Pharma Leaders (And Pharm Execreaders) Reflect on the Ideas

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CONTRIBUTORS Susannah Schmitz Amiteye 138 THE SELVA GROUP Wendy Balter 138 PHASE FIVE COMMUNICATIONS Chris Begley 114 HOSPIRA Joseph Brindisi 130 KYOWA PHARMACEUTICAL Bob Caprara 100 IMPACTRX Jay Carter 140 ABELSON TAYLOR Abbie Celniker 132 MILLENNIUM PHARMACEUTICALS Jack Cinquegrana 112 CHOATE, HALL & STEWART B. Eliot Cole 120 AMERICAN SOCIETY OF PAIN EDUCATORS Dennis Crowley 146 BRAND ENGINEERS John Damonti 98 BRISTOL-MYERS SQUIBB FOUNDATION Michael Dey 122 Viewpoint: WYETH Roch Doliveux 96 UCB Michael Durand 124 OGILVY PUBLIC RELATIONS WORLDWIDE Paul Edick 104 MEDPOINTE Matthew Emmens 94 SHIRE PHARMACEUTICALS Sander Flaum 140 FLAUM PARTNERS Jackie Herr 124 IGNITE HEALTH Kevin Hrusovsky 134 For Client Review Only. All Rights Reserved. Advanstar CommunicationsCALIPER LIFE Inc. SCIENCES 2005 InYour Earl Hulihan 128 MEDIDATA SOLUTIONS Robert Ingram 90 GLAXOSMITHKLINE Morris Laster 136 BIOLINE RX Diana Lloyd 112 CHOATE, HALL & STEWART Mike Luby 118 TARGETRX David Maola 142 DIA Lou Morris 144 Words LOUIS A. MORRIS & ASSOCIATES Pat Pesanello 140 BUSINESSEDGE SOLUTIONS Peter Pitts 112 MANNING SELVAGE & LEE Pharma leaders Charlene Prounis 144 FLASHPOINT MEDICA Jörg Reinhardt 110 (and Pharm Exec readers) NOVARTIS Brent Saunders 116 SCHERING-PLOUGH Alex Scott 102 reflect on the ideas EISAI Marsha Scott 138 PHASE FIVE COMMUNICATIONS and events that Steven Sembler 92 ROCHE Mark Senak 106 revolutionized the industry FLEISHMAN-HILLARD Catherine Angell Sohn 142 GLAXOSMITHKLINE Tom Teal 142 over the last quarter DIA Lenny Vicciardo 120 VENTIV PHARMA ANALYTICS Josh Weinstein 100 of a century—and JWEINSTEIN SM Roba Whiteley 147 TOGETHER RX ACCESS what to watch for Robin Winter-Sperry 92 SCIENTIFIC ADVANTAGE Joel Winterton 147 in the next 25. SET ENTERPRISES David Wood 96 For Client Review Only. All Rights Reserved. Advanstar CommunicationsINTERBRAND Inc. WOOD 2005 HEALTHCARE Susan Youdovin 126 » B&Y COMMUNICATIONS Stephen Zocchi 147 MODEL N PHARMACEUTICAL EXECUTIVE 90 Viewpoint

A New Indication for Pharma Companies by Robert A. Ingram, vice chairman, pharmaceuticals, GlaxoSmithKline

ertain moments are indelible. I remember the group’s efforts is the CEO Cancer Gold Standard, an ini- moment, many years ago, when I learned of an tiative through which employers promote risk reduc- 11-year-oldFor Client girl inReview Ohio diagnosed Only. All with Rights Reserved.tion—eliminating Advanstar tobacco Communications use, improving nutrition, Inc. 2005 osteogenic sarcoma in her neck vertebrae. The increasing physical activity—and offer early detection nausea and vomiting from chemotherapy left and quality care for employees and their families. the little girl bedridden for days. Eating brought suffering, and dread of the next treat- Intervention Cment cycle brought tears. Not all disease is preventable, however, so viable Then the girl enrolled in a clinical trial of an investi- strategies must address how to rein in healthcare spend- gational anti-emetic from GSK. Relieved of her nausea ing when people get sick. The principles of effective and vomiting, chemotherapy no longer dominated her intervention are no mystery. But, they need more stri- life. Her energy, appetite, and spirits rebounded. dent support, like the Diabetes Ten City Challenge, a Never was our industry’s capacity to provide help program sponsored by the APhA Foundation with sup- and hope more striking to me. But our past accomplish- port from GSK, which establishes a voluntary health ments do not secure our future. All of the attributes benefit for employees and demonstrates that chronic dis- behind our success must now be directed to another ease can be managed more effectively and economically. challenge looming large: quality healthcare that is eco- If our industry sits on the sidelines, the benefits of our nomically sustainable. medicines will continue to be undermined. The current view of healthcare’s rising costs often Barriers to accessing healthcare operate at cross pur- overlooks that spending can be reduced by lowering the poses with effective intervention. Current measures to cost of chronic diseases, like diabetes, asthma, and car- drive down healthcare expenses, such as high diovascular disease. Roughly 75 percent of healthcare deductibles and increased co-pays, cause patients to spending goes toward treating people with chronic dis- delay seeking care or to take their medicines improperly. ease, according to the CDC. If we set our sights on Such near-term savings are illusory. chronic disease and employ sound prevention, intervention, and innovation measures, we can transform health- Innovation care into a state of quality, stability, and sustainability. Nor can healthcare’s medical, administrative, and economic challenges be solved by sacrificing R&D Prevention investment—the kind necessary for substantial innova- Disease prevention is easy to say and difficult to do. tion. Yet, we will do without these new tools and tech- Prevention is not a high enough priority. Data and com- nologies if the resources necessary for developing new mon sense tell us that it is cheaper to keep people well drugs are viewed as an expense that must be slashed. All than to treat them when they are sick. Yet, we’ve let a stakeholders, from policy maker to payer to patient, healthcare system evolve that is centered on treating the must appreciate that innovation simply will not happen sick, not keeping people well. The good news is that pre- if healthcare companies’ R&D funding disappears. venting diseaseFor is Clientgaining moreReview attention, Only. and All attention Rights Reserved.Some peopleAdvanstar know this Communications already. That 11-year-old Inc. 2005 is translating into action. cancer patient from Ohio has since graduated, landed a In 2001, I was honored by former President Bush’s job, and married. The life she enjoys is due in no small request to chair a group of chief executives to explore part to the chemotherapy that beat back cancer and a creative ways to combat cancer. The result of this medicine that made the chemotherapy tolerable. We’ve let a healthcare system evolve that is centered on treating the sick, not keeping people well. The good news is that preventing disease is gaining more attention.

Photograph by Adam Auel Viewpoint

edical science liaisons (MSLs) have undergone significant role changes since making their first Mappearance at Upjohn in the 1970s. At that time, MSLs were drawn from the ranks of specialized sales reps who provided practice-management counsel to large group practices and educational programs.Today,MSLs are strictly seg- regated from their sales colleagues and network with medical thought leaders. What caused the shift? Most notably,the 2002 guidance from A Changing the Office of the Inspector General, which ended the industry’s most egregious sales and marketing tac- World for Cancer tics. But changes in managed care and the appearance of new, increasingly complex products also One of the most satisfying aspects in seeing the landscape played a role. evolve during my 21 years in oncology derives from the Another less discussed development was the shift in research fund- simple fact that many cancer patients are living longer ing from academic centers and gov- and better lives today than ever before. This evolution is ernment to pharma, biotech, and medical device companies. In these a result of literally tens of thousands of people who have trials, MSLs play an unprecedented devoted their careers to advancing better therapies for role in identifying and cancer patients.For Client It’sReview truly Only. a remarkable All Rights Reserved. era for Advanstar oncology CommunicationsRobin Inc. L.Winter- 2005 building clini- Sperry,MD,is cal support for progress, and a profoundly rewarding experience. CEO of Scientific Advantage their com- Steven Sembler,Vice President of Oncology,Roche pany’s new medications. Photograph by Bill Bernstein Viewpoint

The Rise of the Me-Too World Q&A with Matthew Emmens, CEO, Shire Pharmaceuticals What were the 1980s like in the pharma industry? God, it’s been a long time. I’ve been in this business for 33 years. Back in 1981, I was a district manager at Merck. It was a time when we startedFor Clientto see real Review advances Only. in the All Rights Reserved. Advanstar Communications Inc. 2005 science. But it was also the start of real competition. Prior to the ’80s, you pretty much had one drug per class, or maybe two for hypertension and arthritis. And now how many ACE inhibitors do we have? In this way, we’ve seen the rise of the me-too world. One could argue that it’s commoditization. I could never imagine this business becoming like the chemical business, but in some ways it is, with the products becoming more alike. Competition [was] so different back then [compared with] now, particularly in terms of the number of generics available today that are acceptable medications. You couldn’t practice modern medicine 25 years ago using generics—they were too out of date. What was it like to help build Astra Merck, an innovative venture at the time? Astra Merck was a blank sheet of paper. Roy Vagelos [then CEO of Merck] gave us license to rethink our approach to the business: how we could use teams and do away with hierachy, how we could distribute authority throughout the organization. What will the next 25 years bring? As I look five, 10, and 15 years ahead, I see, number one, that we can’t afford the medical bill. That there will be more pressure on pricing. And there will be a lack of willingness to pay for minor differences between drugs.For You’reClient seeing Review that now,Only. but All Rights Reserved. Advanstar Communications Inc. 2005 that will just increase even more.

Photograph by John Halpern PHARMACEUTICAL EXECUTIVE 96 Viewpoint AUGUST 2006 www.pharmexec.com

M&A or many pharma companies today, particularly mid-sized companies, like UCB of Brussels, Belgium, the one I lead, it’s “eat or be eaten.” We choose to eat. Eat or The initials “UCB” originally stood for Union Chimique Belge. Just a few years ago, our sales were 50 percent Fpharmaceuticals, 50 percent chemicals. But you Be Eaten couldn’t see it on the bottom line. About 85 by Roch Doliveux percent of our profits came from pharmaceuticals, and only 15 percent from chemicals. And as we assessed our place in those two core industries, we realized we could only survive if we concentrated on and grew within one. We chose to focus on medicines, an industry that promises steady growth as the Baby Boom population ages. But the question remained: How do we achieve our vision of becoming a pure pharmaceuticals company? For Client Review Only. All Rights Reserved. Advanstar CommunicationsThe answer was “transformational Inc. 2005 M&A.” Instead of transferring or leveraging capabilities in a traditional merger, when the benefits come from using the same capacities in a more effective way, a transformational merger or acquisition creates new capabilities, truly effecting change. We began by divesting the company of its surface specialties and films business. The divestiture gave us the financial resources to acquire, in May 2004, one of Europe’s leading biotechnology companies, Celltech of the United Kingdom, in a 2.25 billion euro deal. It’s important to note that it was a friendly takeover; Celltech’s scientists and investors benefited from the acquisition, in many ways, just as much as we did. Our choice of partner on the road to transformation was crucial to this success. Unlike with a traditional acquisition, the union has to make sense from both sides to be successful; Roch Doliveux each company must find in the other a way to is chairman accomplish strategic goals. When this occurs, and CEO they find not a short-term growth solution but of UCB a long-term value.

