While You Were Sweeping

Congratulations to the Red Sox and their fans, victorious in a 4-0 rout of the Rockies in the WS. Some of us were hoping for a little suspense, but oh well ... other news from the weekend that was, below.

• JP Garnier, one foot out the door at GSK, taking one for the (management) team, sort of. Check out the Times (London).
  
• The New York Times takes a look at which presidential candidates are drawing donations from the health care industry. Bucking recent trends, Democrats are outpacing Republicans.


• Pharmagossip knows what AZ's David Brennan is wearing this Hallowe'en ...
  
• Bayer-Schering's Betaseron ... double the dose shows no improvement over single dose and Teva's Copaxone.
  
• The Wall Street Journal ($$) asks whether Biogen Idec's pipeline is going to deliver the growth that a Big Pharma acquirer would need. Want to change your vote now?
  

(Photo by Jeff Gross/Getty Images)

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Buyer’s Remorse: No Love for Medicare Part D on the Campaign Trail

So Many Happy Faces! None are Running for President in 2008

The Medicare prescription drug benefit known as Part D has been an unmitigated blessing for Big Pharma at a time when good news has been hard to find. It has greatly expanded drug coverage for senior citizens, providing a boost in prescription volumes. And it has shifted a large chunk of the market out of the price controlled Medicaid program, giving a healthy margin bump for many blockbuster brands.

It is also a political orphan, one that will face an especially harsh winter as the primary phase of the Presidential campaign moves towards its climax.

The Democrats make no secret of how they feel about Part D. Remember price negotiation? The idea may have died in the Senate, but it will be reborn this fall once Congress finishes its serious legislative work. Expect hearings and reports criticizing Part D prices—with the themes trumpeted by the Democratic candidates on the campaign trail.

None of the front runners in the Democratic party supported Part D, though the thinking here is that they secretly love it. After all, the program pumps hundreds of billions of taxpayer dollars into federal health benefits while allowing the candidates to bash Republicans for catering to the profiteers in Big Pharma and the insurance industry.

The problem is, as Jeffrey Young writes in The Hill, even the Republican contenders have nothing nice to say about Part D. Its not that they are turning on the pharmaceutical industry per se, its just that they don’t see anything to gain from talking to conservative voters about a massive expansion to federal health care entitlements.

Its no different than the 2006 Congressional campaign, which featured Democrats around the country attacking Part D—and Republicans changing the subject. Supporters of Part D, like former CMS Administrator Tom Scully, claim that the Republican Party should have embraced the program during last year’s campaign, instead of running away from it. It certainly is hard to believe the GOP would have fared any worse in the elections if they had.

Still, if the Republican legislators who enacted Part D refused to brag about it in 2006, you can expect the Republican Presidential contenders to stay even farther away from it. As The Hill’s Young points out, one of the top tier GOP candidates—John McCain—actually voted against the law creating the program. Another, Fred Thompson, voted against earlier plans to create a drug benefit, but left the Senate before the Part D law passed in 2003. The rest of the leading Republican contenders were not in Congress when Part D passed and hence have no stake in defending the program.

So expect a winter of Democratic attacks on Part D, with little or no response from the Republican campaigns.

Once the Presidential campaign shifts gears to focus on the general election in November 2008—the party nominations could be locked up as early as the first week of February—the dynamics may change.

The Democratic nominee is sure to keep attacking Part D. But the Republican nominee may be more eager to counterpunch. With the nomination locked up, fear of alienating small-government conservatives may be less important than the opportunity to cast Part D as model for public/private partnerships in expanding health coverage across the US.

Until then, don’t expect too many kind words about Part D on the campaign trail.

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Hillary Clinton's FDA

Slow summer so far. Not a lot going on. Washington is ready to go on its August hibernation. So I thought I would drop this quick note to jumpstart some watercooler talk before everyone goes to the beach.

Democrats are champing at the bit at their chances of regaining the White House in 2008. While there will be trench warfare over Medicare Part D drug prices and universal healthcare, one area that's sure to change (I'm not going out on a limb here) is personnel.

While the candidates themselves probably don't have a clear idea of who they would choose to lead key government agencies, they at least know who they like and who they trust on certain public policy issues.

