The drug industry is usually out front in assisting disaster relief, and many manufacturers have already come forth with major donations of money and supplies to Haiti in the aftermath of this week's earthquake.

Abbott will donate $1 million and says it has donated drugs that are already "on the ground" in Haiti. 

In this digital era, we ask a lot more of you, our readers--to answer poll questions, provide feedback on articles, and most importantly to provide input for our surveys on key industry topics. Well, here we go again. There are two surveys that we'd love to get your input on:

In its neverending fight against both poor manufacturing practices and the manufacture and marketing of unapproved drugs, FDA has filed a Consent Decree and expects courts to prohibit Activis’ Totowa, New Jersey facility from further production.

End Pharma Parochialism: Think Globally, Act Globally

At a meeting at DIA in Boston yesterday, Mike Svinte, President of Global Life Sciences at IBM provided a sneak peek and insights into a new report probing CEO challenges and concerns and their implications. The report, which is due to be released next month, will distill interviews with more than 1,100 CEOs from around the world, 40 of them heading life sciences companies, including mid-sized companies, in North America, Europe and Asia. Not that their individual names can or will be disclosed, but the CEO’s appeared very willing to engage in open dialogue and creative discussion of issues. "The interviews were a bit like therapy for some,” Svinte said.

Nearly a quarter of the life sciences CEOs interviewed admit that they have had no, or only minimal success at managing change within their organizations.  At the same time, IBM analysts found, they are hungry for change.  The study suggests that CEOs need to “seed” their organizations with challenges and to gain inspiration by examples from other industries that have already undergone transformation. They will then need to convince their companies that change is necessary, and cultivate enthusiasm for it

IBM’s research shows that life sciences companies’ financial performance tends to be better when CEOs encourage change and invest in new areas, Svinte said. The questions are where to invest and why, and how will pharma’s industry model and business model need to change for the future. Will pharma companies be the "dinosaurs" predicted years ago---holding companies that outsource all key functions?

Not enough CEO’s have actively wrestled with these questions, the survey suggests.

Talent shortages top the list of their concerns---63% of pharma CEOs named this the major problem (compared with 48% in other industries. Regulatory issues, as one might expect, came in second (53% vs. 45% for other industries).

One factor driving change, CEO respondents say, is a better informed consumer, who demands more as he or she pays more."We’re experiencing increased pressure related to environmental initiatives,” wrote one anonymous CEO from
North America.“Transparency is being driven by the government as well as by consumers. There is great risk in not focusing on rising consumer expectations."

As pharma moves from the old multinational model to a globally integrated one, Svinte said, issues of global regulation, intellectual property protection and talent shortages in India, China and other regions of the world may pose risk but more CEO's say they are investing there.

Three quarters of pharma CEOs are pursuing innovations in business models. More than half are focused on enterprise model innovation or reconfiguring the breakdown between what work is done inhouse and what is outsourced. Only 17% were focused on new industry model innovations, including those that will involve diagnostics and targeted or personalized medicine, and will require new revenue and enterprise models.  Among blue sky possibilities discussed was the concept of consumers paying for a therapy only if it worked.  (Ha! Don’t hold your breath waiting for this to happen – brief editorial interjection)

62% of the life sciences CEOs surveyed also see rising expectations of corporate social responsibility as a positive, rather than a negative one. But nearly a quarter of respondents don’t expect such work to have any impact on their corporate bottom lines. IBM analysts suspect that new dimensions of corporate responsibility may not yet have reached pharma CEOs’ radar screens.Pharma CEO’s may recognize the drug industry’s duty to “do no harm,” but they may not be able to measure the footprint that pharma has on society, analysts suggest, pointing to the issue of drug residues in the world’s municipal water supplies.

Knowledge management and the drive to turn data into information are becoming more important to a growing number of CEOs, the study found, since these establish a framework for more collaboration and cross-functional product development.

Manufacturing and supply chain management are becoming a priority for more CEO’s, Svinte said, although they were not probed in depth, by themselves, in this survey.

Among other subjects that came up at this discussion was IBM’s patient-centered healthcare project,

Also talked about was the MidEast Consortium on Infectious Diseases, a program underway in the
Middle East that is using supercomputers to predict future pandemics and the potential impact of changes within patient population.

Look for more detailed reporting on the research and trends in future issues of our magazine and online.

And now for something completely different (for any opera fans or Italophiles out there).

AMS

On Tuesday afternoon, a panel discussed ways in which corporations might be able to stimulate the development of more therapies for serious diseases----the world’s top killers such as malaria. The topic is one that I’m very interested, but, unfortunately, I arrived late and missed much of the discussion.

