The Healthcare Round-Up: May 5 – May 12

Pharmaceutical Lemonade: Revitalizing “failed” pharmaceuticals isn’t new. Successful medicines like Evista, AZT, Viagra, and thalidomide have all been repurposed. But with pharmaceutical R&D departments under pressure to improve their productivity, the goal of resurrecting drug candidates that may have failed in their first indication is gaining steam—especially if there are ways to do the scientific studies on someone else’s dime. That’s essentially what the National Insitutes of Health is doing with its $20 million grant initiative.

Here’s how it works. Three drug companies –Pfizer, AstraZeneca, and Eli Lilly—have donated a total of two dozen molecules previously deprioritized that are known to be safe. Academics interested in studying these compounds further can apply for specific grant funding and have the right to publish non-confidential findings. The academic groups will also retain some intellectual property rights; importantly the company that originally developed the molecule retains rights to the actual compound. The hope is that if researchers find a new use for an old drug, the drug’s originator will see enough promise to license the new intellectual property and fund additional trials.

While the consortium includes just three biopharmas now, the NIH hopes other drugmakers will donate additional compounds. It’s hardly surprising to discover Eli Lilly, AstraZeneca, and Pfizer are the initial collaborators. Eli Lilly, for instance, has spent the last two years building a web portal that allows outside researchers to submit compounds for interrogation using its proprietary drug-discovery assays, while Pfizer has inked repurposing collaborations with specific universities before. Meantime, AstraZeneca, which recently saw long-time CEO David Brennan depart, needs to up its R&D productivity any way it can. If even just one molecule pans out, the resulting lemonade could make the other drug lemons seem a bit sweeter.

• Read the report in the Nature magazine blog here
• Read the story from Science magazine here
• Check out the program details from the NIH’s project page
• For fun, scroll over to the Haystack Blog to see NIH’s champion of repurposing, Francis Collins, at TEDMED.

Will Value-Based Insurance Design Be Applied to Specialty Drugs? You can bet payers are talking about the notion, especially since the spend associated with specialty drugs is on a dramatic uptick. According to IMS Health, specialty drug prescriptions account for a mere 1% of all written prescriptions but make up 17% of drug spending. (Express Scripts 2011 Drug trend report has similar, depressing details.) And given biopharmas are refocusing from primary care arenas like hypertension and depression into inflammation, multiple sclerosis, and oncology, the expectation is growth of specialty drug spending will further accelerate with the advent of new medicines. What are payers and employers to do?

According to this week’s Washington Post, one potentially applicable strategy comes via “value-based insurance design,” or V-BID.  The concept is fairly straightforward: treatments that are evaluated by the insurer to provide proven clinical benefits are free, or cost patients less than those that are deemed less effective. V-BID is currently being applied to chronic conditions.  According to a survey conducted by HR consultant Mercer, 17% of all employers with over 500 employees applied V-BID medications that treat diabetes, high blood pressure and high cholesterol.  Though no one is using V-BID for specialty drugs right now, its application could make a big difference in pushing patients toward treatments that have proven their clinical utility in real world settings.

This would put more pressure on biopharmas to differentiate new to market products via payer-friendly endpoints, including total cost of care. Still, historically V-BID hasn’t been an easy sell to patients. Speaking at the Academy of Managed Care Pharmacy in April, SelectHealth’s Formulary and Contract manager Jeff Dunn, noted his group created this kind of plan to cover oncology products but didn’t find much traction for it in the marketplace “even though V-BID applies more to specialty than primary care.” The trend requiring patients to share more of the costs associated with specialty drug scripts may mean the time is right to rethink V-BID in oncology. But says Dunn, such plans must also focus on long-term outcomes and the total cost picture, including reducing indirect costs. –Ellen Licking and HB

• Read the story in the Washington Post here
• Read more about Value Based Insurance Design from Managed Care

Pfizer and investors shout hurRAy for tofacitinib: On Wednesday, the Food and Drug Administration’s arthritis advisory committee voted 8-2 in support of approving tofacitinib, Pfizer’s new oral, rheumatoid arthritis treatment.  The FDA will make an official decision before tofacitinib’s PDUFA date in August. Overall, the panel’s recommendation wasn’t surprising, though safety concerns raised during the discussion may blunt the uptake of the drug in the marketplace. Specifically, the panel supported the lower (5mg over 10mg) dosage and recommended that initially tofacitinib’s use be limited to patients who are refractory to TNF-alpha therapies like Humira, Enbrel, and Remicade. That’s because the drug comes with increased side-effects, including higher risks of lymphoma, liver and kidney damage, and infection. Meanwhile, analysts note that many of these safety concerns are shared by current treatment options for RA. Pfizer’s treatment is the first in a new class of drugs called JAK inhibitors that block signals activating immune and inflammatory responses in the body.

The drug’s dosing could be a big part of  ofacitinib’s competitive edge since unlike its biologic competitors which are infused or injected, tofacitinib can be administered as a twice daily pill. Expect payers to watch this drug closely, especially if Pfizer chooses to price it on par with competing biologics. Even in the TNF-alpha refractory market, Pfizer could face an uphill battle when it comes to market adoption. Note that many insurers have established lucrative rebate programs (particularly with Abbott around Humira) that provide disincentives to placing tofacitinib on a more friendly drug tier. It wouldn’t be surprising to see Pfizer launch the product with a drug co-pay card or substantial co-pay assistance program.—EL & HB

• Read the report from Reuters here.
• Here’s the press release from Pfizer.

The cost of maintenance:  Multiple myeloma is an aggressive condition resulting from the accumulation of white blood cells in the bone marrow, which hinders the production of healthy blood cells.  Extending the period of remission after initial treatments with transplants and drugs, known as ‘maintenance therapy,’ is the most successful way of increasing myeloma survival rates.  However, efforts to increase progression-free and overall survival have been hindered by toxic side effects of current maintenance treatments.  Three new studies have shown that Revlimid (lenalidomide) significantly improves progression-free survival in patients with myeloma. (Two of the three trials were funded in part by Celgene, the manufacuturer of Revlimid; the third study was sponsored by the National Cancer Institute.)

Revlimid is an immune-modulating agent that kills diseased cells in the bone marrow and helps bone marrow produce healthy cells. The report, published in the New England Journal of Medicine, presents data demonstrating that progression-free survival increased by about fifteen months and the three-year survival ranged from 70% to 88%. The trials were so successful that the results were unblinded ahead of schedule and some patients were switched from the placebo to the active drug.  How this drug will fare on the market remains to be seen. Payers are wary given the drug’s high price tag; clinicians may be too since researchers also found that Revlimid doubled the risk of a second cancer occurring. Further complicating the story: it’s not yet clear whether the drug lengthens  overall survival and there are no data showing quality of life gains proportionate to the cost of the treatment.

• Read the LA Times article here
• Read the NEJM article here