Not So NICE

NICE is being not so nice to Big Pharma.  NICE is the UK’s National Institute for Health and Clinical Excellence, an expert advisory committee to their National Health Service (NHS), and it “provides guidance, sets quality standards, and manages a national database to improve people’s health and prevent and treat ill health” (NICE).  One of its tasks is advising whether or not a new drug’s predicted improvement in patient care is worth the price sought by the drug’s maker and it recently made a splash by telling Bristol-Myers Squibb that it did not show that its new melanoma treatment, Yervoy, provided sufficient benefit (in terms of the number of patients responding and the length of the extension of their lives) to justify its about $125,000 per treatment cost (FiercePharma article).  Of course, NICE’s guidance is a draft and BMS will be submitting its counter arguments.  NICE’s chief executive, Sir Andrew Dillon, also offered BMS another approach:  “The manufacturer can also consider whether it wishes to reduce the acquisition cost to the NHS of the drug by proposing a patient access scheme.  Ipilimumab [Yervoy] currently costs around £80k per patient whether the treatment is effective for them or not (FiercePharma PR summary).”  Like a money-back guarantee.  This is not the first time NICE has not recommended the use of high-priced cancer drugs by the NHS.  As reported in the above-cited article, AstraZeneca’s Faslodex, Takeda’s Mepact, and Novartis’s Tasigna were turned down until Takeda and Novartis offered better pricing.

Here in the US, Yervoy has had impressive sales figures, $95 million in the quarter after its launch (Pharma Times article).  And if one assumes that all of the approximately 8000 annual cases of advanced melanoma are treated and the 20% that respond to the drug get the average life extension of 2 months (from 9 to 11 months, NY Times article), one arrives at about $100,000 for each month of extra life.  Fortunately, 84% of melanoma cases are caught earlier enough for local treatment (NCI Fact Sheet), so many will not need to check their insurers’ payment policies.   Another FiercePharma article reported that some analysts have predicted that Yervoy’s sales may exceed $6 billion annually (FiercePharma article), and I guess this (very high) estimated sales amount is due to “off label” use, that is, physicians trying the drug for every type of cancer, even though the drug has been approved only for metastatic melanoma and can cause serve and fatal adverse reactions (Yervoy Trial Summary).

So what does a high-priced, blockbuster cancer drug for a tiny target patient population that was determined (for now) to be too expensive for the UK’s single-payer healthcare system have to do with global health?  It offers me another chance to request again that the US biotech/pharma industry rethink, recalibrate, and realign their efforts away from the US market and toward the needs of the rest of the world (e.g., my posts of 10/20/09, 9/30/10, and 8/18/11).  Yervoy was the result of more than 20 years of development, starting with the discovery of the inhibition of T cell’s responses at UC Berkeley through four biotech companies and finally a product development partnership and an acquisition deal involving Medarex and BMS (well told by Martin Lehr at Osage University Partners blog, Lehr post), and the idea among all involved that such a drug would be good for patients and turn a profit.  In global health, it’s clear that new drugs are needed and profitability is elusive.  Bruce Booth pointed out in a recent post (Life Sci VC), biotech investors and managers need to rethink what they promise and how they spend their capital to escape the industry’s current malaise and despair.  He offered six specific actions but not looking for new markets.  My question to him, and the many smart people in academia and the biotech/pharma industry, why not turn global health problems into business opportunities?

 

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