Genzyme has been doing some pioneering work with orphan drugs and its Gaucher’s disease treatment, Cerezyme, has been profitable.

James Geraghty, SVP of International Development with Genzyme presumably discussed the company’s Humanitarian Assistance for Neglected Diseases Initiative, and efforts such as the one underway with the Oswaldo Cruz Foundation in Brazil.

Una Ryan, President and CEO of Avant Immunotherapeutics, Ltd., also participated in the discussion. Her company has been developing drugs for neglected diseases, including cholera and typhoid, as well as an HIV vaccine, in efforts funded by the Gates Foundation.

Elizabeth Bailey of Commons Capital works with venture capitalists to obtain funding for early stage drug development.  Currently, Commons is working with Gates, Rockefeller and  Lloyd's Foundations.to fund research into therapies for neglected diseases.  At the conference she discussed financing models(some of which were touched on in a 2005 paper, which came out of a workshop on this subject). Financing is most feasible in early stages, she said.

Dr. Ryan  agreed, and emphasized the importance of venture capital in funding these efforts. Big pharma or Big Bio is too locked into production schedules and unlikely to recoup investments, so, despite its worthiness, it’s a hard sell to management. Profitability is critical.

Vaccines are excellent candidates for attracting venture capital for global development, Dr. Ryan said. During the Q&A, someone in the audience spoke of the need to develop an infrastructure that would permit scientists in developing nations to develop innovator products, rather than “copy cat” products. Presumably, they won’t face the 10-year, billion-dollar hurdle that innovators face here.

AMS

Take two valium, get some anger-management counseling, and stop working for PhRMA....

I haven't been keeping up with the news too well lately.  But I was surprised to learn from PharmaMarketing blog and PharmaGossip that T.V. talk show host Montel Williams recently confronted a high school intern working for a Savannah, Georgia newspaper who had asked him a challenging question (something along the lines of "Why are prescription drug costs so high?") during a press conference. 

He was in town to promote a lower-cost prescription program.  Click here for more from FOX News.  When he found the reporter at his hotel (she was there covering another event), he probably suspected that she was stalking him and reportedly told her "I can look you up, find out where you live and blow you up." Way to go. What a fine example and what a way to talk to a young person.

John Mack, PharmaGossip and others have suggested that PhRMA fire Montel.

Mr. Williams, a spokesperson for PhRMA, suffers from MS.  Perhaps his loyalty to companies that are working on a cure for this terrible condition overcame his reason.  I wish him well in his treatments.

 But it now appears that he could have used a few other prescriptions, too. 

I don't want to think of PhRMA's public relations people as the gang that couldn't shoot straight, given the combined brain power and funding, but does PhRMA really need any more P.R. liabilities?  We've definitely seen some over the years---- remember that lame spy novel? 

Perhaps Montel will voluntarily step down, admit to having an anger-management problem (and thus open up a whole new spokesperson opportunity, once a treatment for rage is approved for DTC advertising) and issue a public, televised apology?

AMS

This comment was simply too good not to highlight.  At its heart, the following irrefutable logic:

"Capitalism drives the pharmaceutical industry, and it is foolish to think otherwise.  Where idealism denies profit there will be no further drugs.

In this context, does idealism really serve the interests of the third world? Is there not some better way that harnesses capitalism to noble causes?

I will personally concentrate my efforts in developing drugs for impotence and hair loss because I’m very tired of the ingratitude that the world shows when you actually try to help poor people in the developing world."

The entire comment posted below.  Thanks to this reader for sharing his views. Would anyone care to comment?

I find the Oxfam logic on this very suspect–from the heart and not from the head. The argument boils down to this: The pharmaceutical industry is passing up huge profits by not developing drugs for 3rd world diseases where the numbers of potential patients are huge.

The history of HIV/AIDS drugs tells the story very well, I think. Immense ammounts of money have been invested in HIV research, and resulted in a number of breakthrough drugs, though these drugs remain expensive to manufacture (e.g., the dose per patient per day is often several grams of a large, complicated API–that doesn’t come cheap). Even though most big pharma sell these drugs in africa at cost and in other developing countries at deeply discounted costs proportional to standard of living in each country (as Oxfam suggests is appropriate), the criticisms of “profiteering� remain prevalent and countries such as Thailand and Brazil are quick to push pharma to 0% profit on the drugs they sell using the WHO Trips agreement. From this, Oxfam further concludes that companies are “still not investing enough into researching and developing medicines for diseases that predominantly affect poor people in developing countries.�? If–as we learn from HIV–that pricing any drug above cost in the developing world is imoral, there is no profit in any drug that doesn’t serve the first world preferentially.

