reasons. First, the acquisition costs of new technologies are bound to be higher than of those already in use. This puts them at a disadvantage in that they get niched into populations that have much greater burdens of illness and therefore less of a chance of doing well. In other words, they are used as a last ditch therapy, which very rarely ends well. Ironically, these are usually not the populations who were studied in the pre-approval studies, and thus the use turns out to be off-label. But here is the real problem: When these technologies are in the "kitchen sink" category, they will almost always end up looking worse in terms of the outcomes than their older counterparts. And to the untrained eye, or an eye who does not have the time to discern the truth, particularly in the setting of perceived high expenses on the new product, this rings the death toll for the drug. But the reality, of course, is that the abysmal outcomes are the result of confounding by indication, where the drug was inappropriately given to those patients who were very unlikely to benefit from in the first place. But you see how this early lack of attention to the articulation of appropriate populations and health economic data can snowball into failure of a promising therapy.

So, if you want your drug to fail, do the opposite of what I recommend below. In other words DO NOT
1. Develop your market understanding
Do it not from the opinions of a handful of "experts" -- experts will rarely tell you the truth. Instead, do epidemiology studies to understand your population and its subpopulations so as to get the most reasonable idea of the disease.
2. Start thinking about the value proposition early 
At the end of a successful Phase 2 program is a good time to do this. The surprise to most companies is how little HEOR studies cost in comparison with their clinical trials program. Yet, as you can see from above, this drop in the ocean can make or break a product.
3. Focus on transparent pricing methods
When pricing the technology, be very very sure that you have all of the ducks in a row, meaning:
                    a. do understand your market 
                    b. do understand the burden and costs of the disease
                    c. do understand how your product impacts these costs
                    d. do price the product to reflect this balance
It is truly embarrassing to have to admit that your price reflects nothing more than the greed of your investors. Trust me, you will not score points with your customers.

Staginnus makes one other important point which I generally agree with:

And let's face it, if you need a major workshop and intensive external “coaching” to help define the value of your product … well, there actually is little to none. If it was really good, it would have been obvious from the start. So maybe we ought to stop beating around the bush and move on if there is nothing to be done anymore. 

There is a nuance here, however, as in most things. Given what I have said above, products are more likely to gut than sell themselves. So, while I agree that you do not need a throng of consultants in suits and hair gel to pollute your offices, you do need to understand how to articulate this value, even when it appears obvious.

          

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Why we need collaborations across healthcare sectors

I want to digress from our recent focus on methods and talk a bit about conflict of interest (COI for short). There has been a lot in the press lately about doctors taking money from the biopharmaceutical manufacturers, and doctors inserting unnecessary hardware into patients' hearts and spines. All of this has been happening against the background of a low hum of an ongoing discussion of what constitutes a COI, how much is too much and for what (for example, can a doc who takes research and education dollars from a manufacturer with an interest in anticoagulation sit on a committee that develops the guidelines for prevention of thromboembolic disease?), and how to mitigate these ubiquitous and pesky COIs.

In some ways watching this discussion has been amusing, while in others it has been downright sad. Medical journals, while insisting that advertising money is OK to take (presumably because the editorial and marketing offices are separated by some sort of a fire wall), though professional societies should not be able to take this tainted education money. Professional societies, on the other hand, are running away from the accusations by tightening their continuing medical education (CME) criteria and scrambling to replace the lavish budgets derived from pharma to develop their coveted evidence-based practice guidelines. And while all the pots are calling all the kettles black, academic researchers are being barred from collaborating with the industry on research projects, and industry researchers are being precluded from presenting their data at professional society meetings. While all the time the public is being whipped into lather about these alleged systematic transgressions, and forced to cheer for the ensuing retribution.

But, like many things in life, and especially stuff that we discuss on this blog, this issue is neither black nor white. Don't take me wrong: I am not condoning the egregious excesses of greed demonstrated by some members of my hallowed profession. If you have been reading my blog for some time, you know that I do not dispute the shameful reality of many breeches of public trust. I am an ardent supporter of exposing these breeches and of harsh punishments that they deserve. This is not what I am talking about here.

I am much more concerned about the one-sided story that we have been hearing about pharma-academic collaborations. Because of the persecutory nature of public opinion, some institutions are now shying away from such collaborations. This attitude is akin to navigating a treacherous road while looking in the rearview mirror. Yes, there have been transgressions, yes there has been greed and even scientific fraud in the name of money. Does this mean that we need to stop everything and come up with an entirely new way of managing these risks? Absolutely! Does this mean that we have to get rid of all pharma-academic collaborations? Absolutely not! In my humble opinion, erecting non-scaleable walls between these two groups is a big mistake. Here is why.

First, let me make a disclaimer: I do have active ongoing collaborations with multiple manufacturers. I do not take speaking or other promotional money, but limit myself to consulting and research grant funding. I also do a good deal of unfunded research, and I have never taken a penny for any of my blogging or blogging-related activities. And here is the crux of the matter: In this world of über-subspecialization, with the expertise being demographically and geographically diffuse, how can we afford not to collaborate across different types of organizations with different types of capabilities? Can we really afford to leave all of therapeutic development in the hands of organizations whose overarching purpose is to make money? And equally importantly, can we afford to continue this fragmented model of medical development without any thought to integration of the needs of all of the stake holders? I think not. Just as we are reaping the fruit of electronic medical record development in isolation from the end-user, so this isolation of research effort will lead to even less coherence in medicine. And unless we are ready to socialize our entire healthcare system, it seems naïve to expect that this one sector will acquiesce and start working outside of our coveted free market for the good of humankind alone.

My readers know that I am not an industry apologist. On the contrary, I have said many times that there has been bad behavior across all the sectors of healthcare, starting with biopharma. But if we want to advance rather than stagnate and regress, we need robust collaborations. We also need higher ethical standards and greater professionalism to keep public's health as our top priority.

There is COI everywhere, and, while financial COI is most visible, it is the more hidden COI that is most insidious. An hidden COI can be intellectual, reputational, ego-driven, career-mediated, etc. It is incumbent on us all in this complex world to ask questions and mitigate any ill effects of any cognitive biases, including those created by COI. Ultimately, as I have begun to realize of late, nothing will replace an educated and empowered patient: This is the only model that can provide appropriate checks and balances for our oftentimes misaligned and perverse incentives, both academic and economic.

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