Friday Five - 5 questions raised last week in pharma

Can Eli Lilly succeed where others have failed?

Eli Lilly's planned assault on the diabetes market received a boost this week when its GLP-1 agonist dulaglutide (currently awaiting approval from the FDA) was shown to be non-inferior to Novo Nordisk's market-leading GLP-1 therapy Victoza (which has an approximate 65 percent share of the market).

Eli Lilly had earlier downplayed expectations that dulaglutide would demonstrate superiority over Victoza and results from the AWARD-6 study must be viewed as a victory-of-sorts given that other GLP-1 agonists have previously failed to demonstrate non-inferiority to Novo Nordisk's drug.

Having demonstrated comparable efficacy to Victoza, the commercial performance of dulaglutide will be driven notably by other key characteristics. Notably, Eli Lilly's drug is dosed once weekly rather than once daily; while a similar advantage in terms of administration has not seen AstraZeneca's Bydureon aggressively gain share at the expense of Victoza, the needle that Bydureon is administered by is notably larger.

A smaller gauge needle for dulaglutide – not to mention physician familiarity with and the greater convenience of Eli Lilly's auto-injector pen device – is therefore likely to play a key role in driving uptake, noted Bank of America Merrill Lynch analyst Gregg Gilbert, as will additional data from the AWARD-6 study which have yet to be published, such as absolute HbA1c, weight loss and nausea.

Analysts at Goldman Sachs noted that non-inferiority versus Victoza should benefit Eli Lilly in future negotiations with payers who are looking to pressure undifferentiated products. That said, they suggest that Eli Lilly may well look to compete aggressively on price regardless.

This would both mirror Eli Lilly's strategy in the DPP-4 inhibitor segment, where discounting has been used to bolster uptake of Tradjenta (see In Focus: Discounts, differentiation and determination – why Boehringer Ingelheim, Eli Lilly's Tradjenta is bucking the trend in the US diabetes market), and continue a trend in the GLP-1 agonist market, where Express Scripts excluded Victoza in favour of Bydureon on its latest preferred formulary; management comments from Novo Nordisk indicate they are not willing to compete aggressively in this way at present.

Approval is widely expected in Q3.

To assess these implications, next week's FirstWord Physician Views poll will survey US-based endocrinologists and how they expect the launch of dulaglutide to impact the GLP-1 agonist market. Check your FirstWord email on Tuesday for further details.

Biosimilars – where from here?

FirstWord was in attendance at Virtue Insight's 4th Biosimilars Congregation in London this week and discussions further illustrate that this embryonic segment of the pharmaceutical sector stands at a fascinating crossroads.

Key questions still dominate the landscape, among them: is the opportunity as big as it often appears?; will naming conventions significantly influence prescribing habits?; and can physicians be convinced of indication extrapolation?

As evidenced by the above, focus is notably shifting to the commercial outlook for biosimilars and away – to some extent – from development and regulatory issues, although these remain a key topic of conversation, both regarding the US (where there remains much caution towards the drawn out progress of regulatory updates) and the emerging markets (where qualifications of biosimilarity remain in question).

Irrespective of your standpoint on whether the biosimilars market will deliver much or disappoint those that have invested heavily, the sector remains an intriguing subject for debate.

See Spotlight On: Europe appears committed to naming convention for biosimilars, but can industry lobbying persuade the FDA to take a different route?

Is the FDA's new testing programme good or bad news for the generics sector?

A heavily read story on FirstWord this week was the FDA's announcement that it has initiated its first widespread testing programme for generic drugs, which began in September without public notice. The programme – which has purportedly been established due to growing concerns about the quality of generic therapies produced outside of the US – will nevertheless test drugs that have also been produced domestically.

Coupled with the FDA's recent proposal to change the labelling requirements for generic drugs – thereby opening up generic manufacturers to a notably higher risk of litigation – the new testing programme further illustrates that the generics landscape continues to undergo a subtle evolution.

From a commercial perspective, the sector is also in a state of flux, shaped by a notable reduction in the number of blockbuster drugs that are losing patent exclusivity and a growing realisation that much of the promised biosimilar opportunity will be gobbled up by branded players. Actavis' recent decision to commit $25 billion for the purchase of Forest Laboratories is a clear sign that the specialty pharma segment remains the most favoured exit strategy for generics players looking to diversify.

