Hits and Misses

An analysis of pharma deals shows certain types are better predictors of success than others.

DANIEL S. LEVINE
The Journal Of Life Sciences

Michael Lewis’ Moneyball showed that major league baseball teams often focus on the wrong stats or rely too much on subjective measures in deciding what ballplayers would be valuable to have on their team. A guy who can belt one out of the park may seem a lot sexier than a selective hitter who walks a lot, but is he a better value?

A new study from the consulting firm Accenture tries to bring a little Billy Beane wisdom to pharmaceutical deal making. It pores over pharmaceutical deals to see whether there are good indicators of what will boost shareholder value and the likelihood that a drug acquired, licensed, or collaborated upon results in U.S. Food and Drug Administration approval.

The information is of no small consequence. Pharmaceutical companies have been aggressively making deals to fill gaps in their pipelines and combat lost revenue from competition from generics. But few studies have looked at what kinds of deals actually increase shareholder value or lead to approved products.

Some consultants have in recent years produced reports that suggested that in a period where there is great pressure to do deals, the most successful companies would be the ones able to buy a particular asset or company and move quickly to absorb it. By contrast, collaborations were seen as less attractive because of the complexity of such arrangements and the high cost of managing the relationship through the entire life of the deal. But Accenture’s new report “Making the Right Bets” finds collaborative deals actually have greater success at raising shareholder value (the change in price from five days prior to the deal’s announcement to five days after) and a greater chance of leading to an FDA approval.

“If a company wants to hold on to an asset, that suggests they have confidence in the asset—sure, but that’s not the way deals have been playing out in the past,” said Elizabeth Coulton, partner with the products strategy practice of Accenture in Atlanta. “It’s the moneyball analogy.”

Coulton points out that baseball scouts used to think that players who get walks weren’t valuable, but now with moneyball, the baseball establishment is coming to realize that people who walk a lot are some of the most valuable in players in the league.

“That’s the same way we’re seeing deals play out in the study,” she said. “More collaborative deals are more successful with respect to shareholder value and FDA approval.”

Accenture began by looking at more than 18,000 deals between 1997 and 2006. It then pared that list down to 355 by eliminating deals where the phase of development was ambiguous, the compounds were destined for commercialization in non-U.S. markets, the drugs involved were already approved, or the deals were for manufacturing or contract research organization services.

There were other surprises. The study showed that while the market does reward shareholders for deals struck in phase III, the greater the market response to a deal, the less likely the drug involved will win FDA approval.

“The truth is that the market reaction for phase III deals is inconsistent with the probability of success with the FDA,” said Coulton. “With phase II, the greater shareholder return, the greater the probability of success with the FDA.”

Coulton thinks the reason for that is that phase II deals were more likely than phase III deals to be collaborations.

Overall, Accenture found that the market rewards buyers of phase I and phase III drug deals, collaborations, and small molecule deals. With in disease areas, the market rewards phase I blood and oncology deals, and phase II and III allergy, pain and infection drug deals. It penalizes the buyer for simple licensing deals.

For sellers, the market rewards deals involving biologic molecules. The market is penalizing companies for sales of phase I and phase II allergy, pain and infection drugs, as well as blood and oncology drugs. It also penalizes sellers of phase I kidney, liver, and metabolic disease drugs.

Other findings were not considered statistically significant.

“For pharmaceutical companies now looking to fill revenue gaps in the near-term and pipeline gaps perpetually,” Coulton said, “this study—an analytical approach—can inform the types of deals companies are looking to do rather than relying on their deal scouting teams and their due diligence.”

Dishonor Roll

U.S. health system’s grade knocked down to a D.

BY ERIC WAHLGREN
The Journal Of Life Sciences

Whether it’s John or Barack, we’ll have our work cut out for us when it comes to fixing healthcare.

A new study from The Commonwealth Fund, a foundation focused on improving healthcare access, quality, and efficiency, downgrades the U.S. health system to a score of 65 out of 100. That compares to a 67 in 2006. At the public high school I attended at least, such results would be akin to slipping from a “D+” to “D” student—not exactly the kind of performance we want from the odd medical conglomerate we’ve built over the years to keep us alive and healthy.

The study compares national averages in five dimensions—healthcare outcomes, quality, access, efficiency, and equity—with U.S. and international performance benchmarks. Of greatest concern, says The Commonwealth Fund, is that access to health care has “significantly declined” in the last few years. As of 2007, some 42 percent of American adults (75 million adults) were either uninsured or underinsured during the year, up from 35 percent in 2003. “Overall, [the study] finds the U.S. is losing ground in providing access to care and has uneven healthcare quality,” group says.

