Healthy Skepticism Library item: 16821

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Publication type: news

Jack A
The fall of the world’s best-selling drug
The Finanical Times 2009 Nov 28
http://www.ft.com/cms/s/2/d0f7af5c-d7e6-11de-b578-00144feabdc0.html

Full text:

Every day, Jeffrey Kindler swallows a bittersweet, oval pill that helps dictate his fate. It offers hope of extending his life for many years, while reminding him that the direct boost it gives his wealth is coming swiftly to an end.

Jeffrey Kindler, CEO of Pfizer, the maker of Lipitor: “When such a thing goes off-patent, obviously it’s a very significant event … Our job is to prepare the company for that”
Like millions of middle-aged people, Kindler’s chances of enjoying a longer, healthier life have been transformed by atorvastatin, his cholesterol-reducing treatment, which has helped shift medical practice from offering acute treatment for small groups of patients with severe heart problems to long-term preventive care for the masses. It is the top-selling drug in history, and helped Kindler’s company, Pfizer, to become the world’s largest pharmaceutical company.
“It has treated more patients, helped more people to manage their cardiovascular conditions, saved and extended more lives than almost any other medicine,” Kindler says. “I have taken it for many years.” He is a well-built man with greying hair, a graduate of Harvard Law School who, before he joined Pfizer in 2002, had risen to be a senior executive at McDonald’s.

Atorvastatin – better known by its brand name, Lipitor – lowers “bad” LDL cholesterol in the blood and has helped revolutionise primary care by preventing heart attacks or limiting their impact. Lipitor was not the first, second or even fourth in a new class of drugs, called statins, introduced over the past two decades, but its particular efficacy, combined with intensive development, aggressive marketing and more than a little luck, soon propelled it into that elite group of products ever more desperately sought but rarely found by large drug companies: a “blockbuster”, generating sales in excess of $1bn a year.

In fact, since its launch in 1997, it has generated more than $80bn in sales for Pfizer, far outstripping all other blockbusters, including Viagra. By 2004, Pfizer could boast that Lipitor had become the world’s first “mega-blockbuster”, generating annual revenues of more than $10bn. Last year, they exceeded $12bn.

But the monopoly rights that made Lipitor so lucrative are now set to disappear. Once its patents expire in 2011, generic drug manufacturers will be able to sell it far more cheaply. That is good for patients, but bad for Pfizer as it struggles to maintain its pre-eminent industry ranking. It is also a sobering moment for the entire pharmaceutical industry: many believe that the circumstances that gave rise to Lipitor’s extraordinary success may never occur again.

The ticking of the Lipitor patent clock was already a concern for investors when I first met Kindler in early 2006, at Pfizer’s Manhattan headquarters just east of Grand Central Station. He was the quietest of three senior executives at a long table, each a contender to replace the man looming at its head: Hank McKinnell, the company’s lanky and abrasive silver-haired chief executive.

By the time we met again last December, Kindler had been in charge for a little over two years. McKinnell had been pushed precipitately into retirement, and Kindler’s rivals for the top job had left the company as it underwent a series of restructurings to prepare for a future without Lipitor. Yet the underlying problems remained, its share price was falling and the expiry of the patent was that much closer. We were sitting in the company’s Washington, DC, offices at a time when the financial crisis and healthcare reform pledged by Barack Obama meant intensifying pressure for cheaper drugs in the US, the world’s largest pharmaceutical market. Add to that the failure to come up with new blockbusters to replace Lipitor, and it could not have been a worse time for Pfizer to be preparing for the implosion of its best-selling drug. “When such a thing goes off patent, obviously it’s a very significant event,” said Kindler, sounding well-rehearsed. “But we’ve known for some time that it was going to happen on a certain date. Our job is to prepare the company for that.” In fact, as a series of last-minute shifts in dates and locations for our interview hinted, the chief executive was already finalising his own ambitious top-secret strategy to dig himself out of the Lipitor hole.

. . .

“Some people say it took a long time,” says Akira Endo, as he is honoured for his work of four decades earlier
Akira Endo, a wiry, ascetic man with a gaunt face, eased himself awkwardly into the huge cushions of a couch in New York’s Pierre hotel on Central Park. He looked uncomfortable surrounded by the brash yellow décor and gilded mirrors, but his reserve could not conceal a little satisfaction. He had just received the Lasker-DeBakey clinical medical research award for 2008, one of the most prestigious American prizes in the field. Four decades after Endo made the pioneering breakthrough that led to the discovery of statins, he was receiving the attention he deserved. In 2006, he had won an equivalent accolade in his own country, the Japan Prize. “Some people say it took a long time,” he observed diplomatically.
While studying at Tohoku University’s agriculture faculty in the late 1950s, Endo, inspired by Alexander Fleming’s work on penicillin, had looked to the natural world in search of fungi that might be turned into antibiotics to fight infectious diseases. In the late 1960s, on a placement at the Albert Einstein College of Medicine in the Bronx, Endo found a focus for his fungi work as he observed the poor lifestyle habits and growing health problems of American baby-boomers. “I was very surprised to see so many people with high levels of bad cholesterol suffering from heart attacks,” he said. “I believed there was a link between the two, and cholesterol was the major factor… [and] I speculated that there must be fungi that inhibit cholesterol production.”