Capitalism drives the pharmaceutical industry, and it is foolish to think otherwise. Where idealism denys profit there will be no further drugs. In this context, does idealism really serve the interests of the third world? Is there not some better way that harnesses capitalism to noble causes?

I will personally concentrate my efforts in developing drugs for impotence and hair loss because I’m very tired of the ingratitude that the world shows when you actually try to help poor people in the developing world.

Oxfam just released a report on the development of drugs to treat the most prevalent diseases in developing nations.  For a summary and to download the report, click here. 

It cites an unnamed consulting group that has put a price tag on the neglect.  Does anyone know which consulting group that is?  Doesn't sound like any of the usual suspects to me...and it would be extremely enlightening to know how they came up with the figure.  Somehow it seems understated, given the hatred that the phrase "pharma industry" appears to inspire in some quarters.

This is another call to action for more pharma CEOs and top management.  Will stating it in terms of the potential "ROI" for taking steps to change the situation, the ROI language that management loves so well, get more of them respond? (Perhaps naming the source of the trillion-dollar-figure quote would have helped)

One small point of light?  Wyeth will begin supplying its Prevnar vaccine to WHO, Unicef and other international aid groups to help prevent pneumococcal infections in the developing world.  The company has changed its Pearl River operations from vial to prefilled syringes, and will begin producing Prevnar 13, a new form of the vaccine, but will use vial filling for this operation, since that form is still preferred in the areas involved, and it will supply the original form, Prevnar 7.

Below, an excerpt from Oxfam's summary statement.

"The industry is burying its head in the sand. More than 85% of world consumers are underserved or have no access to its medicines. The industry must recognize that charging high prices, quashing generic competition, developing medicines only for those rich enough to pay and fighting for harsher patent laws is an ineffective business strategy for new markets, as much as it is a moral outrage," said Jeremy Hobbs, Oxfam International Executive Director."Investors are worried about the industry’s performance. They know that emerging markets are key for the industry’s future growth but companies have been responding to the challenge of breaking into emerging markets in an ad-hoc and inconsistent way. This is bad for the industry and bad for poor people who are still facing devastating diseases like malaria, tuberculosis, asthma, cancer, and HIV/AIDS without affordable medicines," Hobbs said.           The report reveals shortcomings where the industry:

Has failed to implement a systematic and transparent tiered-pricing policy, where prices for all essential medicines are set according to people’s ability to pay;Continues largely to neglect research and development into diseases that predominantly affect poor people in developing countries;Continues to be inflexible in protecting intellectual property, including challenging poor countries in court to stop them using legal public health safeguards;

Continues to rely too heavily on donations to get affordable medicines to people, even though this is unsustainable and sometimes counter-productive.

Oxfam notes that some companies are offering differentiated prices but this is extremely limited and mainly for high-profile diseases such as HIV and AIDS. However, these offers are not systematic worldwide and are often still priced well above the means of people living in developing countries. Oxfam says that drug companies often adapt pricing in developing countries solely as a reflection of the publicity that surrounds the disease or the country.For instance, Abbott Laboratories was selling Kaletra a second line anti-retroviral medicine – at $2,200 per patient per year in low middle-income countries like Guatemala, where a person’s average wage is $2,400 a year. Only until Thailand, in response to the needs of poor HIV patients, issued a compulsory license to reduce the price of Kaletra to $1,000, did Abbott reduce the price of Kaletra worldwide to $1,000 per patient per year. Also in Thailand, French giant Sanofi-Aventis offered its cardiovascular disease medicine Plavix at a price that was 60 times more expensive than Emcure, the Indian generic version. In March 2007, it responded to Thailand’s use of compulsory licensing by offering a 70% cut.Oxfam’s report says that companies are still not investing enough into researching and developing medicines for diseases that predominantly affect poor people in developing countries. Between 1999 and 2004, there were only three new innovative drugs targeted at diseases affecting the developing world out of 163 medicines brought to the market.

For those of you who, like me, didn't know, Vanity Fair had a new guest editor this summer: the rock star and social activist, Bono (who says he would have become a journalist if the music thing hadn't worked out).  The magazine' July issue featured an outstanding section devoted entirely to Africa, including this article on antiretrovirals' Lazarus Effect on patients with AIDS. 

For an interview and more on Bono's guest editor stint, click here for a video clip.

President Bush has requested that spending on AIDS relief in Africa be doubled to $30 billion.  Laura Bush recently visited Africa to discuss AIDS and malaria efforts. On Monday, Bush discussed plans in an interview  for "Conversation on the Americas." 

-AMS