Therefore, I found it interesting to see who Hillary Clinton had standing beside her during a campaign appearance "block party" in Washington, D.C. in June. It was Susan Wood, former women's health head at FDA, who resigned from the agency in protest over the delay in approving the switch of the morning-after pill from prescription to OTC. Wood stood next to Clinton, along with many other prominent women, including former Secretary of State Madeline Albright, during the outdoor event, which took place in the heart of downtown. Wood has not been shy about her support for Clinton. And neither has Clinton been shy in her support for Wood. During FDA Commissioner Andrew von Eschenbach's confirmation hearing before the Senate Health Committee, Clinton singled out Wood, in attendance, for her courage in resigning her post over the morning-after pill.

Wood is now a research professor at the George Washington University School of Public Health and Health Services. Under President Hillary Clinton, would Wood go back to FDA? Would she consider the job of commissioner if Clinton calls her to duty? I asked her.

"The first is easy, I truly enjoyed working in government health policy for 15 years, and so would be happy to come back to FDA in the future if an opportunity ever arose," Wood said via email. "I haven't ever considered the second one, and it is so hypothetical I don't know how to answer it, sorry." I bet I know what she would answer to the second question, and it's this.

I wonder how the drug industry would react to a Susan Wood FDA?

Next: Sam Brownback's FDA

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Big Week For the Bushes

While President Bush hosts Russian President Vladimir Putin at the family’s tiny Kennebunkport bungalow , Jonathan Bush, a first cousin of the president, is having a fairly big week himself. Athenahealth Inc., the company he co-founded and leads, filed to go public. One of the few success stories to emerge from the e-health mania of the late 1990s, the Waltham, Mass.-based company—which manages billing and collections for physician offices—hopes to sell up to $86 million in stock. Athenahealth is a service, rather than a software company, although its service is Internet-enabled. Why bring this up in the IN VIVO blog? First, it gives us a chance to run dueling Bush photos. Second, Jonathan Bush matches his cousin in swagger and has suggested in the past that VCs don’t have the fortitude to invest in health care services/IT companies like his. We recently wondered aloud whether David Brailer's new $700m effort will alter that perception. Third, this will be an important IPO. A poor showing could be a setback for the health care IT/services industry.

Now back to your regularly scheduled pharma discussion.

p.s. In case you were wondering what global warming could mean to future Bushes. We suspect the Crawford Ranch is safe.

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What Drug Makers Can Learn from Vaccines

Drug executives worried about rising safety hurdles, demands for larger trials and politicians’ growing influence on drug regulation could do worse than learn from their counterparts in vaccines.

Massive trial sizes and squeaky-clean safety have been part of the game in vaccines for years—since these are products given to millions of healthy individuals. “We’re used to these challenges,” Didier Hoch, President of Sanofi Pasteur MSD (SPMSD) told IN VIVO Blog this week.

And they’re used to dealing with a few of the other challenges drug firms are now facing, too, including demands for sound health economic and epidemiological data to support reimbursement and the need to engage not just with doctors, but a range of other stakeholders, too, including payors, policy-makers, patients and health workers.

As drug companies stumble, they too have to make the shift, as marketing gurus call it, from "share-of-voice" to "share-of-care". Many are still struggling to supply adequate cost-effectiveness data (and may as a result resort to risk-sharing reimbursement deals like Janssen-Cilag's UK proposal for Velcade).

Vaccines companies are used to dealing with politicians and policy-makers, since vaccines typically fit into national health care strategies. "We're already political," notes Hoch. "We already have the broader, global outlook" of how a product can improve public health and save costs, and the data to support that.

Hoch can point with confidence to cervical cancer vaccine Gardasil, which parent company Merck & Co. launched in the US last year and which is on track for blockbuster status, according to analysts. Indeed, Gardasil illustrates how vaccine products, as well as practices, are closing the gap with therapeutics--in terms of innovation, and price.

Gardasil is getting to market across Europe almost as fast as a classical drug (far faster than some traditional vaccines such as Wyeth's Prevnar against pneumococcal bacteria), according to Hoch, largely because preventing cancer is relatively novel. The crop of epidemiological and health economic data, plus the 30,000 + trial size, will have helped, too.

And at €330 per person (for three doses), Gardasil knocks down the old theory that vaccines don't command premium prices. (Though it’s still cheap enough, relative to some cancer drugs, for authorities to reimburse, as they have agreed to do in all of the largest European markets, other than the UK.)

Now sure, vaccines have been hot for some years now: bioterrorism and bird flu were just some of the factors that led to a scramble of Big Pharma (and little biotech) into the field; some returning to what they’d earlier cast aside.