American scientists had noticed the phenomenon, too. In 1948, troubled by the fast-growing “silent epidemic” of heart disease, researchers had begun ground-breaking, long-term studies to understand its causes and possible treatments. By the end of the 1950s, it was clear that high cholesterol was one of several risk factors for heart attacks, alongside smoking and high blood pressure. But establishing the precise relationship, and deciding how best to respond, would prove difficult. The rare drugs available to treat people with very high cholesterol levels were unpleasant and only modestly effective. “It was a bit like drinking several glasses of sand each day,” recalls Rory Collins, head of the clinical trial service unit at Oxford University and a leading authority in the field. As for giving drugs to a broad mass of people to reduce their cholesterol levels, he says: “I remember researchers in the 1980s still saying, ‘Why would you do this?’”

The best medical advice was to reduce food fat intake – an approach with limited effect. Endo took a different tack. The human body makes cholesterol using an enzyme called HMG-CoA reductase. He reasoned that natural organisms might produce substances to block it. Hired back to Tokyo at the start of the 1970s by Sankyo, the chemical and pharmaceutical conglomerate, he gave his four-strong team two years to identify promising compounds. They grew more than 6,000 fungi, fermenting them to extract broths which they tested for their ability to limit the synthesis of the enzyme.

By the mid-1970s, Endo began publishing on a promising substance extracted from the fungus Penicillium citrinum, which he dubbed meva-statin, and was branded by Sankyo as Compactin. Research continued, but in 1977 it received a fillip in the form of a desperate plea from the National Cardiovascular Center in Osaka. Doctors had a patient suffering from extremely high cholesterol whose condition was deteriorating fast. Surgery wouldn’t help. Sankyo provided an experimental batch of Compactin, in an unorthodox first human test of the drug. The patient improved, and the treatment was given to another 10 people – with similarly positive results, and without serious side effects.

The findings in Japan excited other researchers, including Roy Vagelos, then head of research at Merck, based at Whitehouse Station in New Jersey, the heartland of the US pharmaceutical industry. Vagelos had seen the potential of cholesterol-lowering drugs, and forged a partnership with Sankyo. Within a year, the Merck team had identified its own promising prototype drug, derived from fermentation of the fungus Aspergillus terreus. They named it lovastatin.

Yet Sankyo remained ambivalent, and in September 1980 it cancelled work on Compactin for good. By then, Endo had left for the Tokyo University of Agriculture and Technology, and he had trouble finding out why Sankyo had pulled back – although rumours were that dogs given the drug had developed tumours. Still, Sankyo would not explain itself, even to its partner, Merck. “The science was unclear and the company reluctant,” said Endo. “At that time, Japanese pharmaceutical companies were not used to collaborations.”

. . .

Merck and Sankyo weren’t the only companies working on statins, nor were they the only ones backing the research in fits and starts. Bruce Roth, who worked at another pharmaceutical company, Warner Lambert, recalls the frustrations of his own work. One of his early prototype statins was abandoned after it proved toxic in animal tests; another was dropped because it was too closely related to a product patented by a rival. But what sticks most in Roth’s mind is the fierce internal fight over one particular experimental compound he created, codenamed CI 981 and later called atorvastatin, as it moved from synthesis in 1985 into expensive clinical trials. The drug that became Lipitor was almost stillborn.

Roth had been hired as a young chemist in 1982. Warner Lambert, best known for over-the-counter products such as Listerine, was struggling to reinvigorate its pipeline of new medicines. Despite scepticism from the top, Roth thought his statin could help provide the solution, as did his immediate boss, Roger Newton. Newton recalls: “I would write scathing internal memos [to executives] saying, ‘You’ll regret this [not putting money into trials] for the rest of your life.’”

Roth’s drug had promise, but it had only been tested in animals. A lengthy, costly and uncertain development process lay ahead. And time was running out: even if it succeeded, it risked being a “me-too” product with little competitive advantage. Merck had relaunched its research programme after its Japanese partnership ended and brought lovastatin (with the brand name Mevacor) to market in 1987 – making it the industry’s first statin; Merck was also in the advanced stages of developing a synthetic version called Zocor. And rival products were progressing: within three years, Sankyo would re-enter the race by launching Pravachol, with its New York-based partner Bristol-Myers Squibb. In 1994, Novartis of Switzerland would win approval for the fourth drug in the class, Lescol.