A few key events set the stage for the past 25 years. In 1980, the Supreme Court ruled that genetically manipulated organisms could be patented; Congress passed the Bayh-Dole Act, which allowed recipients of federal research funding to secure patents. Twenty-five years later, in 2005, nearly 1,500 biotech “companies were active in the United States. The changes continue. Unlike main- stream pharma, focused on chemicals, biotechnology looks to the molecular structure of diseases.For Client Even Review more significant, Only. All Rights pharma Reserved. has broken Advanstar down the Communications‘Berlin Wall’ of Inc. 2005 silence between the industry and the consumer. From prevention to DTC to pricing, the voice of the consumer has been heard.” DAVID R.WOOD, CHAIRMAN & CEO, INTERBRAND WOOD HEALTHCARE PHARMACEUTICAL EXECUTIVE 98 Viewpoint AUGUST 2006 www.pharmexec.com

transfer these skills to public- and pri- From Grant Maker vate-sector efforts. One such approach is accelerating technology transfer. Recently, we to Social Partner granted a royalty-free license for our HIV protease inhibitor to two generic by John Damonti, companies—one in India and one in South Africa—which allows them to president of Bristol-Myers manufacture large supplies of the drug and make it available at low cost to Squibb Foundation countries in southern Africa and India, where HIV/AIDS has reached epidemic levels. But that was only the start. We also sent our engineers and scientists to he global community is making a tions and cash contributions. work alongside these companies at their new commitment to improve the As more players with special skills plants and ours, to ensure that the two health of people around the emerge from the public and private sec- generic makers could manufacture this world. Public and private sectors tors to focus on access to quality health- complex product efficiently, and at the are working together to build care, the pharmaceutical industry needs highest quality. sustainableFor Client healthcare Review capacity Only. Allto Rights rethink itsReserved. contribution. Advanstar In our indus- CommunicationsA second approach Inc. 2005 focuses on con- in developing countries. try, philanthropy and social responsibil- tributing research and policy skills. For TThe pharmaceutical industry is ity must leverage the competencies that the past seven years, our company has doing its part by developing and deliver- define our success as an industry: from operated “Secure the Future,” a commu- ing life-saving medicines to more people outcomes research and management nity-based initiative operating in 10 coun- who need them. Yet our philanthropy skills to project management and tries in sub-Saharan Africa that helps and social responsibility initiatives have informative metrics. Equally important, women and children affected by the delivered far more than product dona- pharma must develop creative ways to HIV/AIDS pandemic. CONTINUED ON PAGE 100

For Client Review Only. All Rights Reserved. Advanstar Communications Inc. 2005 PHARMACEUTICAL EXECUTIVE 100 Viewpoint ADVOCACY AUGUST 2006 www.pharmexec.com Patients DAMONTI CONTINUED We hope to show that comprehensive HIV/AIDS care and treatment can Find a work in the most resource-limited settings. This program responded Powerful directly to new government commitments and international Josh Weinstein is funding to provide AIDS drugs Voice president of to affected countries. Yet even as jwEinstein treatment became more widely By Josh Weinstein available, ministries of health told us they needed help developing and validating models of uring the past 25 years, we’ve Worse, under the old FDA regulatory care. So we designed outcomes witnessed patient advocacy policy, those terminally ill patients who research and assigned skilled sci- develop into a powerful politi- were admitted into trials still ran a 50- entists to guide these processes. cal and social force. The advo- percent risk of being placed on a It allowed us to grow our philan- cacy movement has expanded placebo. Because no advocacy groups thropic role from grant maker to the definition of “drug ther- existed to convince FDA to use “histori- collaboratingFor partner. Client Review Only. All Rightsapy” Reserved. beyond simpleAdvanstar symptom Communicationscal controls”—and Inc. since 2005 such control These are just a few among Dcontrol to an examination of the com- groups were not recognized yet as scien- many new areas of focus. As busi- prehensive situation a patient faces in tifically appropriate alternatives—thou- nesses, we make sure every day accessing drug therapy. sands of terminally ill cancer and AIDS that our products are delivered by Today, we’ve become accustomed to patients were permitted to die without a ensuring we have a supply chain seeing the move toward increasing shot at cutting-edge rescue treatment. that works. In business, that also access, but several years ago the situa- But when the AIDS epidemic hit the means we need to correctly fore- tion was quite different. The “patient- United States, activists stormed legisla- cast needs in the market, so that centric” mission of our industry had tures, policy committee hearings, and medicines don’t sit on a dock or in become hopelessly derailed by rigid company boardrooms to give AIDS a warehouse instead of getting to research, regulatory, and pricing poli- patients a say in policies affecting their the proper providers and hospi- cies. These policies discouraged the use treatment. Today, thousands of patients tals. Now that HIV treatments are of unapproved new drugs to rescue with other life-threatening diseases can becoming more available in patients at risk of death. Clinical-study thank them for better access to drugs. poorer countries, part of our con- inclusion criteria were highly restrictive, The research and marketing legacies tribution can become how to and patients had to do without drugs of this new activism are many: from his- effectively manage the supply priced out of their reach. torical controls in clinical trails and chain, forecast emerging needs, Rigidity at FDA compounded the higher enrollment of the most seriously and transfer drugs to people who problem. Under the banner of patient ill to advocacy-initiated requests for need them. safety, regulators routinely turned a fast-track regulatory review. They all Realizing the opportunities to deaf ear to the cries of terminally ill resulted from this new, more direct dia- share skills and technology, how- patients who were out of options. logue with the patients we serve. ever, is a two-way street. Pharmaceutical companies and other global business partners need to clearly communicate the expertise they are willing to offer. The days of simply placing the entire By the same token, NGOs, acade- burden of improving the bottom line on sales mia, and governments need to reps are most likely gone forever. A more expand their notion of what phar- holistic view of the forces surrounding the start maceutical companies can con- and“ continuation of a patient’s drug therapy is tribute beyond cash and product. needed to thrive in today’s environment. Today The future of philanthropy PBMs, pharmacies, health insurers, and even and social responsibilityFor Client Reviewis not Only. All Rightsthe government Reserved. all Advanstar exert substantial Communications pressure Inc. 2005 about giving as much as it can, and can either change directly or influence but about collaborating on indirectly the choice of drug used for therapy. important projects and sharing BOB CAPRARA, SVP,MARKET RESEARCH based on what we do best. AND ADVANCED ANALYTICS, IMPACTRX PHARMACEUTICAL EXECUTIVE 102 Viewpoint AUGUST 2006 www.pharmexec.com

LICENSING A New Deal by Alex Scott

wenty-five years ago, business development departments barely existed inside large pharma companies. It was often the R&D executivesFor Client who drove Review licensing Only. All Rights Reserved. Advanstar Communications Inc. 2005 deals, scouring the scientific literature for potential compounds, attendingT scientific meetings to network with other execs, and establishing affiliate offices in foreign countries to make personal contacts. Licensing was a relatively straightforward process, and included negotiating local supply contracts, royalty rates, and development schedules. Of course, all this simplicity had a Alex Scott is cost. Domestic requirements drove deals, vice president of business which were often structured without an development for exit strategy. The partner with access to Eisai

the US market held the upper hand. Take Photograph by Jim Shive the early example of Merck and Sweden’s Understanding Astra AB, which in 1982 partnered to how a deal could groups into corporate strategic-level busi- market drugs resulting from Astra’s benefit a company’s ness development groups, and created research. This collaboration eventually corporate vision new tactics for partnerships. Eisai, for became Astra Merck, a free-standing led to the creation of example, pioneered “strategic co-promo- joint venture. But when Astra finally was flexible arrangements, tions”—product-focused collaborations able to market drugs independently, the which in turn added without the restrictions of formal joint lack of complexity and flexibility in the shareholder value. ventures. And in 1994, the company deal structure meant it had to pay Merck arranged a US co-promotion deal with billions of dollars in fees and royalties. Pfizer for Aricept (donepezil). This deal A decade later, the push for globaliza- was more flexible than others the indus- tion led to an increasingly competitive try had seen, allowing Eisai to later marketplace and companies began mov- company’s long-term goals. Under- assume manufacturing and distribution ing away from strictly geographical part- standing how a deal could benefit a com- responsibilities of Aricept. This flexibility, nerships. Instead, they began approach- pany’s corporate vision led to the creation coupled with Pfizer’s desire to expand its ing deals with an eye toward more shared of flexible arrangements, which in turn neurology franchise, paved a new path decision making and a better understand- added value for shareholders. for partnerships, where it was possible to ing of how partnerships could drive a This thinking turned R&D’s licensing create mutually beneficial deals. For Client Review Only. All Rights Reserved. Advanstar Communications Inc. 2005

Eisai climbed its way up through the pharma rankings using the strategy of co-promotions. It was ranked in 1998 as number 44. By 2005, it had reached number 19. Viewpoint Paul Edick, CEO of MedPointe, says specialty pharma companies are looking for new drugs in their own labs—an R&D paradigm that takes them... Back to the Future

