According to an article in today's Wall Street Journal, "Pfizer Inc., the maker of Lipitor, blames the German health ministry for a significant drop in sales..." (See German Curbs On Drug Costs Rile Big Brands.)
It seems that new German legislation that went into effect in January has given the German health ministry more power to decide how much the state will pay for drugs.
"The ministry decided last year it would no longer cover the higher prices of branded drugs that it deemed to have the same medical efficacy as available generics. So the commission drew up a list of drugs that it won't pay full price to cover, including many popular treatments for stomach acid and high blood pressure, as well as Lipitor, the world's best-selling drug."
"It's actually a pretty disastrous thing for us," says Philip Burchard, the head of AstraZeneca PLC's business in Germany. "In a way, it's like losing your patents because you are being forced to reduce your price....Basically, this methodology puts you in the same bucket with generics and says, 'You're not better than any generics.' "
"The German reimbursement system rewards imitation and penalizes innovation," says GlaxoSmithKline's Mr. Garnier.
The industry is fighting back.
According the WSJ, drug companies tried last year to head off the legislation, and are currently "campaigning privately with politicians and publicly to patients," putting executives on popular TV talk shows, sending out sales reps to docs, collecting signatures from docs, and retaliating by relocating research facilities in other countries.
Some of this activity must have been focused on "educating" the public and healthcare professionals on the benefits of the brand name drugs over the generics; trying to prove that they are truly innovative. However, the health ministry commission of experts still did not see any difference between some brand drugs like Lipitor and its generic equivalent (simvastatin).
So what make a drug innovative?
Innovation, according to the International Society of Drug Bulletins (ISDB), is "a strategic concept for drug companies whose innovations are important for their profitability and competitiveness. If we want robust points of reference, patients needs should come first, and innovation should be defined in terms of comparative advantage over existing treatments." (See "What is a truly innovative drug?")
Drugs could be considered innovative based upon
- safety, or
"Convenience is helping patients, physicians, nurses, and pharmacists to use drugs well. It includes easy-to-use medications and administration devices, as well as reliable packaging. Greater convenience, resulting in better adherence to a drug regimen, can in itself be an advance."
How many new drugs are actually "innovative?"
Many critics have a dim view of the drug industry's track record on innovation:
According to ISDB, for example, "about 80% of new products or new clinical uses approved each year in developed countries provide no advantage over existing treatments. About 2% of drug treatments offer a real advance to patients, and 5% provide minor benefits."
Marcia Angell ("The Truth About the Drug Companies: What To Do About It") claims that seventy-seven percent of the industry’s output consists of "leftovers" or me too drugs classified by the FDA as being no better than drugs already on the market to treat the same conditions. She cites a "crucial weakness" in the law that new drugs only have to be proved “effective” and not "more effective than (or even as effective as) what is already being used for the same condition." She favors head-to-head comparisons rather than showing that a drug is better than nothing at all (placebos). "The last thing drug companies want," says Angell, "is a head-to-head comparison."
The German commission, it seems, defines "innovative" a bit narrowly. According the WSJ, the commission "examines each drug's chemical properties and effects. An innovative drug is one that works 'so specifically that you can't use another drug,' says Ulrich Dietz, head of the drug-regulation department at the health ministry. If a branded drug is simply more convenient to take -- if it can be swallowed as a pill rather than injected, or taken once a day instead of three times -- that likely wouldn't be considered innovative enough, Mr. Dietz adds."
Innovative Marketing for Innovative Drugs
Efficacy is probably the most important criteria for judging innovation. However, safety and convenience should also be considered, especially if the problem of adherence is to be solved. Drugs don't work if you don't take them. Duh!
The industry needs to do more to prove the safety of branded drugs (see "Drug Safety: A Matter of Trust!" and "How the FDA Can Fix DTC") as well as convenience and show that their "innovative" drugs improve compliance and adherence. Then marketing can be innovative as well. That is, evidence-based marketing (see the previous post: "Evidence-based Marketing") should also promote safety and convenience as well as efficacy. That assumes, of course, that evidence is available to back up the claims.
Some other time, I might take on the subject of "evidence." For now, you can read the sources I quote above.