New Big Pharma Economies of Scale: Less Patients Needed to Reach Blockbuster Sales

New Big Pharma Economies of Scale: Less Patients Needed to Reach Blockbuster Sales

"Meet the new blockbuster," reports the Wall Street Journal; ie, drugs that treat intractable diseases afflicting "small numbers of patients shown by testing to likely benefit from the drug. Such targeted therapies can be brought to market faster and at less cost, and health plans will pay high prices even for long courses of treatment" (find the article here).

One such drug is Pfizer's Xalkori (crizotinib), a "newly approved for a rare form of lung cancer, for which Pfizer plans to charge $115,200 a year per patient."

At that rate, Pfizer needs only about 9,000 patients worldwide to generate $1 billion in annual sales of Xalkori. In comparison, 1,671,000 Lipitor patients are required to generate the same sales figure. I demonstrate this in the following chart, which requires a logarithmic scale to represent both these numbers visibly on the same chart (see chart below).

Meet the New Big Pharma Economies of Scale: A smaller market can provide blockbuster sales as long as health plans back expensive therapies.

The catch is having diagnostic tests that pinpoint patients most likely to benefit.

Pfizer seems confident it can do this. "There's been a change of paradigm," said a Pfizer researcher. "The new school of thought is, 'If you find the patients that the drug will work in, and if you see enough benefit, we will find a way to get this to market.'"

The new drug development "paradigm" requires a new marketing paradigm as well. That marketing paradigm will focus almost exclusively on medical specialists such as oncologists.

Under the new marketing paradigm it will be difficult to justify broadcast direct-to-consumer (DTC) advertising (eg, TV) because it will cost too much to reach the small group of potential patients with such a broad brush (my guess is that pharma marketers only spend a lot on broadcast DTC when the target audience is greater than 10% of the adult population).

The Internet and especially social media is ideally suited to marketing to a small community of patients such as Linnea Duff who took crizotinib in a clinical trial. Linnea was featured in the Wall Street Journal article. Not mentioned in the article, however, was the fact that Linnea writes the "life and breath: living with lung cancer" blog, which she started during her clinical trial experience. The blog prominently features a "Pfizer Video" (see here).

I don't know if Pfizer paid Linnea to include the video on her blog -- she doesn't say one way or the other, although she did NOT include this equally nice video from the Massachusetts General Hospital (MGH), which ran the clinical trial in which Linnea participated. That video is available on YouTube (here).

I wish Linnea the best of luck -- she is still terminally ill and is "happy each day that she is given" as a result of her treatment.

Her story, however, is a powerful marketing tool and I am sure the future of pharma marketing will include many such patient stories that can circulate online among close-knit patient communities that previously were "orphans"; ie, neglected by the pharmaceutical industry.

[This post originally appeared in Pharma Marketing Blog. 

Make sure you are reading the source to get the latest comments.]

Should the US Government Step in to Ease the Current Drug Shortage Crisis?

Should the US Government Step in to Ease the Current Drug Shortage Crisis?

"The drug industry is floundering in its ability to provide the public with many of the basic medicines that are absolutely required for the treatment of a host of diseases," said Paul Torrence, former Section Chief, MIH, in a recent OpEd piece (see here).

Torrence called for a National Institute of People's Medicine that "would ensure that drug inventories are always well stocked. It would additionally be the driver and funder of cutting-edge drug discovery and development for antibiotics. Working through out-sourcing and contract mechanisms, the NIPM could rejuvenate research funds-deprived academics and mobilize small pharma to manufacture requisite medicines.

According to the FDA, "In 2010, there were 178 drug shortages reported to the U.S. Food and Drug Administration, 132 of which involved sterile injectable drugs. In 2011, FDA has continued to see an increasing number of shortages, especially those involving older sterile injectable drugs. These shortages have involved cancer drugs, anesthetics used for patients undergoing surgery, as well as drugs needed for emergency medicine, and electrolytes needed for patients on IV feeding" (see Drug Shortage FAQs).

Various causes of the current crisis have been suggested: (1) manufacturing quality issues, (2) market manipulation (eg, price gouging), (3) mergers of pharma companies who cut out low profit margin drug lines, and (4) lack of profits to be made from certain generic drugs.

Whatever the cause, the American Society of Health-System Pharmacists (ASHP) calls the current drug shortage in the US a "crisis" (view this video -- interview at 36 mins, 30 seconds).

The last time we heard of a crisis affecting the entire nation was the 2008 "financial" crisis. That was met with swift action by the US government, which intervened in the market to help ward off the crisis in lending (ie, shortage of money).

If the government can address a national money shortage crisis, why can't it also address a national drug shortage crisis?

Can the United States Ensure an Adequate Supply of Critical Medications?

That's the question ASHP asked in an FDLI Food & Drug Policy Forum article (attached to above cited post), the introduction to which states:

"This dramatic rise in the extent, duration and severity of shortages is occurring in an environment that is characterized by a near absence of communication between drug manufacturers and the Food and Drug Administration (FDA). This lack of transparency is a significant barrier to efforts to address drug shortages, and it represents a real and growing danger to patient safety. FDA has worked diligently to address this issue, but this work is hampered by the agency’s inability to require reporting of information that could be instrumental in minimizing the impact of a shortage or averting it all together."