Photograph by Bill Bernstein PHARMACEUTICAL EXECUTIVE 105

s Pharmceutical Executive celebrates is nies were unable to pay an appropriate level of 25th anniversary, the specialty pharmaceu- attention. These were the expendable, underpro- tical sector can reflect on 15 years of his- moted assets that sucked up Big Pharma’s manage- tory. The story starts in 1991, when the ment time and dragged on top-line growth. Within landscape was dominated by the likes of specialty pharma, the race was on to see who could Merck, Glaxo, Bristol-Myers Squibb, acquire these assets the fastest. Ciba Geigy, SmithKline Beecham, And therein lay the problem: The Aand Sandoz. It was a golden age. New growth and profitability expectations chemical entities for the treatment of For many of the that were created as more specialty unmet medical needs were plenti- young, rapidly growing companies entered the race ful, and FDA approvals nearly so. firms, the early ’90s was became unachievable. It seemed The low hanging R&D fruit was a time of a new but as though venture capitalists largely unpicked. The reimburse- fundamentally flawed were creating a new specialty ment environment was easy. The strategy that played itself pharma firm a month. The prices impact of the independent gener- out over the next decade: for Big Pharma’s divested assets ics firms was still slight, and the achieving high-octane grew higher, challenging the havoc they wreaked on branded growth via acquirer’s ability to a decent ROI. franchises was but a glimmer of what acquisitions. The days of cozy, backroom product it has become today. Profit margins, acquisitions were replaced by profes- whichFor Client routinely Review exceeded Only. 25 percent All Rights of net Reserved. Advanstarsionally Communications managed, investment Inc. banker-led 2005 sales, were fat. The top ten pharma companies con- auctions, openly seeking the highest bidder. trolled 32 percent of global sales. Jobs were being The pace of divesting assets, which by 1993 had created; globalization was in full swing; investors been a torrent, had dwindled to a trickle by the reaped handsome returns from soaring share prices. early to mid-2000s. The corporate consolidations had largely run their course. Big Pharma was get- Pioneers ting fewer new products through the FDA approval At the same time, specialty companies were process, changing the perception of slow-growth emerging from infancy. The movement was led by assets. These formerly non-core products were now Alza, the drug delivery pioneer, and Medeva and cash cows that covered pressure on operating cash Elan, two brash Anglo roll-ups founded and led by flows—at least so long as the threat of generic former Big Pharma executives. These firms joined a encroachment could be minimized. smattering of precocious upstarts, such as Medicis (which was founded through a merger in 1988) Further Competition and King Pharmaceuticals, to anchor a new age. Beyond acquiring new assets, the competitive They joined or were followed by KOS, Endo, environment for specialty pharma has undergone Forest Laboratories, and many others of odd enormous change: Paragraph IV certifications, re- shapes and sizes that didn’t fit neatly among the importation, managed care practices, wholesaler pantheon of industry giants. inventory management programs, shorter product For many of these young, rapidly-growing firms, lifecycles, and armies of sales reps competing for the early 1990s was a time of a new but fundamen- physician attention are but a few of the new obsta- tally flawed strategy that played itself out over the cles that have emerged over the past 10 years. next decade: achieving high-octane growth via Collectively, they have mandated strategic change acquisitions. Many companies demonstrated in the specialty pharma business model. prowess at acquiring marketed, branded pharma- At MedPointe, a specialty company descended ceuticals products and using these drugs to build from the leveraged buyout of Carter-Wallace, we’ve field sales capacity and infrastructure, reach special- changed our model to reflect these dynamics. Today, ists and primary care physicians, and generate phe- we acquire and license marketed products, but also nomenal sales growth and returns for investors. The conduct R&D, expenditures which have grown problem, however, was that this business model was from four percent of net sales in 2003, and will finite—without a concurrent investment in the exceed 12 percent of net sales in 2006. R&D pipeline, it was unsustainable. While the early days in specialty pharma yielded a bonanza for companies that grew quickly through ForWanted: Client BigReview Pharma’s Only. Cast-Offs All Rights Reserved.inorganic Advanstar means, Communications the pendulum has swung Inc. in2005 the As Big Pharma entered a period of sustained cor- other direction. In many respects, it’s back to the porate consolidation throughout the ‘90s, specialty future. A blend of acquisitions—both product and pharma began clamoring to acquire the “non-core, technology—and internal , organic growth through non-strategic” products to which the larger compa- new product innovation is the way forward. PHARMACEUTICAL EXECUTIVE 106 Viewpoint AUGUST 2006 www.pharmexec.com

HIV/AIDS knew he was gay, but when he died, there was a sweeping rumor that he had died of the “gay disease” AIDS. One evening, a lawyer friend of mine invited Generation me to a meeting of other lawyers who were getting together to do volunteer work for people who were being diagnosed with AIDS. I went, not sure what Epidemic to expect. But it was more than anyone would by Mark Senak expect. The virus brought more than disease of the body, but disease of the spirit. People died within six months I like to believe that of their diagnosis, which was not a all of this happened for diagnosis of HIV infection, but a reason. The system rather an AIDS-defining ill- of regulation and care ness—the body was already cor- was changed for the better. rupted, the immune system so I need to believe decimated by the virus that it For Client Review Only. All Rights Reserved.all of Advanstar those lives Communicationswere became Inc.vulnerable 2005 to rare and spent to make horrible diseases. First, it was a better world. pneumocystis pneumonia and Kaposi’s Sarcoma, a deadly cancer. Then cytomegalovirus (CMV), usually carried by pigeons and cats, and progres- sive multifocal leukoencephalopathy (PML), a sort of fast-acting Lou Gehrig’s disease. Before long, doctors were treating infections every day that only a hand- ful of specialists had seen. In those days, you had to “suit up” when you went into the hospital room of a person with AIDS; you had to wear a mask, a gown, a visor, and gloves. The irony was, upon their discharge from the hospital, patients would take a sub- way or taxi or go grocery shopping with ach generation has a “birth describe as “sweet.” And in Los no barriers whatsoever. mark”—a defining event that Angeles, an aspiring actor, age 26, I met Amy Sloan on the Oprah identifies them. For my parents, named Joseph Foulon decided he would Winfrey Show. As an attorney doing it was the December 7, 1941 move to New York to try to get onto the deathbed wills and bringing some of the attack on Pearl Harbor. For my Broadway stage. He had landed a few early discrimination suits, I was to older sister, it was the Vietnam very small non-speaking parts in some appear with a young man named Ryan War. For my generation, the big films. He loved stock theater. He White, who had been kicked out of his Edefining moment came in June 1981, as was very handsome and had a magnetic school for having the virus. But because I was graduating from Brooklyn Law presence. he was ill, another person with AIDS School. It was a report published in The The virus that at that time had no (PWA) appeared in his place. Amy New York Times about rare infections name would bring all three of our lives found out one day the happy news that showing up in a small group of gay men together. Soon, it would be called she was pregnant. The following day, in New York, Los Angeles, and San GRIDS—Gay Related Immune she learned that she had AIDS. She went Francisco. Deficiency. Later it was labeled HTLV- ahead and had the Before we realized what was happen- III. And even later, after people and Mark Senak, JD, is baby, who was not ing, the newFor epidemic Client spread. Review In Only. Alleven Rights nations Reserved. argued a great Advanstar deal, it got Communicationsa senior vice Inc.infected. 2005 Indiana, a 21-year-old woman named the name human immuno-deficiency president at After the show, I Fleishman-Hillard. Amy Sloan was training to be a dental virus or HIV. He writes the blog flew home to New hygienist. She was pretty and smart, the The following year in 1982, one of EyeonFDA.com York and met Joseph kind of woman that people genuinely my law professors died. Not everyone CONTINUED ON PAGE 108 PHARMACEUTICAL EXECUTIVE 108 Viewpoint AUGUST 2006 www.pharmexec.com

SENAK CONTINUED Foulon, the actor from Mark Senak and bone of HIV services, which subsidizes Los Angeles, who also had AIDS. He his partner, Joseph access to the life-saving miracles of became my partner. Foulon (left). antiviral drugs. Foulon, an actor, The challenges we all faced during The year after I met Amy and Joe, we died of AIDS in that time were unprecedented in the 1987. Senak’s went to San Francisco for a meeting of course of human and public health. For first job in law was people with AIDS. We helped start a those of us at risk, it was unquestionably writing wills for new organization called the National a time of trial. Social Security workers AIDS patients. Association of People with AIDS would not receive patients at their (NAPWA). The following November, offices. Hospital workers left patients to mine if you had been exposed. Amy passed away. The following June, lie in their own filth. I had one client Pharmaceutical companies not only Joe passed away. Over the course of the whose family built a box around him investigated the virus but also responded next few years, everyone who attended while they cared for him. Essentially, he to the opportunistic infections with both that meeting (except photographer Jane lived in a coffin until he died. treatment and prophylaxes. A fruitful, if Rosette and me) also died. An organization in New York called stormy, relationship developed between I like to believe that all of this hap- The Gay Men’s Health Crisis, where I pharma and the gay community. New pened for a reason. The gay commu- began working as a volunteer and later medications saved many thousands of nity came together and took care of served as director of legal affairs, lives, but they were often priced beyond itself in a way that was unprecedented. defended the rights of patients and the means of many patients. Doctors and scientists learned more advocated forFor their Client interests Review in and Only. out All RightsNext, large Reserved. community-based Advanstar organ- Communicationsabout the human Inc. immune 2005 system than of court. izations sprung up around the country, anyone imagined possible. The system The disease was a huge challenge for often with the assistance of the pharma- of regulation and care was changed for science and medicine. At first, no one ceutical industry. And despite the many the better, with speedier approvals for knew what caused the disease. But political differences between the two life-saving medications. I need to within five years, not only was the virus communities, they united in support of believe all of those lives were spent to isolated, but there was a test to deter- the Ryan White CARE Act, the back- make a better world.

he vaccine industry has been through quite a ride—especially recently. Though it had acquired an image of a commodity and low-margin business, the prom- ise of new technologies and increased demand has changed thatT perception. In 1989, there were no more than 10 biotech companies focused on vaccines, and by 1995 only about 50 projects were in the vaccine pipeline. Today, 180 companies are searching for these types of therapies and approximately 150 vaccines are under development. Double-digit annual growth is expected over the next decade. Why have vaccines taken off? Governments and NGOs have set aside budgets for preventive care and vaccines in the developed and developing world. Vaccination guidelines for some diseases, like the flu, have grown to include people age 65 and older, as well as those with Our Work underlying chronic illnesses. There will be a “catch-up” oppor- Is Never Done tunity—a chance to vaccinate all the people who weren’t vaccinated as infants—when more vaccines by Jörg Reinhardt, become available. That catch-up opportunity is considered a multi- head of Novartis billion dollar business for meningitis B, as well as for meningitis A, C, Vaccines & W, and Y. Whoever is on the market first wins a significant upside. There is significant unmet medical need for Diagnostics children, both infants and school children, to prevent these diseases. The principal driver of growth in vaccines will be enhanced innovation, including therapeutic vaccines; breakthroughs in technology, such as recombinant vaccines; and better immunopotentiators. Advances in production technology, such as new cell- EXEC EXAMINATION culture technology, will improve the reli- Jörg Reinhardt ability of supply. By eliminating the use of Head of Novartis eggs in production, new technology has Vaccines & Diagnostics the potential to speed manufacturing and Member of the Pharma Executive Committee increase flexibility. This would speed scala- ble manufacture and distribution of vac- 24-year company veteran cine in the event of a pandemic. Of course, Credited with shaving we need different vaccines for different nearly two years off the time parts of the globe, and while that’s one of it takes to bring a drugFor to Client Review Only. All Rights Reserved. Advanstar Communicationsthe challenges of this Inc. business, 2005 it’s also one market. Novartis beats the industry average by of the opportunities. And it means that our 18 months. work is never done. PHARMACEUTICAL EXECUTIVE 112 Viewpoint AUGUST 2006 www.pharmexec.com