On the other hand, Warner Lambert had a late-mover advantage over these other drugs. It had already seen the benefit of the statins, and could piggyback on its rivals’ growing success. Merck’s Mevacor had been developed as an “orphan drug”, targeting a small number of patients at very high risk of heart attacks. The company had to fund extensive and expensive clinical trials to prove efficacy incrementally for other conditions, as well as to disprove worries that statins caused cancer or had other serious side effects. A pivotal moment came with the publication of a Scandinavian study in 1994, which proved for the first time not only that a statin reduced “bad” LDL cholesterol but also that it led to a sharp drop in fatal heart attacks among patients with heart disease. Merck, which had funded the study, benefited, but so too did Warner Lambert.

When Warner Lambert’s management finally agreed to fund tests in humans – the first of which used company employees – the findings were striking. A 10mg dose of Lipitor could achieve the same effect in patients as the standard 80mg starting dose of Zocor, with fewer risks. No surprise that Roth’s drug would later be nicknamed the “turbostatin”.

. . .

Warner Lambert began work on a confidential plan to launch Lipitor as fast as possible. It put the drug forward for approval by the US Food & Drug Administration as a medicine for the rare but serious condition primary hypercholesterolemia. That would allow it to run a relatively small clinical trial on those patients in urgent need of help. Also, because existing treatments were so poor, the regulator would fast-track the review. But blockbusters aren’t made on science alone. Warner Lambert realised it would need to attract a large group of patients and doctors, far broader than those concerned with this rare disease. It needed marketing clout it could not muster alone – especially if it was to go head-to-head with the bigger Merck. In 1996, it signed a deal to co-develop Lipitor with Pfizer. Originally founded in Brooklyn as a producer of de-worming pills, Pfizer had grown into an important, mid-sized drug company. Its wide product range gave it a large sales force and considerable commercial savvy. In discussion with Warner Lambert, it devised another aspect of Lipitor’s success: aggressive pricing. The two partners resolved to undercut their rivals, selling it more cheaply than even less-potent statins.

When US regulators granted approval for Lipitor at the start of 1997, Warner Lambert and Pfizer opened a new front in the “arms race” of drug marketing. They trained more than 2,000 sales representatives, and in the first year after launch, notched up nearly one million visits or “details” to doctors to persuade them to try the drug on their patients. Many of these were brief meetings snatched over a couple of minutes in a doctor’s offices, but often the reps paid for long conversations over meals at expensive restaurants.

Just as important, in a country with so many people under- or uninsured and with no cover for medicines, the marketers also offered millions of free samples of Lipitor as a temptation to write prescriptions. They encouraged patients to put pressure on their doctors, using liberal US regulations that allowed direct-to-consumer advertising and by forging alliances with the American Heart Association to create a public health cholesterol-lowering campaign called “go for the goal”.

Lipitor’s launch was so successful that it took the two companies themselves by surprise. Supplies of the drug were rapidly exhausted, and they had to acquire a new factory to meet demand. Warner Lambert was particularly taken aback. Still unsure that it could survive as an independent, it agreed to a friendly takeover by American Home Products in 1999. But Pfizer had no intention of losing such a powerful product to a rival. It responded the following day with a move unprecedented in scale and style in the pharma industry: a hostile, and ultimately successful, bid of $90bn.

Meanwhile, the marketing of Lipitor came under scrutiny. Less than two years after its launch, the Food & Drug Administration fired off the first in a series of warning letters concerning the advertising campaigns on which Pfizer was spending hundreds of millions of dollars. More warnings and criticisms would follow over the next decade. In 2006, the Prescription Access Litigation Project gave Lipitor one of its tongue-in-cheek “Bitter Pills” awards for aggressive advertising. And last year, Pfizer pulled television endorsements by Dr Robert Jarvik, the inventor of an artificial heart, who was paid more than $1.3m by the company but came under scrutiny over his credentials – including that he had never practised medicine.

Similar criticisms landed Pfizer with lawsuits from labour unions, the US government’s Medicaid system for the poor, and disgruntled employees seeking whistleblower settlements, all claiming the company was selling Lipitor “off label” or beyond the limits of its regulatory approval. But by 2006, the drug had reached peak sales of nearly $13bn, plenty to cover a few fines. Investors were far more concerned about competitive pressures.

. . .

Jeff Kindler was already awake early on a Saturday morning in December 2006 when the telephone rang. He was following a family tradition of preparing pancakes in the shape of his daughter’s initials to celebrate her birthday. But the call from John LaMattina, Pfizer’s head of research, soured the mood. Interim data from a clinical trial on its experimental drug Torcetrapib, designed to raise “good” HDL cholesterol, showed that more patients were dying than those not given the medicine. “It was a tough decision but not actually a difficult one,” recalls Kindler. “As soon as I understood the data, it took me only about a second. It was clear we had to stop the trials.”

