Nature Notes: IVB Podcast Emerges From Hibernation

Please imagine the hushed and dulcet intonation of Sir David Attenborough as we describe to you the reawakening of The IN VIVO Blog Podcast ...

Done imagining? Great. Now kick back and listen to Mike McCaughan and Ramsey Baghdadi do that thing they do where they promise to only rattle on for three minutes but then lose track of time and you've missed lunch. This week's topics? Where there's smoke, there's fire: FDA and Tobacco, Health care reform, and rumor-of-the-week.

While you're at it check out this piece from The RPM Report (The Threat of Reconciliation: Remembering the Part D Vote) and this here blog post on FDA/Tobacco. Not an RPM subscriber? Click here for a 30-day trial sub.

Oh and come back tomorrow for another podcast (when it rains, it pours) from Roger Longman and Ellen Licking.

For now, just click the button below to get started. And don't forget, you can access the podcast via iTunes also.

Listen for the Threat of the Medicare Rebate

Here we are shamelessly tooting our horn for calling the politics and action around pharmaceuticals and Part D correctly in 2007 and blowing a clarion call warning for 2008.

Tooting The RPM Report horn: In January a year ago, price negotiating and eviscerating the Medicare Advantage section of Part D were watched widely as two of the early objectives for the health leadership in the new Democratic Congress.

In the thick of the media obsession with those stories, The RPM Report pointed out how unlikely Congress would be to deliver on those goals in 2007 and why. (See here, and here and here, for clear foresight in retrospect).

Call to alert for 2008: This year, some in the media (for example, an interesting wrap-up piece in the Wall Street Journal January 23) are expecting a high-profile dangerous year for pharma.

Elections are always tough years for pharma in the news, but this one does not look to us like a year for major legislative initiatives against the drug industry.

Even the prospect of Democratic sweep in November may not be as threatening to Big Pharma as the Journal story suggests. The Democratic front-runners certainly do support action on pharma pricing that industry opposes--but their overall message is more nuanced and makes health care reform sound much less threatening to industry than it did 15 years ago. (You can read more here.)

There is one new threat, however, in a proposal that is generally beneath the radar for most observers: rebates to the government on Medicare Part D drug purchasers (see here).

We understand that rebates to Medicare sound pretty boring, wonky and not nearly as worthy of a headline as government price negotiation, but rebates could add up to big dollars from pharma. And the technical fix is just the type of tweaking to Part D that draws a real shiver from pharma execs.

The movement on Capitol Hill is just beginning for this way to recapture some of the alleged windfall that pharma reaped by moving Medicaid rebated drugs to Medicare. Listen for the distant horn.

The R&D Productivity Crisis: Is There a Bright Side?

Lots of interesting responses to our post on the historically bad year for new drug approvals this year.

One top R&D exec at a big pharma company focused on the last line: “Something needs to change.”

“It does and it is. If we can steer clear of major disruptions I am convinced that we can turn this round. A lot of change needs to happen, but directed at improving the process of choosing targets, getting them into man and to proof-of-concept quickly then streamlining a clumsy development engine.”

Another reader in a Big Pharma R&D organization writes somewhat less optimistically:

“I am sure everyone in the industry is thinking of ways to ‘innovate’ out of this situation and I believe the next year or two is going to be interesting for us all.”

And then there is this pragmatic response from the VC side:

“Depressing but very interesting. This shows why venture capitalists should leave it to the pharmas to try to get drugs approved!”

Speaking of depressing, we also received congratulations from a colleague at another publication for managing to work in a Philadelphia sports reference in a post about NME approval statistics. The depressing part is that it has been 25 years since a major Philly sports team won a championship. Yikes.

There is lot’s more to say about the state of R&D productivity. We have taken a deeper dive into the numbers on TheRPMReport.com, and coupled it with some of the observations of top industry executives at The RPM Report's FDA/CMS Summit.

There is one surprise: as bad as the past several years have been by all conventional measures of R&D output, there is a glimmer of hope. The optimistic view, that we are on the brink of an unprecedented flow of innovative new products—just might be right. (You do have to be a subscriber to The RPM Report to read our complete analysis, or sign up for a 30-day trial to get a taste of what you are missing.)

Please Note: our initial count of drug approvals in the IN VIVO Blog was off by one. It turns out there were 17 new molecular entity approvals, not 16—Fresenius Kabi’s hypovolemia agent Voluven (hydroxyethyl starch) was approved December 27.

Voluven was approved under the 505(b)(2) mechanism as equivalent to other blood volume enhancers, so it definitely does not add to our benchmark statistics (innovative commercial therapies, or ICTs). The extra NME also doesn’t change anything else in our analysis: 17 NMEs is still the lowest total since 1983, as is 19 novel molecules (NMEs plus novel biologics).

Voluven is nevertheless an interesting approval: it is the latest example of the emerging follow-on biologics pathway at FDA.

What’s that? You think there is no such pathway? Not so. Congress has yet to enact a legislative pathway for follow-on versions of biologics regulated under the Public Health Service Act. But for biologics that happen to be regulated under the FD&C Act (like human growth hormone, insulin, insulin-like growth factor, etc. etc.) follow-on approvals keep trickling out of the agency. Look for more on that topic as well, coming soon in The RPM Report.

The Cost of FDA's Credibility Gap

In previous posts, I have talked about the rising challenges facing the pharmaceutical and biotech industries stemming from FDA's credibility gap. In fact, I think FDA's credibility gap is one of the most pressing business problems for biopharma companies right now and for the foreseeable future.

I want to point you to a story I just wrote, hot off the Internet's virtual presses. The story, "Avandia and the Commercial Impact of FDA's Credibility Gap" can be found on our new website http://rpmreport.com/. Just register for the free trial, and you can read that, and many other stories we've written for our September issue.

Some of the takeaways from the story are:

1) FDA's credibility is one of the top commercial challenges facing biopharma decision makers.

2) Business leaders are re-thinking their drug development programs as a result of the current environment.

3) The FDA advisory committee on Avandia did more to hurt than help FDA's credibility crisis.

4) FDA is grappling with how to manage incoming information faster and more effectively.

Registration is easy, so go take a look. I'd love to hear thoughts from the investment community about this issue. Also, tell us what you think of the http://rpmreport.com website.