CRIMINAL ENFORCEMENT FDA talks. Increasing Who listens? Scrutiny and by Peter Pitts ommunications strategies in healthcare have changed dramatically over the past 25 years. Shifting Theories People want information about their drugs. Are they going to get it from FDA? by Jack Cinquegrana and Diana K. Lloyd That remains to be seen. FDA is driven by Cscience.And many on the staff still believe that if the science is right, then nothing is wrong. Here’s an example: In 2002, when I was FDA’s associate commissioner for external relations, Janet Woodcock came to my office, waving a new-drug- approval press release and asked,“How is any- For Client Review Only. All Rights Reserved. Advanstar Communicationsbody supposed to understandInc. 2005 this? It’s written for scientists!” I felt her pain.The press office wrote a more consumer-friendly document, but the release had been “doctored up” at CDER. Rather than focusing on the public-health message, the staff had insisted on “more science.”Dr.Woodcock remarked,“That’s not going to happen anymore.”And that was the beginning of a beautiful relationship. All the science in the world will not help consumers understand why a new drug is important, or even what it does.And the 21st-century “empower- n recent years, pharma companies have become a favorite target of ed consumer” will no longer accept the time-hon- federal prosecutors. Why? Because the government has so much at ored FDA philosophy of “We talk.You listen.” stake. The numbers say it all. In 1981, federal healthcare program Especially in the area where today’s FDA is most like the agency in 1981: risk communications.With expenditures accounted for just $83.1 billion of the $295.3 billion so many new drugs, FDA must realize that doing a spent on all US healthcare expenditures. By 2004, the government better job in risk communications is not only a top spent more than seven times that amount—more than $600 bil- priority for the agency’s political survival—but a lion—on federal healthcare programs. Healthcare costs amounted marvelous opportunity to promote public health. Ito 9.4 percent of the gross domestic product (GDP) in 1981, but rose to The Vioxx imbroglio, for example, was a missed 16 percent by 2004. opportunity for the agency to face risk communications head on. Relying primarily on “Dear Doctor” A Stronger False Claims Act letters does not cut the mustard in 2006. Congress amended the False Claims Act (FCA) in 1986, adding new So be proactive. Spread the gospel. Use the power to a dormant statute by making it easier to prove liability and bully pulpit. Drive the agenda. Or be driven by it. Welcome to 2006. adding stiffer penalties. In 1987, only 12 percent of Jack Cinquegrana is FCA cases involved healthcare fraud. By 2005, head of the nearly 90 percent of FCA defendants came from the Peter Pitts is senior vice government enforce- healthcare industry. As of January 2006, six of the ment group at president at Choate, Hall top-13 FCA civil awards were lodged against Manning & Stewart LLP pharma companies. Selvage & Lee HIPAA Fuels Prosecutions Diana K. Lloyd is In 1981, the federal government reported 47 con- a partner in the victions for criminal healthcare-fraud violations. By government enforce-For Client Review Only. All Rights Reserved. Advanstar Communications Inc. 2005 ment and healthcare 2004, the number reached 459. Why such a dra- groups at Choate, matic increase? One explanation is the enactment of Hall & Stewart LLP the Health Insurance Portability and Accountability Act (HIPAA) in 1996, which CONTINUED ON PAGE 114 PHARMACEUTICAL EXECUTIVE 114 Viewpoint AUGUST 2006 www.pharmexec.com

CINQUEGRANA AND LLOYD CONTINUED allocated substantial new resources to combat healthcare fraud. Within a year, HIPAA funded 285 new Department of Justice (DOJ) healthcare fraud positions and created new criminal offenses for healthcare fraud, expanded anti-kickback prohibitions, and provided new prosecutorial tools—such as expanded subpoena authority, injunctive relief, and freezing of assets. The Corporate Death Penalty The Office of Inspector General (OIG) increasingly has excluded companies guilty of healthcare fraud from federal reimbursement programs—a virtual death sentence for sales. In 2005, OIG reported 3,806 exclusions, a 270- percent increaseFor Clientfrom nine Review years earlier. Only. All Rights Reserved. Advanstar Communications Inc. 2005 To avoid exclusion, companies sign Corporate Integrity Agreements to ensure implementation of fraud-prevention measures. Companies also have had to become partners in government enforcement, and, for example, investigate possible violations by employees and disclose them to the government. These imperatives arise from the DOJ policy memos issued in 1999 and 2003, which outline factors that determine whether to prosecute the corporation itself. In the late 1980s, most healthcare fraud cases involved schemes to supply products not deemed medically necessary, or to obtain increased reimbursement through practices like upcoding or bundling. By the mid-1990s, the gov- Integrity Now ernment was winning the largest settle- ments, such as those against TAP and Schering Sales Corp., with anti-kick- The pressure to deliver results in today's back laws. climate could push any company to its Recently, anti-kickback theories of prosecution have been applied in more ethical breaking points. With the obstacles complex settings, such as the relationship that our global village will face in the between pharma companies and PBMs. future, it is vital for corporate leaders to Off-label marketing also has become a focus, as evidenced through the 2004 ensure that integrity is kept front and cen- $430-million settlement of charges relate- ter in the minds of colleagues. Promoting ing to Warner-Lambert’s Neurontin. and nurturing a culture of integrity now Moving forward, as the Medicare Part D benefit takesFor its toll—$534 Client Review to $720 bil-Only. All Rights Reserved.will pay Advanstaroff when Communications necessary challenges Inc. 2005 lion over the next 10 years—government and forthcoming opportunities arise later. prosecutors will focus on this area. Russell J. Edelstein, an associate at the firm, also con- by Chris Begley,CEO, Hospira tributed to this article. PHARMACEUTICAL EXECUTIVE 116 Viewpoint AUGUST 2006 www.pharmexec.com

COMPLIANCE remember when Fred Hassan took the reins of Schering-Plough in 2003. He wanted good ethics to become a habit, taking a cue from Fire Prevention the Aristotle quote “We are what we repeatedly do.” He saw ethics and by Brent Saunders compliance as something defined as I“business integrity.” As the company’s chief compliance officer, I was enlisted to help fulfill that vision. He asked that I report directly to him—a pioneering step at the time—to create a strong, globalized compliance function. Certainly, compliance is not new to pharmaceutical companies. But since the late 1990s, regulations for all aspects of our business have become more complex and more strictly enforced. In 2003, most For Client Review Only. All Rights Reserved. Advanstar Communicationsnotably, the US governmentInc. 2005 outlined highly specific standards for regulatory compliance, in the Health and Human Services Office of Inspector General (OIG) Compliance Program Guidance for Pharmaceutical Manufacturers. In response, the industry codified compliance programs and ramped up training to make sure every employee knew the regulations. When I worked with the rest of the team to modify our current practices, we aimed not only to enhance compliance but to benefit our business. With new reps, for instance, we weave compliance into the program as we train them in how we do business. Don’t just avoid transgressions; achieve a competitive benefit for customers, shareholders, and other stakeholders. Compliance is still evolving. The industry is moving away from firefight- ing toward fire prevention, ensuring that projects and programs will be carried out correctly before they are under- taken. We will begin to see the scope of compliance programs expand beyond sales and marketing to R&D and manufacturing. Early on, our company made the compliance officer a part of the senior management team. I expect that we Brent Saunders will see compliance become a central is senior vice president, global function in high-performance compa- compliance nies, as it becomes “professionalized” and business and even globalized, with similar For Client Review Only. All Rights Reserved. Advanstarpractices, for Communications Inc. 2005 Schering-Plough enforcement trends already evident in Europe, Asia, and Latin America.

Photograph by Bill Bernstein PHARMACEUTICAL EXECUTIVE 118 Viewpoint AUGUST 2006 www.pharmexec.com

Mike Luby is the CEO of TargetRx

LIFECYCLES he unparalleled prosperity of the uct with the same mechanism was intro- pharma industry in the 1980s duced, giving manufacturers time to and 1990s is best summed up as cash in on their innovations. But in each “the age of the blockbuster.” case, additional drugs in the same cate- Fast The billion-dollar drug moved gories also achieved blockbuster status, from rarity to commonplace, as including Zantac, Vasotec, Zocor, drug therapies replaced more Lipitor, Paxil, and Zoloft, to name a few. intrusiveT measures. In 1977, Tagamet For the most part, the honeymoon Followers replaced surgery for ulcers. Capoten, enjoyed by innovator compounds is over. by Mike Luby approved in 1982, revolutionized the Second- and third-category entrants come treatment of hypertension. And who to market faster today. Consider Cozaar, can forget the breakthrough treatment the first among new antihypertensives to for depression that turned the United reduce the side effects of ACE inhibitors. States into “Prozac Nation?” Cozaar launched in 1995, and was fol- These breakout drugs and others lowed by Diovan in 1996. Diovan not defined two decades of pharma history. only followed faster, it took over as mar- Each enjoyed at least four years of market leader. Likewise, the breakthrough ket exclusivity before the second prod- biologics, Enbrel and Remicade, received approval within one year of each other in Category Innovator drug Follow-on drug the late 1990s. [condition] [year of US introduction] [year of US introduction] Probably the most dramatic case of a H2 receptor antagonist [ulcer disease] Tagamet [1977] Zantac [1982] “fast follower” in a breakthrough cate- ACE inhibitor [hypertension,heart failure] Capoten [1982] Vasotec [1987] gory was Celebrex, approved in Decem- ber 1999, following the approval of HMG Co-A reductase inhibitor [hypercholesterolemia] Mevacor [1987] Pravachol & Zocor [1991] Vioxx in May. One sees a similar situa- SSRI [depression] For Client Review Only.Prozac All[1988] Rights Reserved.Paxil [1992] Advanstar Communications Inc. 2005 tion emerging for Gardasil, Merck’s new Angiotensin II receptor blocker [hypertension] Cozaar [1995] Diovan [1996] cervical cancer vaccine, which is closely Anti-TNF [inflammation] Enbrel [1998] Remicade [1999] followed by a competing GlaxoSmith- Cox II [inflammation and pain] Celebrex [January 1999] Vioxx [June 1999] Kline product. CONTINUED ON PAGE 120 PHARMACEUTICAL EXECUTIVE 120 Viewpoint AUGUST 2006 www.pharmexec.com

LUBY CONTINUED The last quarter of a century shows that me-too drugs offer Thinking multiple benefits, including faster devel- Caring for opment, more options for patients, and, not least, a healthy level of competition Locally to keep pricing in check. Pain in a by Lenny Vicciardo Clinical Execution a Must Regulated n the early 1990s, many Follow-on drugs can dominate mar- pharma companies went kets. The most notorious example is regional, hoping that a Lipitor, which is the fifth statin to mar- World localized analysis of ket, following Mevacor, Zocor, by B. Eliot Cole, MD markets and promo- Pravachol, and Lescol, but which tional activities would became the number-one selling drug in optimize sales and mar- the world. Today, being first is less Iketing spend at the most important than being best, especially in granular levels. Today, clinical development and sales and mar- renewed interest in the local keting execution. approach goes beyond On the clinical side, the industry has tracking prescription activ- improved itsFor batting Client average Review with FDA Only. All Rights Reserved. Advanstar Communicationsity Inc. by zip2005 code. Companies approvals, and shortened cycle times for are using new research tech- clinical programs. But mistakes have been niques that provide local costly. Procter & Gamble’s Actonel had a intelligence with statistical sizeable lead on Merck’s Fosamax in the significance. race to treat osteoporosis with bisphos- Comprehensive data phonates in the US market. But sub- drive localized market optimal dosages in several trials forced n 1981, a new professional group, the knowledge. But as restric- P&G to repeat several studies, which American Pain Society (APS), was formed to tions on existing secondary allowed Fosamax to get to market first— understand and treat pain.And although data sources become patients still hurt today,there has been an execution misstep with a price tag of increasingly common, more than $1 billion dollars. progress: The science and understanding of Ipain has evolved.The Cytochrome P450 (CYP450) companies need to invest system is no longer a curiosity in biochemistry and more heavily in proprietary Marketing Still Lags Behind intracellular physiology lectures.Among other information sources, which Pre-launch marketing plans are easy uses, it has become the basis for understanding measure activity at the to write, the old joke goes, because they drug-drug interactions and explaining medication local level to enhance sales are all the same. You publish papers, go toxicity in special populations, and among those and marketing activities. to congresses, develop opinion leaders, that must rely on rational polypharmacy.So we and so on. Marketers just change the know more. But we cannot always prescribe more. product name and choose physician Over the past 10 years, the pendulum has swung specialties to fit their new brand. back and forth between prescribe-nothing-for- Indeed, while clinical development pain to prescribe everything. Without clear guidance from one consistent has advanced during the blockbuster central authority (read: DEA), physicians live in an era, sales and marketing practices have “Alice in Wonderland” reality where one group not. In the case of Tagamet, SmithKline demands better pain management while another had six years to iron out positioning threatens prosecution for being overzealous. and messaging before competition Physicians worry that they could pay huge fines for heated up. Today’s manufacturers might coding errors, suffer incarceration for good med- have six months. A “miss” in position- ical judgement or, if they are “lucky,”face only mal- ing, messaging, or strategic implementa- practice suits. Is it any surprise that there is a tion is costly, since follow-on entrants national shortage of pain practitioners? Or that are in hot pursuit. Industry practices millions of Americans languish in pain without help? Our recourse is to have not progressed much over the past ride the swinging pendu- 25 years, so the pharmaceutical indus- B. Eliot Cole,MD, For Client Review Only. All Rights Reserved.is the executive Advanstarlum until it stops.And Communications keep Inc. 2005 try needs to re-think the marketing director of the screening for substance Lenny Vicciardo process from pre-launch through the American Society abuse, although genetic is president entire lifecycle, as the marketing stakes of Pain Educators markers aren’t absolutely and COO of Ventiv Pharma are higher now than ever before. reliable. Analytics Viewpoint