More resources:

• Cancer drug shortages getting worse, FDA says (USA Today)


• Cancer Drug Shortage: Why Is This Not Front-Page News? (Health Beat Blog)

[This post originally appeared in Pharma Marketing Blog. 

Make sure you are reading the source to get the latest comments.]

There's Room for Only One Osteoporosis Celebrity Spokeswoman: Sally Field Is Out, Blythe Danner Is In

There's Room for Only One Osteoporosis Celebrity Spokeswoman: Sally Field Is Out, Blythe Danner Is In

Amgen -- the company that along with Pfizer signed on Phil Mickelson to shill for ENBREL -- has now signed on Blythe Danner to shill for PROLIA, a drug to treat postmenopausal osteoporosis (see the press release here).

Here's Blythe on the "Act 2 Reduce Fractures" fully-branded web site (click image for larger view):

You are probably not OLD enough to know who Blythe Danner is, but postmenopausal women probably remember her in such classics as To Kill a Clown (1972), or as Robert De Niro's wife in the acclaimed series Meet the Parents, Meet the Fockers, and Little Fockers. If you are not yet of menopausal age, you no doubt have heard of Blythe's equallly environmentally friendly daughter, Gwyneth Paltrow.

Depending on the patent expiry of PROLIA, Gwyneth might one day also be a PROLIA spokeswoman. Gwyneth is currently 39 years old, whereas Blythe is 68. Hmmm... 29 years difference. By the time Gwyenth is menopausal PROLIA is sure to be off patent -- unless, that is, AMGEN comes up with a new formulation for the drug.

It seems there's not enough room in the postmenopausal osteoporosis celebrity spokeswomen market for two aging stars. Sally Field, who shilled for BONIVA for many years, is no where to be seen on the BONIVA web site. She has been replaced by generic postmenopausal women as in the screen shot below:

Cute, but no Sally Field!

Come to think of it, I haven't seen Sally on TV in a long while. I mean on a TV commercial for BONIVA. I look forward to seeing Blythe, however. Maybe Gwyneth will do a cameo appearance?

Unlike Sally, Blythe has never won an Oscar. Her spokesperson paycheck from AMGEN, therefore, must be much less than the one Sally received from MERCK. My guess is that AMGEN shot most of its celebrity spokesperson wad when it hired Mickelson (see "Amgen Blows Its Marketing Budget on Phil Mickelson Campaign").

Google's Settlement with Justice Department Paves Way for FDA Social Media Guidelines

Google's Settlement with Justice Department Paves Way for FDA Social Media Guidelines

Google has agreed to pay $500 million to settle DOJ charges. In the settlement, Google acknowledged that it helped illegal online pharmacies target ads through its AdWords platform. It was one of the largest forfeitures ever paid in the U.S. (see "Google Settles with DOJ - Admits Aiding Illegal Online Drug Sales").

This will help the pharmaceutical industry and FDA in their long-standing battle against US citizens buying drugs online from Canadian pharmacies.

It will also pave the way for the FDA to release long-awaited guidelines for the use of Google Adwords and other "space-limited" online applications (eg, Twitter) by the pharmaceutical industry for branded drug promotions.

I pointed out previously (see here) that as part of the DOJ criminal investigation, undercover agents for the Food and Drug Administration contacted Google posing as representatives from rogue Internet pharmacies.

I suggested that because of FDA's involvement in this case, the agency delayed issuing guidance relating to the proper use of Google Adwords for branded Rx advertising. FDA did this -- IMHO -- to force Google to the bargaining table and to ultimate accept the draconian terms mentioned above. In other words, FDA was holding Google's pharma Adword business "hostage" until a settlement was reached.

Recall that the brouhaha with Adwords as far as pharma marketers were concerned all started with FDA issuing those 14 warning letters in April 2009. These letters were all about Google's Adwords. I had also pointed out long ago that Google was aiding and abetting illegal pharma Adwords by suggesting exactly the format that the FDA later found violative (see "That Girl from Google").

Now that Google settled, FDA should be willing to give back to the search engine giant its pharma Adword business, which was substantial prior to the 14 letters.

P.S. Back in April 2009, shortly after the FDA sent out the 14 letters, I asked this question: "WHY DID IT TAKE THE FDA THIS LONG TO GO AFTER VIOLATIVE ADWORDS WHEN I WARNED THEM ABOUT THIS AS FAR BACK AS 2006?" (see here).

At that time, I thought it had something to do with the new administration in Washington, DC. But I learn now from the DOJ press release (here) that "In 2009, after Google became aware of the investigation by the Rhode Island U.S. Attorney’s Office and the FDA/OCI Rhode Island Task Force of its advertising practices in the online pharmacy area, and as a result of that investigation, Google took a number of steps to prevent the unlawful sale of prescription drugs by online pharmacies to U.S. consumers."

Maybe the release of the 14 letters was the incentive Google needed to "take a number of steps."