They will get hotter still. Scientists are figuring out how to vaccinate against a wider range of conditions--including ones that haven’t even arrived and may never will, like bird flu. As we reported a few weeks ago, Novartis just committed up to $500m for an anti-smoking vaccine from Cytos. SPMSD and others have more novel vaccines, like Zostavax for shingles and post-herpetic neuralgia, in the pipeline.

Meanwhile, FDA and other regulators are becoming increasingly sceptical of drugs that treat the symptoms of disease, and looking for products which get closer to addressing the cause, or progression, of certain illnesses. Preventing them altogether is even better. And cheaper.

Small wonder, then, that Hoch has, over the last couple of years, had a direct reporting line into Sanofi-Aventis’ outgoing big boss, Jean-Francois Dehecq. Vaccines matter (and perhaps even more now, after one-time-potential blockbuster rimonabant’s big stumble).

SPMSD sets one final example that drug firms might take note of: R&D cooperation. Sanofi Pasteur MSD was created in 1994 as a joint venture between Sanofi-Aventis and Merck. Any vaccine in either company’s pipeline passes to SPMSD after Phase II for further development, approval and marketing in Europe.

The JV was set up because vaccines require large up front investments and significant regulatory expertise, including understanding of, and links to, each European government's policy-makers and approval system.

Given the rising costs and falling productivity of R&D in regular drug firms, pooling costs and risks doesn’t seem a bad idea.

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Lilly's Shadow Government

Senior Republican staff in Washington are beginning to look for good, safe places to go until the political winds change. One top Health & Human Services official has found that haven in Indianapolis where a number of Republicans have gone previously for respites during a period of Democratic control.

Eli Lilly’s recruitment of the former Deputy HHS secretary Alex Azar continues a long tradition at the firm of offering shadow government posts to well-placed Republican figures.

Azar: Indiana jonesin'

Going back to George H. W. Bush, Lilly has served as a temporary home and launching pad for loyal Republicans. The former President served a three-year tenure on the Lilly board after leaving his final Ford Administration post as CIA director.

Azar, who played a major role in putting his stamp on HHS policy from two subcabinet level positions (first as general counsel and then as deputy secretary) will be senior VP-corporate affairs and communications.

The senior VP corporate affairs position is the very job held for nine years during the 1990’s by the current Indiana Governor and former OMB director, Mitch Daniels. Prior to joining Lilly, Daniels was the political director for the Reagan White House.

All big pharma companies obviously play an active game of political influence and are on the lookout for knowledgeable and experienced Washington insiders, but Lilly’s approach is unique in its focus on an ideological fit. The company appears to be less pragmatic and more idealistic in its choices. Azar, who reportedly marked his departure from HHS with a poignant note about praying for advice on his future choice of careers, fits the mold of idealistic conservative that Lilly likes to groom for higher positions. And, with a president and OMB director to its credit already, the company has not done too badly.

For a company that publicly espouses disdain for government-controlled functions, Lilly has done well with government business. Its antipsychotic Zyprexa always appears among the top products purchased by the government; it was also one of the first products to benefit dramatically from the shift from Medicaid to Medicare in 2006. Medicaid programs were getting more effective at forcing down the price and purchases of the product.

Lilly also has had great access to Washington from Hoosier politicians that it has backed aggressively. During the Reagan Administration, for example, Otis Bowen, a former Indianan governor, headed HHS for three years. During the presidency of George H. W., the firm basked in an Executive Branch headed by a former board member and a former Indiana senator, Vice President Dan Quayle.

Lilly likes to point out that Azar has broad knowledge of a number of key government constituencies: the “agencies under his direction included, among others, the Food and Drug Administration, the Centers for Medicare and Medicaid Services, the National Institutes of Health, and the Centers for Disease Control and Prevention.” Perhaps, more importantly, Azar planted a series of aggressive general counsels throughout HHS. At FDA, for example, Azar worked with Dan Troy, a former colleague from private practice at Wiley, Rein & Fielding.

Bringing a political pro into the corporate structure can raise some practical issues. Lilly tried to move Daniels into a line operating position in charge of the US pharmaceutical business but quickly found that he was more valuable in government relations and policy. He could run the government budget and the state of Indiana but did not satisfy Lilly’s demands for running a drug company.

The Azar appointment, announced on May 4 three months after his departure from HHS, comes soon after one Lilly connection to Washington went sour. Former Lilly Chairman Randall Tobias recently resigned from an assistant secretary at the State Department in charge of US foreign assistance and USAID following inquiries about his participation in the Washington escort service scandal.

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