You’ve Come a Long Way, Baby Q&A with Michael Dey, MD President of Wyeth Women’s HealthcareFor Client Review Only. All Rights Reserved. Advanstar Communications Inc. 2005 What was the field of women’s health like in 1981? It was a time when women were just starting to enter science, so there were still relatively few women in the medical field—I remember 70 percent of ob/gyns were men—and medical schools were trying to get women into the programs. At the same time, women were beginning to get more involved in clinical studies. Until then, there was a fear of using women in clinical trials, which was partly related to the issues surrounding thalidomide, but also to a pater- nalistic need to protect women. What were the major breakthroughs in the last quarter century? There certainly have been advances in specific areas, like recognition of osteoporosis as an unmet medical need, but I believe the real breakthroughs will come with understanding what linkages at the molecular level correlate with gender: Why are women more likely to suffer from arthritis, Alzheimer’s, and macular degeneration? Do you get a sense of knowing women better today? We certainly recognize the unmet medical needs more today than we did 25 years ago, and that will be the key to enable us to do what’s right for women. We now focus on women in market research and clinical reports. We ask ob/gyns what issues theyFor see.Client One ofReview the biggest Only. issues All Rights Reserved. Advanstar Communications Inc. 2005 is obesity, which affects the cardiovascular system and can cause diabetes. If we can cut down on obesity in the United States, we can roll back diabetes the way quitting smoking cut back on lung cancer.

Photograph by Bill Bernstein PHARMACEUTICAL EXECUTIVE 124 Viewpoint AUGUST 2006 www.pharmexec.com

PUBLIC RELATIONS Chicago, and Art Ulene, who was every- where. The “media list” was short and messages were simple—new approvals, indications, and clinical trials. Tower of Babel Today, healthcare is a virtual Tower of Babel, with hundreds of groups, from by Michael M. Durand medical societies to government agencies to private blogs and newsletters, vying to make their voices heard. In this environment, it is no longer simply a matter of developing a media list of the top-50 newspapers. The list of groups that need to be informed has grown, and at the same time, become Michael Durand is more targeted. Just Google “breast can- managing director of cer organizations,” and you will find healthcare strategy and planning for more than 23 million entries. PR pro- Ogilvy Public grams today are infinitely more complex, Relations Worldwide and professionals must identify which For Client Review Only. All Rights Reserved. Advanstar Communicationsgroups matter on Inc. specific 2005 issues—payer relations, public education, etc.—which organizations will support objectives that are vital to the brand, and which groups are intractable in their opposition to pharmaceutical companies. Mass Media and Mickey Mantle wenty-five years ago: Ronald young adult. This transformation was A poll conducted by NBC News in Reagan, “the great communica- largely motivated by and dependent on the late 1980s found that healthcare tor,” was in the White House; change drivers that fundamentally was the number-one topic of interest for Walter Cronkite, an even greater amended the relationship between con- Americans. TV networks and individual communicator, just left CBS; the sumers and the healthcare industry. Of stations added health and medical seg- primeT interest rate reached 21.5 per- course, the AIDS epidemic brought con- ments to their regular newscasts. cent; and The New York Times first sumer advocacy to the forefront. But Newspapers, such as The New York reported about a strange cancer, Kaposi there were several other issues that Times and The Washington Post, cre- sarcoma, that was striking gay men. played a part in those changes as well. ated weekly sections to document med- Drug marketing consisted of detailing ical advances. Today, newspapers still and advertising in medical journals. Tower of Babel maintain health sections, but sadly, Pharma marketers rarely considered Do you remember Medical Tribune crime and celebrities have replaced TV using PR in pharma marketing. and Medical World News? If you health segments. But over the past quarter of a cen- worked in healthcare PR, you probably But pharma realized the importance tury, public relations has come of age, targeted those publications, a few con- of celebrities early on. CONTINUED ON PAGE 126 much as an uncertain, gangly teenager sumer books, and “TV docs,” such as transforms into a mature, confident Frank Field in New York, Bruce Dan in

Q:How do you stay ahead of news today? The Internet has spawned efforts to tap into, as well as manage, word-of-mouth marketing. Because news and information travels so fast, theFor need Client to spot Review emerging Only. trendsAll Rights both Reserved. outside and Advanstar inside Communications Inc. 2005 healthcare has never been greater. Monitoring Internet buzz has become an essential part of understanding not only the competitive landscape, but also your customer base. JACKIE HERR, CEO OF IGNITE HEALTH PHARMACEUTICAL EXECUTIVE

126 SusanAUGUST Youdovin 2006 www.pharmexec.com Viewpoint is president of B&Y Communications

DURAND CONTINUED In the mid-1980s, CIBA-Geigy (now part of Novartis) was Telling the looking for a unique way to introduce its anti-inflammatory drug, Voltaren Story: From (diclofenac), in the United States. Though a success in Europe, would Product Voltaren be regarded as simply another Publicity to NSAID in America? The answer was to enlist baseball PR Partner legend Mickey Mantle as a spokesman. Mickey’s job was not to sell Voltaren, by Susan Youdovin per se, but to discuss on radio and TV n the 1980s, PR was an afterthought—a component his experience with arthritis and the to be added to the launch plan, typically the night importance of seeing a healthcare pro- Ibefore it was presented. And while changes over the fessional for help. For the first time, a last 25 years have been revolutionary for every com- celebrity was used in a PR program to munications discipline, it’s particularly true of public talk about his illness. 1 relations. Here’s a pulse of the healthcare PR industry Unfortunately, the slugger’s enthusi- from its leading professionals asm outpaced his PR handlers’ ability to On the profession Ilyssa Levins [1], HCIL keep him “on message,” and shortly he Consulting, says, unlike the 1980s, today “pharma is For Client Review Only. All Rights Reserved. Advanstarhyper-focused Communications on regulatory compliance. Inc. 2005 Firms that exclaimed, “Voltaren cures hangovers.” understand the rulebook are positioned to earn the CIBA was not amused, nor was FDA. respect of current and prospective clients and The lesson learned from the Mantle 2 increase the scope of their business.” saga was that using celebrities could be On PR’s role Kathryn Metcalfe [2], Novartis an extremely powerful weapon. Yes, Pharmaceuticals, observes, “PR has become much lots of Voltaren was sold. But it became more sophisticated and multidimensional. Twenty-five apparent that if PR is not carefully years ago we were publicists. Now we’re effective busi- aimed, and if the message—not to men- ness partners, helping influence all marketing chan- tion the messenger—is not controlled, nels. This is a great career choice for the next 25 it can have dangerous consequences. 3 years. And we’re in for a heck of a ride!” On the marketing mix Donna Ramer [3], StrategCations, notes, “Advertising is a function of News Never Sleeps marketing, while PR is a function of management. News no longer travels the space-time More companies are looking to PR to ensure that mes- continuum. We did not rewrite Einstein. sages created by the various communications disci- But technology has allowed us to skip plines support objectives across the franchise.” over the barrier of geographical distance. 4 On clinical trials Joe Boyd [4], MCS, recalls, “The In the early 1990s, my Porter emergence of the clinical trial as a key point of commu- Novelli colleagues showed clients how nication with physicians and the public has had as news about serious adverse reactions much of an impact on the pharma industry as any to an antihistamine could spread from other change over the past 25 years.” On trust Jeff Winton [5], Schering-Plough, New York to Cadero, Brazil, in half a observes, “One of the biggest changes has been the week. The point was to force clients to fact that we have been forced to become much more 5 recognize that they had precious few reactive to allegations against our companies, brands, days to prepare global markets for bad and industry.” Critical scrutiny, hopefully, has “taught news. In 2006, we now have mere us to listen more, talk less, and focus on the needs of moments before news reaches every the patient.” corner of the world via 24/7 On media fragmentation Deborah Myers [6], newswires, all-news cable networks, CRT/tanaka, notes, “While the decentralization of health information is challenging, healthcare PR has and countless Web sites. 6 Today, we also have much more to an opportunity to lead the industry in the role of edu- cating the consumer.” say. In the Reagan era, we never On skills Kathy Cripps [7], Council of Public dreamed of grappling with the cost of Relations Firms, notes, “Today’s healthcare PR lead- medicine. ItFor is a burdenClient thatReview weighs Only. on All Rights Reserved. Advanstarers must Communications be as well-versed in public Inc. affairs, 2005 crisis every healthcare stakeholder and communications, corporate reputation, and regula- impacts every decision we make. tion as they are in thought leadership, advocacy, and Hopefully, it will not take us another 7 patient relationships.” 25 years to find its solution. PHARMACEUTICAL EXECUTIVE 128 Viewpoint AUGUST 2006 www.pharmexec.com

