Tips of the Week

August 29, 2007

New Approvals Slow to a Crawl

During the first half of 2007, the FDA approved only eight new drugs. Seven of these were chemical drugs approved as new medical entities, and one was a biopharmaceutical approved via a biologics license application. This is three less than the total approved during the first half of 2006.

As shown in the table below, GlaxoSmithKline (GSK) was the only company to see two products approved. Novartis and Wyeth each received one approval while Pfizer, sanofi-aventis, Roche, AstraZeneca and Merck were among the majors notable for the absence of any new drugs.

With the exception of Novartis’ new antihypertensive, Tekturna (aliskiren) and New River Pharmaceutical’s ADHD product Vyvanse (lisdexamfetamine), most of the new products are for conditions with fairly low prevalence. For example, pulmonary arterial hypertension, for which Gilead’s Letairis (ambrisentan) was approved June 15, affects 100,000 people in the U.S., Europe and Japan. And the single biologic approved was Alexion Pharmaceutical’s Soliris (eculizumib) for paroxysmal nocturnal hemoglobinuria a condition that affects between 8,000 and 10,000 in North America and Europe combined.

Product Company Indication
Altabax GSK Antibiotic
Letairis Gilead Pulmonary Arterial Hypertension
Neupro Schwartz BioSciences Parkinson’s
Soliris Alexion Paroxysmal Nocturnal Hemoglobinuria
Tekturna Novartis Hypertension
Torisel Wyeth Kidney Cancer
Tykerb GSK Breast Cancer
Vyvanse New River ADHD

New Price Control System in the UK?

Over the last decade, Europe has been a notoriously difficult market for innovative drug manufacturers. Stringent price controls, slow approvals (made slower by the need for separate marketing and reimbursement approvals), mandatory rebates and taxes on promotional activity have made most of the European Union (EU) a hard place to conduct business. With that in mind, it’s no surprise that managers get concerned when the UK, the last major European market that can be described as industry-friendly, starts making noises towards a major overhaul of its price control regime.

Since 1957, the UK has relied on a voluntary agreement, known as the Pharmaceutical Price Regulation Scheme (PPRS), to control public spending on branded drugs. Instead of price controls per se, the PPRS establishes an acceptable range of companywide profitability and then leaves manufacturers free to set prices in a way that best meets this target. Perhaps more than anywhere else in the world, the UK has managed to strike a reasonable balance between encouraging pharmaceutical development and controlling costs.

In February, however, the Office of Fair Trading issued a report recommending changes to the PPRS and the government followed up this month by announcing it would reopen negotiations with the industry prior to the Jan. 1, 2010, expiration of the current agreement. Although any changes to a program that has worked well for both sides is cause for concern, history and the government’s statements indicate that whatever emerges over the course of these negotiations will likely continue to offer innovative drugmakers a more favorable environment than found in the rest of the EU.