Indeed, the report really makes the system out to be a real loser. The U.S. now is last out of 19 countries, after France, Japan, Ireland, and Portugal, among others, in terms of mortality that could be prevented through timely and effective healthcare. Two years ago, it was 15 on the list. That’s of course despite the fact that the U.S. is the world’s drunken sailor when it comes to healthcare spending, forking out twice per capita what other major industrialized countries spend on healthcare, according to the report.

Part of the explanation for the spending paradox is that the U.S. system gets an “F” (53) for efficiency when evaluated for the number of avoidable hospitalizations, the low use of information technology, and other factors. In the U.S., patients were up to four times more likely to have duplicate tests or medical records than in other countries. “The U.S. currently under-invests in the capacity of the health system to innovate and improve,” The Commonwealth Fund says.

There are a few brighter spots. The rates of control of high blood pressure among American adults increased to 41 percent in 2003-2004 from 31 percent in 1999-2000, according to the report. Control rates for diabetes rose to 88 percent from 79 percent in the same period, the group said.

Despite all the study’s doom and gloom, the U.S. remains a remarkable place for medical talent and innovation. Even if the system as a whole is a mess, the individual institutions and medical professionals that make up the system are often the envy of the world. What the system urgently needs, The Commonwealth Fund says, is national leadership “to yield greater value for the resources devoted to healthcare.” But with a war, mortgage crisis, global warming, and creeping inflation among the other problems facing whoever is the next president, helping healthcare get its grades up will be no cinch.

Whether The Couric Effect Is Real, It’s Not Enough

CDC says despite improvements colorectal cancer screening rate remain too low.

DANIEL S. LEVINE
The Journal of Life Sciences

I am not a regular viewer of morning television, but circumstances were such that early one day in March 2000, I watched Katie Couric get a colonoscopy on the Today show. Perhaps it is chance viewings like this that explains why I am not a regular viewer of morning television.

Couric, who lost her 42-year-old husband Jay Monahan to colon cancer, was a woman with a cause. She apparently was so successful at raising awareness about the importance of getting screened for colon cancer that researchers dubbed the 20 percent increase in colonoscopy rates in the months that followed the broadcast “The Katie Couric effect.”

But that clearly has not been enough. Researchers at The Centers for Disease Control and Prevention report in the July 2008 issue of the journal Cancer Epidemiology, Biomarkers and Prevention that only about half of U.S. men and women 50 and older receive the recommended tests. The CDC conducted a National Health Interview Survey in 2005. Although this was an improvement over the 43 percent of screened individuals reported in 2000, it is still far from optimal, researchers said.

CDC epidemiologist Jean Shapiro believes a major problem is insurance coverage. Among people without health insurance, researchers found the rate of colorectal cancer screening was 24.1 percent, compared to more than 50 percent of insured Americans, depending on the type of insurance. Among patients without a usual source of health care, the screening rate was 24.7 percent compared to 51.9 percent of patients with a usual source of healthcare.

“If we can increase the number of people who have health care coverage, we should be able to increase colorectal cancer screening rates,” said Shapiro.

As for the Katie Couric effect, Shapiro says the increase in colorectal cancer screening rates observed from 2000 to 2005 may have been due in part to increased media coverage of the importance of colonoscopy. However, Shapiro adds, the increase was probably also due to the fact that in 2001, Medicare expanded its coverage for colonoscopy screenings to a wider range of patients.

Holy Heatstroke!

Study finds 80 percent of sunscreens don’t really work.

ERIC WAHLGREN
The Journal of Life Sciences

As a kid, I was always out in the sun a lot because I was on swim and water polo teams. Thanks to my Swedish and Irish genes, I never really tanned—I just burned. But in my crowd, putting sunscreen on was for wimps, so I usually went without the stuff and suffered the consequences.

I’ve wizened up in my old age. Nowadays, I don’t give a hoot if I look like a snowman on the beach after applying multiple layers of SPF 40. Even when I suit up to go to the office, I coat my face with a moisturizer containing SPF 15. So a recent study that finds the majority of sunscreens aren’t doing their job of protecting us from the sun had me shuddering under my beach towel.

The non-profit environmental research firm Environmental Working Group in Washington, D.C. investigated 952 name-brand sunscreens, finding four out of five don’t provide adequate protection from the sun. What’s more, these 80 percent contain ingredients with “significant” safety concerns, according to the group’s report.

On a recent vacation to Hawaii, I packed my bags filled with Coppertone SPORT. Turns out, none of the No. 1 sunscreen maker’s 41 sunscreens products meets Environmental Working Group’s criteria for safety and effectiveness. And the group recommends only one of 103 sunscreens made by No. 2 Banana Boat and No. 3 Neutrogena.