CLINICAL TRIALS revised regulations to expand access to experimental drugs for patients with serious diseases and no alternative therapies. This was all on top of the 25 guidelines Patient Safety FDA prepared during the middle and late 1970s, with the help of its standing advisory committees, to facilitate the design of well-controlled trials. and Protection Patient rights Our progress during the by Earl Hulihan past quarter century can be traced to the Declaration of Helsinki, which the World Medical Association created back in 1964. This state- first entered the world of clinical ment of ethical princi- research in the mid-1970s as an ples governing investigator at a major US teaching research on human university hospital. It sure was a dif- subjects has been ferent world back then. Although amended six times, the hospital always had dozens of most recently in 2000. clinical trialsFor Clientunderway, Review pharma Only. All Rights Reserved. Advanstar Communications Inc. 2005The push for Isponsors rarely, if ever, advised us of our patient rights led to regulatory responsibilities. increased cooperation In a way, I suppose our team was among nations and lucky. When the FDA Compliance sponsors. The World Program and NIH Surveillance activi- Health Organization ties were being developed in the 1970s, pushed proposals for our institution’s clinical studies had the ethical treatment of “opportunity” to be inspected by these research subjects. regulators. We knew to cross our “t’s” In the early 1990s, and dot our “i’s.” We also knew from the International our internal trainings, as well as those Earl Hulihan Council of Harmon- is vice president of rare visits from early CRA (clinical global regulatory ization (ICH) was research associate) pioneers like John affairs and quality formed to create uni- Barden of Stuart Pharmaceuticals, assurance fied, ethical, and sci- at Medidata about the importance of documentation Solutions entific quality stan- to support the integrity of the data and dards for clinical trials to protect research subjects’ safety. in Europe, the US, and GCP At the time, people thought clin- concepts and compliance issues inherent Japan. In 1996, ICH released these stan- ical research in the United States was in drug development. But if we weren’t dards and since then, many other better than anywhere else. In reality, the on the manufacturing side, developing national regulatory bodies have quality of research was comparable to an in-depth understanding of research adopted them as laws or guidance. other countries—but non-US sites had regulations was someone else’s job. Compliance with these standards lower expectations in terms of research Changing regulations In 1987, FDA ensures that the rights of trial subjects documentation and sponsor monitor- amended the drug approval process to are protected according to the ing. By the early 1980s, many countries more efficiently get good drugs on the Declaration of Helsinki, and that the had still not yet developed specific regu- market—and ensure the drugs not clinical trial data are credible. lations addressing clinical research con- shown to be safe and effective stayed off. Over the last quarter of a century, duct. Colleagues of mine would The regulations also were we’ve seen new data-protection standards say GCP (good clinical prac- intended to improve on the local and national level—Germany tice) in the 1970s stood for FDA’s post-marketing being an early model—to the more recent “Greedy Commercial Colleagues would surveillance and EU Commission Directive on Data Pilot” programs, and say GCP in the 1970s provide closer Protection (95/46, which went into effect later in the 1980s,For Client Review stoodOnly. Allfor Rights“Greedy Reserved.cooperation Advanstar Communicationsin 1998, and the Inc. US Safe 2005 Harbor initiative “Growing Confused Commercial Pilot” between clinical in 1999). These are efforts to ensure that Physicians.” And there programs and in sponsors and data is secure and that privacy protection is some truth to this. We the 1980s “Growing FDA. It also was a exists at all levels of contact and use. knew about the broad Confused Physicians.” time when FDA CONTINUED ON PAGE 130 And there was some truth to this. PHARMACEUTICAL EXECUTIVE 130 Viewpoint AUGUST 2006 www.pharmexec.com

HULIHAN CONTINUED DEAL MAKING No more paper When it comes to technology, perhaps the most significant regulatory evolution within the past 25 years has been Trade M&A for L&A the movement away from paper- based processes. For the last 10 by Joseph J. Brindisi years, our use of technology (including electronic patient- reported outcomes, electronic data management, and electronic clinical-report forms) changed the way we conduct trials, handle and analyze data, and ensure appropriate safety monitoring and protections. This has led to the adoption of regulations surrounding electronic records and electronic signatures—theFor most Client famous Review of Only. All Rights Reserved. Advanstar Communications Inc. 2005 these being 21 CFR Part 11. Joseph J. Brindisi is vice president Other countries around the of business world, from Switzerland to development and Japan, have since adopted simi- general counsel of Kyowa lar regulations. Pharmaceutical In 25 years, we have seen more regulations and less experienced regulators (through retire- f pharma got it right in the past 25 pendently. So far, however, the success of ments and transitions to outside years, bigger is better, and consolida- that deal has not been replicated. employment), more players in tion is best. Merging companies lever- In contrast to M&A, licensing has drug development while mergers ages resources, from R&D and sales provided a more flexible and focused and acquisitions have influenced to administration. By broadening way to fill research gaps and acquire corporate memory, and more research and marketing portfolios, it products for clinical development. More movement from a hands-on increases a company’s shots on goal; than 50 percent of NMEs launched in approach to greater reliance on Icuts the impact of misses; and fills gaps in the United States in the last decade remote management. territory, products and capacity. involved one or more licensing transac- As chair of the Drug This trend became unmistakable in tions. To price deals correctly, companies Information Association’s global the late 1980s with the Bristol- insisted on strong data support, and as focus area on validation for over Myers/Squibb and the SmithKline/ the decade wore on, “show-me-the- 13 years, I witnessed technology Beecham deals, and hit a peak—for now data” morphed into “show-me-the- vendors struggling to cope with at least—with Pfizer’s mammoth acquisi- product!” “demonstrating through docu- tions of Warner Lambert and Pharmacia. Bristol-Myers Squibb (BMS), for mentation” that they met or Biotechs got into the act as well with the example, licensed Erbitux from exceeded various national regula- Amgen/Immunex deal. ImClone for $2.5 billion to breathe new tions—whether electronic records Enhanced leverage serves long-term life into its mature oncology franchise. and signatures or GCP. However, goals. But mergers often have been driven Earlier-stage products are lower risks their documentation efforts gen- by short-term growth and pressure to for experienced companies, as in-house erally failed to meet those meet the expectations of Wall Street. But developers take ownership of outside requirements related to data the crucial factor in successful mergers products. Eli Lilly licensed a preclinical integrity and safety management. has been cultural comfort. Ignoring cul- mitotic kinesin Eg5 inhibitor from To become more efficient, tural conflicts has brought integration Kyowa Hakko, for example, and will global, and secure, we must distress. run the clinical oncology trials itself. ensure that theFor necessary Client Review safe- Only. All RightsStanding Reserved. out from the Advanstar crowd as per- CommunicationsBusiness development Inc. 2005 may look guards are in place to ensure haps the most successful acquisition in 25 opportunistic. But long-term synergies data integrity, subject confiden- years is Roche/Genentech—a brilliant can transform the health care indus- tiality, and adequate safety in combination of diversification by separa- try—whether its ownership of compa- clinical trial management. tion. Genentech has been thriving inde- nies or products that change hands. Viewpoint

Return to Science by Abbie Celniker, senior vice president, R&D strategy and operations and pharmaceutical sciences, Millennium Pharmaceuticals

n the late 1990s and early 2000, there was a huge drive toward productivity, and the biotechnology/pharmaceutical industry adopted an industrialized approach to drug discovery and development. IMarketing muscle forced sales in many arenas, and operationally, companies became more focused on speed and process improve- ments than on the critical elements of success: the science and tools, and the expertise and approaches that could change how drug discovery and development are done. The scientific response to this industrialized movement was the evolution of concepts such as translational biology/medicine, the use of biomarkers, and adaptive design of clinical trials. Companies that returned to the science and successfully applied these concepts throughout their drug discovery and development programs are now delivering novel therapies to For Client Review Only. All Rights Reserved. Advanstar Communicationsthe marketplace. Inc. 2005

Photograph by John Halpern PHARMACEUTICAL EXECUTIVE 134 Viewpoint AUGUST 2006 www.pharmexec.com

The goal was to increase the productivity of drug discovery by testing huge numbers of compounds against known drug targets, in hopes that statistics would work in the researchers’ favor. Linus Pauling, who won Nobel Prizes in chemistry in 1954 and in peace in 1962, once remarked that the best way to get a good idea is to get a lot of ideas. Uncertain Boundaries The industry looks quite different in the year 2006. The line between pharmaceutical and biotechnology companies grows fuzzier as these companies combine efforts via mergers and cross- licensing, and reach into the same tool- box, increasingly often, in search of better therapeutics. For Client Review Only. All Rights Reserved. Advanstar CommunicationsCombinatorial Inc. chemistry 2005 and high- throughput screening have, indeed, increased the productivity of drug dis- Kevin Hrusovsky is covery experimentation. Cost per sam- CEO of Caliper ple has gone down, and companies can Life Sciences now automate and run experiments 24/7. But the quality and clinical relevancy of data from these experiments INNOVATION also dropped, which cut the productivity of pharmaceutical pipelines. In the last two decades, R&D spending increased almost ten-fold, while the number of Drug Discovery new molecular entities declined. Pharmaceutical companies, well by Kevin Hrusovsky aware of this trend, are now turning their focus to striking a better balance between productivity and relevancy. or many of us, 1981 doesn’t suit two years later, going public after Luckily, other advances of the last 25 seem so long ago. I remember cloning erythropoietin, which led to the years have given them some useful vividly the buzz around a new launch of Epogen in 1989. starting points. The human genome type of company that was start- On the other side of the block, Mario has been sequenced, and advances like ing to emerge at the time: Geysen, a scientist at Glaxo Wellcome, polymerase chain reaction (PCR), a biotech. Genentech, Chiron, and developed a way to synthesize peptides technique for amplifying DNA, make Amgen, all less than five years on pin-shaped solid supports, establishing it possible to mine the rich stores of Fold in 1981, were the new kids on the the important new technique of combina- knowledge that the genome holds. By block. Until that time, the industry was torial chemistry. Also in the early 1980s, studying disease pathways at all lev- dominated by the likes of Johnson & the world’s first automated laboratory els—understanding the genetic cause Johnson, Pfizer, and Merck—all of robotic system was launched, the of disease, studying gene function which were established in the mid- Zymark Zymate. through new RNA tools, 1800s. Things were about to change. The advent of these monitoring protein activ- Recombinant DNA was the hot tech- two technologies— The advent ity, and using new in of new technologies nology of the early 1980s. Genentech combinatorial chem- made high-throughput vivo models—scientists had just gone public after cloning istry and automa- screening possible have the means to gain insulin and thenFor Clienthuman growthReview hor- Only. Alltion—allowed Rights Reserved. for Advanstarand blurred Communications the lines Inc.a much 2005 more relevant mone. In 1982, the world saw the an entirely different between pharma and and comprehensive launch of the first recombinant DNA approach to drug biotech companies. understanding of dis- drug—human insulin, which Genentech discovery: high- Discovery is now faster ease states. had licensed to Lilly. Amgen followed throughput screening. but the quality has CONTINUED ON PAGE 136 dropped off. PHARMACEUTICAL EXECUTIVE 136 Viewpoint AUGUST 2006 www.pharmexec.com

