People in glass houses…..
Today John C. Lechleiter, chairman and CEO of Eli Lilly & Co (NYSE:LLY), penned an op-ed piece for the Wall Street Journal entitled “An ObamaCare Drug Preview in Germany , Do you want penny pinchers nixing safe medicines before they’ve had a chance in the marketplace?”
Mr. Lechleiter writes; “Of particular concern is a new law passed last year that imposes a complex new assessment mechanism to determine the added benefit of new pharmaceutical products, which in turn is used to set prices. The situation in Germany bears close scrutiny in the U.S., as health-technology assessment processes grow in significance under the recent health-care overhaul.
Our concerns begin with the timing of Germany’s assessment: at the point of launch. Pharmaceutical companies invest hundreds of millions of dollars into clinical trials to prove the efficacy and safety of new medicines—but efficacy and safety are not the same things as added benefit. We introduce products into the market with well-founded hypotheses about their unique benefits, but rarely with definitive evidence. By insisting that we provide such evidence before a single patient has used a medicine in regular medical practice, German authorities are devaluing the final and arguably most important stage of pharmaceutical development.” (Highlighting added by Diabetic Investor)
Diabetic Investor agrees strongly with Mr. Lechleiter that it is just a matter of time before the US will move towards a system where drugs will not only be evaluated based on their safety and efficacy and that the cost of new medications will become part of the evaluation process. However, we found his statement “We introduce products into the market with well-founded hypotheses about their unique benefits, but rarely with definitive evidence” particularly interesting given that his own company has just introduced another me-too product into the diabetes marketplace.
As Diabetic Investor noted during the ADA conference you couldn’t avoid the many Tradjenta advertisements. Lilly and their partner Boehringer Ingelheim, plastered Tradjenta ads everywhere in the desperate hope that physicians would somehow bypass two well established DPP-4’s, one of which is a blockbuster, and prescribe their third to market, DPP4 which offers limited if any compelling differences between what’s already on the market. Although Lilly claims that Tradjenta really is different than Januvia and Onglyza, the two established DPP-4’s on the market and that Tradjenta offers a compelling difference for patients with renal impairment, the facts state otherwise.
The definitive evidence Mr. Lechleiter is looking for with Tradjenta will come when the company finds out that this me-too drug fails to gain traction in the marketplace. As Diabetic Investor has noted previously the renal impairment issue which Lilly mentions every time they talk about Tradjenta hasn’t exactly hurt sales of Januvia, which has surpassed the $4 billion mark. The simple fact is the only way Tradjenta even gains a toehold in the market will only come from the company selling the drug at a lower cost, this is what happens when you bring a drug to market that offers no distinct advantage over what’s already on the market.
The irony here is that Lilly actually has a diabetes drug in their pipeline that offers several compelling advantages over the competition, it’s called Bydureon. Unlike Tradjenta, Bydureon is not a me-too drug and has the potential to change the paradigm for treating Type 2 diabetes. Yet, rather than embrace Bydureon, the company decided to invest millions in Tradjenta. A move which caused their partner on Bydureon, Amylin (NASDAQ:AMLN) to sue the company.
As luck would have it late yesterday Amylin issued a press release which stated; “results from a thorough QT (tQT) study that assessed the potential of exenatide to increase the QT interval across a wide range of plasma concentrations. The study was conducted to satisfy a requirement by the U.S. Food and Drug Administration (FDA) in support of the New Drug Application (NDA) for BYDUREON™ (exenatide extended-release for injectable suspension), an investigational medication for type 2 diabetes. Using multiple heart rate correction methodologies, the study met the pre-specified primary endpoint, demonstrating that exenatide at and above therapeutic levels did not prolong the corrected QT (QTc) interval in healthy individuals. Further, the study found no relationship between QTc interval and plasma exenatide concentrations.” This is very good news for Amylin, Lilly and Alkermes (NASDAQ:ALKS) as it moves Bydureon one step closer to full approval by the FDA.
While we understand Mr. Lechleiter’s concerns on the future of the drug approval process, he just might want to get his own house in order first. As Diabetic Investor noted earlier this week when it comes to diabetes Lilly seems to be pursuing a strategy of embracing a series of me-too drugs rather than embrace truly innovative therapies like Bydureon. Given this strange strategy Diabetic Investor can understand why Mr. Lechleiter is so worried that these drugs would be evaluated not just on safety and efficacy but on “added benefit”. The fact is if such a system was in place today there is strong likelihood that Tradjenta would have never received approval as the drug really has no “added benefit” over medications which are already on the market.
This is in sharp contrast to Bydureon which is not just safe and effective but offers the compelling advantage of once-weekly dosing. It is a well-known fact in diabetes that therapy non-compliance is a major reason why nearly two-thirds of all patients are not properly controlling their diabetes. This is why the physicians who treat patients with diabetes are so anxious for Bydureon to get here. Being on the front lines they know from experience that patients aren’t taking their pills and/or injections as they should. As Diabetic Investor has noted on numerous occasions when it comes to diabetes treatments the fewer times a drug needs to be taken the better.
Diabetic Investor suspects Mr. Lechleiter would be less concerned over the future of the drug approval process if his company was developing innovative therapy such as Bydureon, rather copycat drugs like Tradjenta. One would also think he would have learned a valuable lesson as the Lilly diabetes franchise, once a global leader, is now just a minor player. This fall is in large part due to the company failing to develop innovative therapy options. The truth is that when it comes to diabetes Lilly has been a day late and a dollar short. They sat around and watched Novo Nordisk (NYSE:NVO) and Sanofi-Aventis (NYSE:SNY) introduce better therapy options and delivery devices. They falsely believed that the Lilly name alone would prevent physicians from embracing these new and better options. They failed to invest in innovative new products and are now playing catch up.
With Amylin and Bydureon they have a chance to once again become a dominate force in diabetes. Yet, rather than embrace this new and innovative technology the company makes a deal with BI which will yield little in sales or innovative options. Here too Lilly miscalculated believing that Amylin would sit ideally by and do nothing even when it was clear that Tradjenta was targeted at exactly the same patient as Bydureon. This is like a married man who is unfaithful and expects his spouse to ignore his indiscretions; as if it’s no big deal he violated his vows. In the real world most spouses would not ignore this indiscretion and do exactly what Amylin is doing, they file for divorce.
Diabetic Investor believes there is still time for these two parties to reconcile. Even though Lilly’s actions were inexcusable, not all marriages have to end in divorce. However, given the animosity between the two parties, reconciliation won’t be easy and won’t become any easier if Lilly continues to ignore the problems they have and continues to blame everyone but themselves for the problems they created.
The bottom line here is that while we understand one of the roles Mr. Lechleiter plays is a spokesmen for the pharmaceutical industry, his time would be better spent solving the problems with Amylin rather than writing op-ed pieces. As the old saying goes people in glass houses………