Environmental Working Group says its assessment is based on “detailed review of hundreds of scientific studies, industry models of sunscreen efficacy, and toxicity and regulation information housed in nearly 60 government, academic and industry databases.”

One of the main problems, according to the report? Many products lack protection against UVA radiation—the deeply penetrating sun rays linked to skin damage and aging, as well as, potentially, skin cancer. Most just shield us from UVB radiation, which causes sunburn, a well-known skin cancer precursor. The other main worry: the group says many sunscreens—especially spray and powder ones—contain nano-scale ingredients that raise concerns because of potentially harmful properties. Environmental Working Group says ones that contain nano-scale zinc oxide and titanium dioxide are safe.

With all this to fret about, I checked the list to see where my face goo—Kiehl’s Ultra Facial Moisturizer, SPF15—that I pay a pretty penny for stood in the rankings. Number 392. On a scale of one to 10 with 10 being the highest hazard, it got an overall score of five, classifying it as a “moderate hazard.”

Now for the good news: the report identified 143 products it says have good protection and ingredients with few health risks. Even better for cheapskates like me, some of the recommended common brands include CVS and Walgreens.

The group places a lot of the blame for the cloudy sunscreen situation on the U.S. Food and Drug Administration. The regulatory body needs to finalize its sunscreen safety standards—it hasn’t done so despite 30 years of debate, Environmental Working Group says. It also needs to approve new sunscreen chemicals—some of which have been under review for more than a decade, the group says. The FDA has approved 17 sunscreen chemicals in the U.S. vs. 29 approved by the European Union, according to the report. Yet more incentive to go to Sardinia for your next beach vacation.

From Information Superhighway to Mean Streets

Report finds anyone can obtain dangerous and addictive prescription drugs with the click of a mouse.

DANIEL S. LEVINE

If nothing else, the Internet is convenient. Whether it’s buying a book, booking a flight, or apparently scoring some OxyContin.

A new report from The National Center on Addiction and Substance Abuse at Columbia University reports that while the number of websites advertising or selling controlled prescription drugs in the past year dropped, 85 percent of websites selling drugs do not require a prescription.

The report "You've Got Drugs!" V: Prescription Drug Pushers on the Internet, is the fifth annual white paper on the subject from the center. It found a total of 365 Web sites advertising or selling controlled prescription drugs in the first quarter of 2008 compared to 581 sites during the same period in 2007. Only two of the 365 sites were certified by the National Association of Boards of Pharmacy as Verified Internet Pharmacy Practice Sites, the same number found certified in 2007.

The center speculated that the decline in the number of sites selling or advertising controlled prescription drugs may reflect efforts of federal and state agencies and financial institutions to crack down on Internet drug trafficking. But the decline offered little solace to the group.

“Anyone of any age can obtain dangerous and addictive prescription drugs with the click of a mouse,” said Joseph Califano, Jr., the center’s chairman and president. “This problem is not going away.”

The report identified an emerging practice of Internet sites selling prescriptions for controlled drugs that can be filled at local pharmacies. The report also found sites selling online medical consultations, which enable Internet users to get controlled drugs online without a proper prescription.

Of those sites not requiring prescriptions, 42 percent explicitly stated that no prescription was needed, 45 percent offered an online consultation, and 13 percent made no mention of a prescription. Of the few sites that require prescriptions, the center said half permit the prescription to be faxed, which allows significant opportunity for fraud because it could be faxed to multiple sites.

Benzodiazepines (like Xanax and Valium) continue to be the most frequently offered drugs for sale with 90 percent of sites selling them. That was followed by opioids (like Vicodin and OxyContin), which were available at 57 percent of sites, and stimulants (like Ritalin and Adderall) , which were sold at 27 percent of sites.

According to Drug Enforcement Agency estimates, in 2007 11 percent of prescriptions filled by traditional pharmacies were for controlled substances compared to 80 percent of prescriptions filled by Internet pharmacies.

In April, the U.S. Senate passed The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 to control Internet trafficking of controlled prescription drugs. The legislation would prohibit delivery, distribution or dispensing of controlled substances over the Internet without a prescription issued by a practitioner who has conducted at least one in-person medical evaluation, and to require federal certification of online pharmacies.

The center is urging the House to follow suit. The Subcommittee on Crime, Terrorism and Homeland Security of the House Judiciary Committee held a hearing on the topic last month.

We’ve seen what the Internet has done to independent booksellers, travel agents and newspapers. Are neighborhood drug dealers next?