INNOVATION HRUSOVSKY CONTINUED Productivity and Safety In March 2006, FDA issued its Critical Path Opportunities Report, which outlines how Drug Delivery industry can begin to address productivity and safety issues. by Morris Laster The first baby steps have been taken toward embracing these challenges. Already scientists are nce the handmaiden of drug work to improve drug properties, espe- at work identifying new bio- discovery, drug-delivery tech- cially oral availability, through rational markers and new experimental nology has undergone a revo- drug design and molecular modeling. techniques, such as imaging, lution during the past 25 years. Companies that can enable technolo- which will define the next era of Initially seen as merely a gies, such as pro-drugs, in concert with drug discovery and development. medium for a drug substance, advances in medicinal chemistry will The next 25 years are about drug-delivery technologies are overcome long-time drug-delivery collaboration to maximally Onow viewed as tools for modifying the challenges, such as crossing the blood- impact the clinical relevancy of pharmacologic properties of drugs, brain barrier. Combining proteins, drug discovery. Pharma compa- improving methodsFor Client of delivery, Review and Only. tar- Allsuch Rights as insulin, Reserved. with thyroid Advanstar hormone Communicationsnies, scientists, Inc. 2005 academia, govern- geting drugs to specific locations. could enable preferential uptake of ment, technology companies, tool Progress in the fields of microencap- insulin by the target organ, like the makers, business leaders, manu- sulation, polymer technology, and liver, and thereby enhance the meta- facturers, regulators, and other nanoparticles now allow scientists to bolic effects of insulin. industry participants need to prolong the effect of drugs with short In the next decade, drug delivery tech- work together to come up with half-lives and facilitate administration nologies will be a focal point of competi- solutions that are more clinically of drugs that are relatively insoluble— tion within the industry. The success of relevant to drug discovery and and finally overcome the gastric barrier specific drugs will be tied to innovative development. Louis Pasteur once that either resulted in too rapid absorp- delivery techniques, which enable the tar- said, “Science knows no country, tion and metabolism of drugs or poor geting that will exploit the clinical prop- because knowledge belongs to bioavailability. erties of a new generation of drugs. humanity, and is the torch which On the horizon, companies are illuminates the world.” developing a new generation of sophisticated external device-based delivery Collaboration systems. Targeted drug delivery has Our challenge is great. There already advanced with new polymer- is so much yet to discover about based chemotherapy implants, such as systems biology, the causes of Gliadel (polifeprosan 20 with carmus- disease, and the future of per- tine implant) for brain tumors and sonalized medicine. To address drug-eluting coronary artery stents. these issues, we need innovative Inhalation systems that deliver insulin ways of working and new part- through the lungs also are emerging, nerships. Caliper Life Sciences, with Mannkind’s Technosphere insulin for example, is working with system and Aradigm’s AERx hard on Affymetrix to automate the heels of Pfizer’s Exubera. Closed- microarray systems to enable loop insulin pumps administer the type of high-throughput col- insulin based on real-time glucose laborative experimentation that monitoring, which radically we believe will help the industry improves how patients treat realize the dream of personal- their disease. ized medicine. The boundaries of drug The last 25 years were delivery and drug sub- defined by a revolution in scien- Forstance Client Review Only. All Rights Reserved. Advanstar Communicationstific technology Inc. 2005 that extended Morris will blur the limits of what is possible in Laster, MD, is CEO of in the near science. If we work together, the BiolineRx future, as next 25 years can be an era that researchers revolutionizes human health. PHARMACEUTICAL EXECUTIVE 138 Viewpoint AUGUST 2006 www.pharmexec.com

JOURNALS Credible Lit by Wendy Balter and Marsha Scott

uthor name recognition gets trials noticed in the literature, so big names have always been desirable. Not so many years ago, companies would first conduct clinical studies, and then seek top opinion leaders inA the field as authors—whether they prefer to review a well-written manu- For Client Review Only. Allwere Rights investigators Reserved. or not. Advanstar In fact, on Communicationsscript and approve Inc. the 2005 use of professional many occasions, journal articles were writers under the author’s control; conse- already written before the first author quently, the medical publishing industry was approached. is moving toward acknowledgement of In 2005, this issue came to light when all contributors to an article, to eliminate Beyond Georgetown University School of ghost writing. Medicine professor Adriane Fugh- Another development is the require- Berman, MD, was approached with a ment for clinical trial registration and the draft of a review article. She turned it posting of the results. PhRMA, the Inter- down, and wound up as a reviewer for national Federation of Pharmaceutical Firewall the article, which was submitted under Manufacturers and Associations, the another author’s name. She subsequently European Federation of Pharmaceutical by Susannah wrote an opinion piece for the Journal of Industries and Associations, and the Schmitz Amiteye General Internal Medicine on publishing Japanese Pharmaceutical Manufacturers practices in the pharmaceutical industry. Association issued a joint statement in Now, all reputable journals have strin- 2005 requiring online registration of clin- he OIG guidelines, PhRMA gent requirements, similar to those of the ical trials and posting of results within Code, and newly updated International Committee of Medical one year of first approval. The journals ACCME Standards for Journal Editors (ICMJE), to eliminate that follow the ICMJE guidelines (over Commercial Support have “guest authors” from medical literature. 600) actually require online trial registra- made pharma rethink how it Authors must have a pivotal role in the tion at the time of first patient enrollment handlesT continuing medical edu- design of the trial, and acquisition, analy- in order for the eventual manuscript to cation and non-CME programs. sis, and/or interpretation of data; they qualify for acceptance. These new guide- must have intellectual control of the man- lines need to be factored into a publica- Medical education partners have uscript, and sign off on the final version. tion plan to ensure that the data is inter- reorganized to focus on either CME Review article development is moving preted by the investigators, not individu- or “promotional” education, or to in the same direction, with the most for- als dredging online databases. create sister groups. The Pharma- ward-thinking companies developing The trend toward more rigorously ceutical Marketers Directory internal guidelines that developed medical literature is one that reflects this change: In 2005, the leave content devel- can help re-establish the trust among the PMD lists 330 medical education opment entirely pharmaceutical industry, publishers, and services companies, versus 250 to the author. the medical com- Authors must have While the use Wendy Balter munity—to ensure in 2003, an (top) is president Susannah a pivotal role in the of profes- that the peer- Schmitz For increaseClient Reviewof Only. All Rights Reserved. Advanstar Communicationsand Marsha Scott Inc. 2005 design of the trial. is SVP,director of Amiteye is VP, 32 percent sional writ- reviewed literature account They must have ers is decried scientific services, for retains the respect director,The in just two intellectual control Phase Five Selva Group by some, Communications that it has enjoyed years. of the manuscript, most editors in the past. and sign off on the final version. PHARMACEUTICAL EXECUTIVE 140 Viewpoint AUGUST 2006 www.pharmexec.com

Medical education back in the old days was How the “smiling- nothing like it is today. “ Advisory Board patient-walking- Meetings were actually enjoyable, and we held through-a-field-of- them in great resort areas where we worked flowers” ad came on clinical issues in the morning, played golf or about… by Jay tennis in the afternoon, and went out for a great Carter, SVP, director dinner in the evening. of client services, Marketers, the doctors we served, and those AbelsonTaylor businesses related to the pharmaceutical industry he trend toward consolidation among pharma companies has given us senior wereFor proud Client of Review our Only. All Rightsmanagers Reserved. who recognize Advanstar long-term Communications marketing implications Inc. and2005 who demand accomplishments— results—and ROI—based upon quantitative metrics. proud that healthcare This was not always the case. In years past, creators of brand identity asked was our country’s doctors what they liked. The results shaped creative decisions even though doc- Ttors inevitably, even today, select happy, smiling patients, which results in ads that largest export and prouder still that the look alike—and in physicians who can’t remember the name of your product, much public appreciated all less your key claims. we were doing to change During the last two decades, companies and their agencies have learned that the course of healthcare they still can rely on qualitative research, but only to eliminate ineffectual ideas and then improve on the remaining concepts. They use quantitative research to worldwide.” isolate the single most memorable concept to use in delivering a specific brand SANDER A. FLAUM, message. This has been a huge success. In fact, the increasing reliance on quantita- MANAGING PARTNER OF tive advertising research is one of the reasons that creative has gotten so much bet- FLAUM PARTNERS ter over the past 25 years.

Q:What’s different about launching a product today? The access issue has had wide- spread impact on key decisions made throughout launch planning. When deciding the order of indications to launch, for example, there may be tradeoffs between one indication with more market potential and another that addresses a less sat- isfied medical need in order to For Client Review Only. All Rights Reserved.get priority Advanstar review, Communications greater Inc. 2005 formulary acceptance, and pos- PAT PESANELLO IS CHIEF sibly a higher price point. Access KNOWLEDGE OFFICER AT may also impact acquisition or licensing decisions. BUSINESSEDGE SOLUTIONS Viewpoint

COLLABORATION Working As One Catherine Angell Sohn, PharmD, is by Tom Teal and David Maola senior vice president, worldwide business development and strategic alliances, GlaxoSmithKline Into the FemaleFor Client Review Only. All Rights Reserved. Advanstar Communications Inc. 2005 Future f avian flu had loomed as a global health threat 25 years ago, the public would have been in greater danger than it is today. by Catherine Angell Sohn The US Department of Health and Human Services awarded more than $1 billion to five drug manufacturers to pioneer f you walked into a pharmaceutical sales meet- innovative and faster approaches to vaccine development and ing in 1981, you’d have seen a sea of engaged, mass production—steps that would not have been possible 25 committed professionals, but few would have years ago. Conferences are being held. Best practices in science been female. In fact, 25 years ago, most sales are being shared across the industry—something that would not forces—and many other parts of the company— I Iwere made up almost exclusively of men. have happened then. Unlike today, when major pharma players Much has changed over the past 25 years. work in competitive collaboration, companies a quarter century Women have gone from entry-level positions to ago operated alone. Attacking a global health threat from a leadership roles. In few industries has this The Human united front just wasn’t an option. change been more visible and inspiring Genome Project The new attitude did not come easily. Ever mindful of than in pharmaceuticals. speaks to the scope antitrust and patent concerns and other legal matters, Today at GlaxoSmithKline (GSK), the of communication there was a general hesitation within the pharma sales force is more than half female. between industry, industry to communicate and discuss findings. The More than 200 women work at the vice mere suggestion of cross-company meetings raised president level and above. Most of academia, and eyebrows. It wasn’t until the early 1980s that the first GSK’s management teams include one government as we or more women. continue through forays into information sharing were made and a pro- At the 2006 Human Resource Planning the 21st century. fessional dialogue began. And slowly, industry leaders Society Global Conference, author Mary began to ask: “Is it possible to convey advances without O’Hara-Devereaux, said,“The future is female.”She losing the competitive edge, giving away trade secrets, and predicts that most new entrants to the US workforce compromising reputations?” A cautious affirmative to that will be women and people of color; we’ll see more question emerged. Slowly, the industry’s collective attitude began traditional male careers dominated increasingly by to shift as it learned that sharing highly selective information women; and “second middle age” women will could be in the best interest of all parties. become preferred workers at companies. At about the same time, informatics and statistics were becoming O’Hara-Devereaux suggests that corporate part of the required curriculum at medical schools. Such knowledge leaders prepare for this trend by designing women-friendly workplaces, at all levels. She would prove critical to the train- David Maola ing of future researchers who advocates havingFor strong Client women-oriented Review succes- Only. All Rights Reserved.(left) Advanstar is executive CommunicationsTom Teal Inc. 2005 sion plans.And she recommends creating evi- director of the is the former would be involved with clinical Drug Information editor of Drug trials, and was a necessary step dence-based strategies to attract young women as Information Journal employees. So, while women have achieved much Association toward facilitating open scientific over the past 25 years, the best is yet to come. communication. PHARMACEUTICAL EXECUTIVE 143

