QDIS Blog

Reuters recently had the following article about pricing pressures on the drug industry.

Pricing threat looms large for global drugmakers | Industry Summits | Reuters.com

One of the major ideas behind this article is that there are many so called “me too” drugs that don’t offer any advantages. Check out the following quote.

“Me-too” medicines, offering no big advantage over the existing products, will be the biggest casualties, according to Novartis AG head of corporate research Paul Herrling.

“Payers are less and less willing to pay, especially in big patient markets, for drugs that do not deliver a very, very distinct new clinical advantage,” he said.

I always hate to see this sort of attitude from major pharmaceutical leaders. I think this ignores the basic fact that each individual responds differently to various medications. I feel more effort should be spent on determining precisely which patients may respond to a given drug. With the advances being made in genetic testing it is possible to see who responds best to certain medications. However this sort of thinking runs counter to most big pharma thinking in that they want to concentrate on the largest possible patient population. I feel this attitude needs to change and the ability to determine precisely who will respond is essential.

I have had strong feelings about the “me too” drug for a long time. Imagine that your health care insurance will only cover one brand name medication for say allergies. There may be three approved drugs but only one is covered by your insurance. You try it and it doesn’t work for you. What then? Your doctor gives you a free sample of another drug that isn’t covered by your insurance and you find out it works great. Now you have a great drug that works for your allergies, but your insurance won’t cover it. This doesn’t make sense to me.

Given the recent advances in being able to determine genetic make-up of individuals I really think it worth while to determine why a given product works for a certain group of individuals and maybe even more importantly, why it doesn’t work in others.

This is what some call individualized medicine. I don’t know that I fully believe there will ever be a time when a drug is tailor made for one single individual. However, determining who, on a genetic basis, may best respond is a step in that direction and is how I see “personalized medicine” playing out.

Technorati Tags: drug cost, drug price

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While not a merger or acquisition this item is interesting from Forbes. Seems 3M is getting out of the pharmaceutical industry and selling those assets to three companies.

3M In Three-Way Deal - Forbes.com

They are selling their US, Canada and Latin America based operations to Graceway Pharmaceuticals for $875 million and then their European division is being purchased by Media AB of Stockholm, Sweden for $857 million. Finally, Private equity firms Ironbridge Capital and Archer Capital will acquire 3M’s operations in the Asia Pacific Region for $349 million.

Not bad, 3M picks up over $2 billion from the sales. It is interesting that I felt 3M never was focused on their pharmaceutical interests. It is probably a good thing for those working in the pharma groups as there should now be more of a focus on what they can provide for their new owners. It is always unsettling though for those involved though not knowing what may come. I can’t really comment on whether or not all or most of the employees will be retained since I know little about the companies purchasing 3M’s assets. Hopefully it works out well for them.

Technorati Tags: 3M, pharma M&A, pharmaceutical deals

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