What kind of results the FDA's new testing programme delivers remain conjecture at this point. The reality, suggests consultant Neal Hansen – managing director of Hansen Consultancy – is that the generics sector has simply found itself caught up in the FDA's efforts to protect itself. At a briefing in Washington on Friday attended by congressional staff, White House representatives, the state department and the FDA, generic manufacturing was described as "the wild west" and the FDA accused of failing to adequately track substandard generics.

"It (the testing programme) will allow the FDA to push back against its critics and also come down harshly on anyone suggesting generics are not safe" says Hansen. In the long term he suggests the programme will probably prove to be beneficial for the generic sector and "could be seen as a move to prevent a change in policy to something less pro-generic."

Can the respiratory market deliver on its promised growth?

A glut of approvals – for both branded and generic products – in Europe this week illustrates that the respiratory market has entered a period of notable evolution; questions remain, however, as to whether this dynamism extends to R&D efforts in asthma and chronic obstructive pulmonary disease (COPD).

Although secondary factors – such as inhaler patents – have so far prevented the branded sector's biggest selling respiratory products from facing substitutable generic competition, this storm appears to now be moving over the horizon.

If this challenge is encapsulated by one company, then it will occur at the industry's leading respiratory player, GlaxoSmithKline, which is looking to replace its $8 billion-a-year Seretide/Advair franchise with a portfolio of new combinations – see ViewPoints: GlaxoSmithKline looks to convince investors of a bright future in the respiratory field.

With the FDA recently announcing that final guidance for the approval of generic Seretide/Advair products will be unveiled this year, all eyes will remain on the commercial uptake of new launches such as Breo Ellipta and Anoro Ellipta. As recently illustrated by our Physician Views poll looking at end-user opinion towards pharma innovation, it was pulmonologists who were least enthusiastic about what the industry is bringing to the market. Similarly, FirstWord's Therapy Trends report on the COPD market presents a view from key opinion leaders that a handful of much-touted new therapies are "more of the same," which offer greater convenience rather than true breakthrough.

Throw payers who are looking to reward only clearly differentiated products into the mix and the respiratory sector remains one to watch over the next few years; a handful of companies have invested heavily on the assumption that the asthma and COPD markets will grow substantially.

Where does the drug pricing debate begin...and end?

It may take some time to have a meaningful impact on industry performance, but there is now sufficient evidence to illustrate that the US drug pricing environment is evolving towards greater cost containment.

The decision by prominent oncologists to publicly criticise the pricing of Sanofi's colorectal cancer treatment Zaltrap increasingly looks like a landmark event (see ViewPoints: Sanofi blinks first in cancer price stand-off; what implications for industry/payer relationship in US?, followed as it has been by an intensification of effort among US payers to pressurise the pricing of undifferentiated drugs and suggestions this week that the US government is looking to usher in price negotiations for products covered under Medicare Part D through the back door.

The multiple sclerosis market remains a notable example of where US drug prices differ greatly to other geographies and the decision by the UK's National Institute for Health and Care Excellence to question the price of Biogen Idec's Tecfidera provided a very recent illustration this rate – see ViewPoints: NICE rejection of Biogen Idec's Tecfidera illustrates disconnect between US, European MS markets.

While the price of Tecfidera in the UK remains undecided at this point, Biogen Idec did confirm this week that in Germany the oral MS therapy will cost (after discounting) between $25,000 and $27,000 per patient per year (at least during its first 12 months on the market before cost-assessment protocols are implemented). As a result, Tecfidera will be priced at around 50 percent of its US market level, with this likely the high point for broader European pricing (as illustrated by NICE's rejection of Tecfidera until further discounts are forthcoming).

As one reader of FirstWord pointed out, however, should European payers be satisfied with these discounts given that Tecfidera is essentially "an old and cheap chemical" (dimethyl fumarate) – an argument that harks back to Biogen Idec's protracted efforts to gain suitable data protection for Tecfidera in Europe.

It's a valid point of view, or course, but where are the other versions of dimethyl fumarate approved for the treatment of MS - and at this point it is worth remembering just how well regarded Tecfidera is among MS key opinion leaders; as evidenced by its rapid uptake in the US market.

One view, postulates David Grainger – CEO of TCP Innovations – is that "the real innovation in Tecfidera is in the biology and clinical development, not in the chemistry. Do Biogen [Idec] deserve less credit, or less financial return, because they made this great new medicine available to MS sufferers using a compound that happened already to be used elsewhere? Absolutely not. They invested in the development programme, and they delivered something of value. Their return should be judged by the clinical effectiveness gain not by the chemical novelty."

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