Archive for November, 2011



A Strategic Lesson in a Tale of Two Drugstores

November 29th, 2011
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Have you noticed the very different strategic paths taken here of late by Walgreens and CVS, the national drugstore chains? What’s happened so far is a lesson in strategy and the importance of considering unintended consequences and long-term implications. For me, this drugstore case study evokes the old adage, “Be careful what you wish for.”
 
A recent article in Forbes magazine compares the stock performance of CVS and Walgreens, in an attempt to measure how each chain’s strategic decision around its pharmacy benefit managers (PBMs) program affected both how well each could negotiate terms and prices with insurers as well as its overall pharmacy sales. PBMs are designed to help a drugstore chain win a price advantage over competing chains.
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Could Orphan Drugs Turn Health Economics on its Ear?

November 21st, 2011
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When is $100,000 a year more expensive than $500,000 a year? The answer: when developing drugs to treat common diseases (e.g., cancer) rather than rare diseases. According to a new article in Forbes magazine, governments and insurers are willing to pay upwards of $200,000 and as much as $500,000 for new orphan drug treatments that attack rare diseases (usually caused by a single gene). Since people suffering from these diseases have a known genetic profile, these targeted treatments are far more effective than most cancer drugs, for which insurers will usually cover up to $100,000 per patient per year.
 
National Institutes of Health (NIH) Director Francis Collins is urging companies to find more treatments for rare diseases. Of the 7,000 diseases that affect humans worldwide, 6,000 are rare. Traditional drug discovery and development methods for mass populations won’t be effective against these diseases. But more targeted approaches, with specific biologics and companion diagnostics, could be.
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Through the Murky Slog: Part II—A New Light for Cancer Therapies?

November 9th, 2011
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Last week, we discussed new drug approvals that reflected a paradigm shift for cancer drug development and for treatment of people living with cancer. Finally, we are starting to see a matchup of specific diagnostics with targeted biotherapeutics to address (effectively, we hope) targeted treatments for smaller groups of cancer patients.
 
Just recently, the American Society for Clinical Oncology (ASCO) urged the use of new biological knowledge to develop treatments faster, design more targeted clinical trials, and use information technology to integrate once-separate translational and clinical research. ASCO even says that targeted therapies can improve clinical trial responses from 8 to 30 percent. Also, just recently, the FDA gave itself a pat on the back as it highlighted its recent innovative drug approvals, with targeted cancer therapies included among those on the list.
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Are We at the End of a Long, Murky Slog in Cancer Treatment?

November 4th, 2011
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For many years, a lot of people (including us) have called for a new way to look at, diagnose, and treat cancer. This means changing everything – from how we classify cancer to research strategies to treatment regimens. It’s been a long slog, through murky data and lots of failures, but now we’re finally seeing targeted treatments, matched with diagnoses to select the right niche of patients. Best of all, there is strong evidence to suggest that those treatments may work very well in those patient cohorts.
 
These are unlike most current cancer therapies, which are marked by “broad brush” descriptions (“a breast cancer drug”) and expensive price tags that can wipe out savings, burden insurance companies, and may have little benefit. But the FDA has just approved a series of treatments (albeit for rarer and later-stage cancers) that come with companion diagnostics to make sure the patient is the right one (i.e., has the right biomarker profile) for that drug. Identification of these patients prior to treatment means that while the treatments are still very costly, they stand a much better chance of actually working.
 
Just recently, the FDA approved (under its fast-track NDA approval system):
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