Torcetrapib was not just another experimental drug. It was central to Pfizer’s strategy for survival, designed both to generate sales in its own right and to be placed in a single combination pill with Lipitor as a way of extending the company’s patent protection over its largest money-earner beyond the original 2011 expiry date. With early trials of the new drug looking promising, the then-chief executive, Hank McKinnell, had put it and other prescription drugs at the centre of his plans for the company. Now, just three months after his appointment, Kindler saw that strategy crumbling fast.

Already that year, Merck’s Zocor had gone off-patent, and the generic version was sharply undercutting Lipitor’s price. While Pfizer’s drug might have been more potent, health providers were keen to switch wherever possible to much cheaper generics. And it seemed to work almost as well: in 2005, Germany’s Institute for Quality and Efficiency in Healthcare, an official advisory body, concluded that Lipitor was not superior to other statins, a death sentence for Lipitor sales in the country. Elsewhere, new statins at least as potent as Lipitor were taking market share, such as AstraZeneca’s Crestor. And several generic drug companies led by Ranbaxy of India were waging battles in courts around the world as they sought to overturn the drug’s patents and launch their own cut-price versions.

Pfizer had other troubles, too. In April 2007, it had to abandon Exubera, a pioneering inhaled form of insulin for diabetics. It was designed to replace painful daily injections but the bulky device failed to win acceptance by patients or health insurers. A hoped-for blockbuster instead ended up costing the company nearly $3bn in write-offs. With other drugs also approaching their patent expiry dates, the pipeline of new products to replace them was thin.

Kindler was under pressure to conduct radical surgery, cutting corporate fat accumulated with Lipitor’s riches. Jets and helicopters were pared back; a town house in Mayfair was sold; and thousands of employees lost their jobs. In a series of restructurings, entire research activities closed as the company refocused its R&D into six divisions working on “high potential” therapies. Heart disease, the division that had been responsible for Lipitor, was not one of them.

. . .

Lipitor itself remained a central concern for Kindler. In July 2008, Pfizer reached a final settlement with Ranbaxy, which ensured the patent would remain in place until November 2011. After that, the Indian company would have first rights to sell lower cost versions of the drug. Ironically, only weeks earlier, Ranbaxy had been acquired by Sankyo. Three decades after it abandoned the world’s first experimental statin, the Japanese company would at last become a significant player in the field.

Pfizer was mulling a far more ambitious acquisition. When I met Kindler last December, all he would say was that, unlike many of his peers, he did not rule out the potential for a mega-merger. In fact, on July 6 last year, Kindler had already made a first formal approach to Bernard Poussot, his opposite at Wyeth, formerly American Home Products. Seven months later, a $68bn agreed takeover was finally unveiled. It marked a final revenge from Manhattan on the New Jersey-based company that had tried a decade earlier to seize control of Warner Lambert and Lipitor.

The deal bought Pfizer time by adding some Wyeth products with longer remaining patent lives. As the takeover document spelled out, the transaction also helped reduce Pfizer’s reliance on primary care medicines, providing a way to tackle “the significant challenge of Lipitor’s loss of exclusivity”, and ensure that in future no single drug would account for more than 10 per cent of total revenues. In 2008, its mega-blockbuster statin still accounted for more than a quarter of the group’s entire sales.

Kindler says: “Three years ago, we were the paradigm of the model of a successful pharmaceutical company of the 1990s: heavily in the developed world, in primary care and in blockbusters. The Wyeth transaction is transformational. It accelerates in one deal a host of strategies that we had already identified.” Many in the industry are more sceptical, arguing that the take-over simply defers the pain of Lipitor’s loss while distracting from internal efforts to boost innovation.

But if no future Lipitor will dominate Pfizer, some believe no drug in any pharmaceutical company will ever match its sales. Marketing practices are now under far greater scrutiny, and Pharmaceutical Research and Manufacturers of America, the US trade association, at the start of this year followed its European counterparts by launching a tough ethical code that clamps down on lavish entertainment, travel and gifts to doctors. Sales reps have become less important, as control over prescribing has shifted from individual doctors to health insurers and government agencies that pay for drugs. They want ever more rigorous data proving cost effectiveness as well as safety and efficacy. At the same time, growing demands of regulators to prove safety have put extra burdens on drug companies seeking to develop primary care drugs.

“Let’s face it, big pharma is contracting and the age of the blockbuster model is not sustainable,” says Roger Newton, the early advocate of what became Liptor. “Product cycles take much longer, you need more rigorous development programmes and regulators are more safety-conscious.

“There is no heir apparent to the statins.”