In the 1990s, technology transformed of the past quarter-century. Not only was world health crisis catalyzed a demand the world. From the growth of the the Human Genome Project an exemplar for increasing transparency and eventu- Internet to the advent of new tools for of technology’s capacity to facilitate col- ally led to agendas, such as FDA’s storing and accessing data, corporate laboration and spark dramatic discover- Critical Path Initiative, to help address communications would never be the ies, but the unprecedented scale of the and resolve some of the most pressing same. For the pharmaceutical industry, project, involving hundreds of scientists scientific hurdles. e-mail alone revolutionized the way col- from around the world, also speaks to However, while important progress leagues worked with counterparts the scope of communication between clearly has been made, significant chal- around the globe. industry, academia, and government as lenges and opportunities remain. Further Revolutionary biotech companies we continue through the 21st century. harmonization and coordination between had ideas and intellect to spare, but no The information age has closed gaps key regulatory and health organizations is capacity to market products, which led caused by distance and culture, and the critical. And dialogue with payers, health- to new types of partnerships with the pharma industry is no exception, embrac- care management organizations, insurers, pharmaceutical industry. The advent of ing its emerging geographies accordingly. and providers, as well as patients, must contract research organizations (CROs) The timely creation of the International continue and advance to address the ris- in the clinical-trials process created yet Conference on Harmonization in 1990 ing costs of healthcare. more need and opportunity for synergy and the European Medicines Agency five As it has done several times in past between science and medicine. years later sped the growth of the indus- decades, the industry must evolve and Collectively, these changes have has- try’s worldwide network and illustrated adapt to advances in science, methodol- tened every aspect of the drug develop- both the necessity and importance of ogy, and regulation, and changes in the ment process, from R&D to clinical cooperation. business environment. While there are trials to market research, enabling major Another major force in catalyzing still many hurdles to clear, it is apparent medical breakthroughs, such as the suc- the industry to improve communication that the pharma world is tremendously cessful completion of the Human was the AIDS crisis and the vigilant con- resilient and has the motivation, the Genome Project—which many regard as sumer advocates it created. The societal tools, and the practical experience to do one of the top scientific accomplishments pressure for pharma to focus on a major what has to be done—together. PHARMACEUTICAL EXECUTIVE 144 Viewpoint AUGUST 2006 www.pharmexec.com

PROMOTION Q: Is industry becoming more Disco Days Are Over aggressive with by Charlene Prounis its promotion?

n 1981, the happy-go-lucky sensi- overlaid with an actual piece of sandpa- bility of the disco era was waning, per that prompted viewers to understand but in the pharmaceutical industry, “what arthritis feels like” by having them the communications discipline touch the sandpaper. hadn’t even begun to heat up. With Feldene became Pfizer’s first block- about 35,000 sales reps calling on buster. Even so, the era of relying solely physicians, access in the 1980s was on journal ads was coming to an end, Ieasy, characterized by six- or eight- and Pfizer and its competitors were look- Lou Morris: Over the past few minute details consisting of well-pre- ing for new ways to reach audiences. years, there has been an abrupt pared messages delivered by reps. decrease—about 75 percent—in the Companies Forsupported Client those Review efforts Only. AllEducation Rights MakesReserved. an Entrance Advanstar Communicationsnumber of Inc. enforcement 2005 letters sent by with desktop media, patient-record By the mid-to-late 1980s, the quest for FDA. But we cannot simply count the forms, and direct mail. blockbuster status led to more sales number of FDA warning letters to gauge During this period, several new reps in the field, with more women and the extent of the aggressiveness of industry’s promotion.After all, the issuance of drugs were coming to the market, and healthcare professionals joining the a warning letter is based on more than the medical community was particularly ranks. It was also the era of “me-too” just the marketing environment. excited about new cardiovascular drugs, especially cardiovascular thera- FDA has always sought to prevent drugs—such as Stuart’s Tenormin peutics, with Pravachol (pravastatin) misleading information from reaching the (atenolol) and Marion Merell Dow’s and Zocor (simvastatin) coming to public.As such, the Division of Drug Cardizem (diltiazem)—antibiotics, and market less than five years after Merck’s Marketing,Advertising, and Commun- anti-arthritics, like Pfizer’s Feldene Mevacor (lovastatin), which launched ications (DDMAC), the FDA division (piroxicam). The preferred medium to in 1987. These crowded markets responsible for regulating promotion, generate awareness was journal adver- required novel communications strate- started “requesting” to preview launch tising. But, for the most part, profes- gies that would differentiate their prod- campaigns—a practice that is now rou- sional ads were somewhat staid. It was ucts. For many companies, the answer tine. But FDA confused matters by calling into that space that Pfizer launched in lay in education, and by the mid-1980s, the reviews “voluntary.”In fact, compa- 1982 an ad for Feldene that created some medical education companies started to nies are required to submit DTC cam- attention. The ad depicted a kneecap sprout up, often CONTINUED ON PAGE 146 paigns for review; it’s up to FDA whether it decides to look at them. Charlene Most FDA correspondence regarding Prounis is promotion takes the form of advisory president of opinion letters, based on review of the Flashpoint Medica materials prior to dissemination.Thus, the agency’s input comes before the public ever views the materials. However, 25 to 50 percent of the enforcement letters DDMAC does send address DTC promotion, even though the industry spends less than 15 percent of its promotional budget on DTC. Karen Katen, vice chairman of Pfizer, says DTC is likely to keep taking hits from negative public reactions to pharma (e.g., the fallout Lou Morris is For Client Review Only. All Rights Reserved. Advanstar Communicationspresident Inc. of 2005from Vioxx), Louis A. Morris & because it is the Associates, and most visible aspect former director of the industry’s of DDMAC marketing. PHARMACEUTICAL EXECUTIVE 146 Viewpoint AUGUST 2006 www.pharmexec.com

PROUNIS CONTINUED concentrated in close proximity to their industry clients, to support dinner meetings, resort-based weekend meetings, and other events, which were all designed to influence prescribing practices. Between 1985 and 1990, while the sales force grew, the amount of written materials also increased dramatically, with product messaging becoming more detailed, nuanced, and comprehensive, as new agents changed the treatment-of- care paradigm. Marketing budgets bal- looned as companies sought to gain share of voice and bolster brand identity by unleashing creative energy into new Journal ads for types of media. Feldene, Pfizer’s first blockbuster, used Determined New Restraint on Legendary Excess sandpaper to show By the earlyFor 1990s, Client consultants Review were Only. Allhow Rights a “patient’s Reserved. Advanstar CommunicationsPatient Inc. 2005 being paid to attend meetings—lavish joints often feel.” by Dennis Crowley events planned with painstaking detail and a sense of devil-may-care luxury. approach. Starting in the mid-to-late Exhibits featuring life-size dioramas, 1990s, market research designed to gain he saturation and complexity holographic imagery of key branding insight into physicians and consumers facing physicians, patients, messages, and amphitheatres covered in gained new areas of focus, such as psy- and pharma marketers is brand banners upped the ante as com- chographics, positioning studies, and mind boggling.Today’s mar- panies engaged in expensive promo- other types of qualitative research to keting environment, when tional wars. complement traditional quantitative comparedT with that of 25 years Then in 1994, in response to what research. ago, is the difference between many considered legendary excesses, This strategy proved effective, but stacking wooden blocks and con- the Office of Inspector General (OIG) sales reps faced new challenges— structing the Hoover Dam. issued a Special Fraud Alert, expressing namely, the saturation of doctors’ Over the last decade, patients concerns regarding promotion beyond offices. The number of reps had tripled have emerged as a viable target. typical advertising and education. In to 90,000, and details had diminished We have seen an increasing order to discourage activities that might to a mere 60 seconds. Amid all that, desire on the part of patients to undermine physicians’ obligation to companies started to feel like they were understand the treatment “provide treatments and recommend missing the point, with a new under- options, even in complex dis- products in the best interest of standing emerging about the lack of eases such as multiple sclerosis, patients,” paying consultants to attend compliance with medication. Parkinson’s disease, diabetes, meetings became unacceptable. Further Nonetheless, sales of drugs contin- oncology,and acute cardiac care. restrictions were implemented in 2003 ued to grow. And marketing profession- What’s important to remember is in the form of new OIG Guidance, als continue to search for brand success. that patients’ involvement in which defined inappropriate relation- Right now, one major key is finding the healthcare decision making will ships between physicians and industry, right media mix—deploying sales reps, not revert with a reduction in DTC specifically aimed at preventing bribes using CRM strategically, maximizing spending. Patients will continue and kickbacks. the reach of DTP and DTC education to seek the products they believe and advertising, and increasing reach to are most beneficial for them. So Qualitative Research Makes Its Mark other important targets, such as advo- while we struggle to wrap our Meanwhile, annual expenditures were cacy groups. However, as the main arms around the challenges of ballooning. In 1997, the industry’s pro- influencers (and certainly the channels) the physician marketing effort, we motion topped $9 billion. By 2000, a change, marketers will be tasked with also must recognize the addi- few years after FDA issued its DTC finding new ways that work for their tional complexities For Client Review Only. All Rights Reserved. Advanstar CommunicationsDennis Inc. 2005 broadcast-advertising guidelines, spend- brand, while building on the big ideas, Crowley is injected into this ing would increase 40 percent to $15 creativity, and customer insight that co-founder dynamic by of Brand billion. This more sophisticated media have become part of the healthcare Engineers increasingly deter- demanded a more sophisticated communications heritage. mined patients. PHARMACEUTICAL EXECUTIVE 147

REGULATION AND PRICING What’s different Discounts Get today? “Two out of three Complicated Americans by Joel Winterton and Stephen Zocchi who lack health insurance have at least one full-time worker For Client Review Only. All Rights Reserved. Advanstar Communications Inc.in 2005their immediate family. More than eight million ver the last 25 years, three semi- ment, calculation, processing, and sub- American nal events have redefined compa- mission of government price reporting children lack nies’ pricing and rebate strategies have evolved differently than expected. healthcare and decisions fundamentally: The rapid rise of SPAPs and state sup- » Passage of the Medicaid plemental rebating programs introduced coverage.” ORebate Law (OBRA ’90) access controls into the Medicaid and » Passage of the Veterans Health Care SPAP programs. Companies have borne Act of 1992 (VHCA ’92) the cost of these access-limiting pro- » Expansion of the State Pharmaceuti- grams, as the programs typically use pre- cal Assistance Programs (SPAP) and ferred drug lists to garner incremental Medicaid Supplemental Rebate rebates from manufacturers. The number Agreements (enabled by OBRA ’93). of rebate programs have tripled from The Medicaid Rebate Act estab- 2000 to 2005. With each new entrant, lished several key provisions for pattern compliance requirements for companies processes between companies, states, increase, while net profits associated with and the federal government. With that participation in state programs decreases. regulation, the industry was now sub- Now, two new programs further ject to standardized price reporting to complicate the mix. Medicare Part D the government on a quarterly basis, established a new price to report—aver- and calculation of per-unit rebates. age sales price—but it also blended pub- In 1992, the VHCA established mini- lic-sector reimbursements with industry mum discounts for federal customers, rebates to create the largest organized 340B (covered entity) pricing, and fur- US market for drugs. Second, the Deficit ther linked federal and state programs by Reduction Act of 2005 requires compa- tying 340B pricing to Medicaid discount nies to report average manufacturer levels and participation in the Federal price, among other things, to standard- Roba Whiteley Supply Schedule to ize Medicaid calculations. is executive director of Joel ForWinterton Client ReviewMedicaid participa-Only. All RightsTo Reserved. remain compliant Advanstar in this environ- Communications Inc.Together 2005 Rx Access, (left) is CEO of SET a program that links Enterprises, and tion. However, the ment, companies should link commer- the uninsured to Stephen Zocchi is regulations lacked cial pricing strategies with their impact patient assistance vice president of specificity—and still on government pricing and rebating programs marketing for Model N do—which explains programs to gain a full view of the why the manage- dynamics of price in the marketplace.