Sunday, March 1, 2015

Some stories I want to critique

A couple of weeks ago I berated a New York Times story that purported to discern some fundamental problems in pharma when, in fact, their nut graph was at least five years old and their subsequent discussion of corrective actions by some companies was superficial and misleading. Pharma is that way; reality can be difficult to discern. As a result, nut graphs get hidden or don't stand up to scrutiny. The Inquirer had two examples this past Monday.

Some stories I want to critique

When I first started these weekly postings, my editor (who left the Inquirer last year) diligently sought to organize my prolix writing.

"What's the nut grab on this piece?" he asked.

I hesitated for a long moment, suspecting the possibility that I had stumbled into working with the Village People at the YMCA, so I asked him to clearly define the term.

"You know," he said, "the nut grab is the core of what you're saying, the news or the key explanation."

We both then quickly saw that the problem was not a difference of bawdy preferences, but rather a persistent shortcoming of telecommunications. People in the newspaper business refer to paragraphs as "graphs" and, on the telephone, graph came out sounding like grab.

A couple of weeks ago I berated a New York Times story that purported to discern some fundamental problems in pharma when, in fact, their nut graph was at least five years old and their subsequent discussion of corrective actions by some companies was superficial and misleading.

Pharma is that way; reality can be difficult to discern and, often as not, the determinative factors are counter-intuitive. As a result, nut graphs get hidden or don't stand up to scrutiny.

The Inquirer had two examples this past Monday. Alex Friedman wrote a useful article about KV Pharmaceuticals, a company with a checkered past, that received exclusive rights from the FDA to market a version of progesterone, 17P, that was previously available as a generic. The compound had been around since the 1950s at a cost ranging between $10 and $20 per dose. After the FDA gave KV monopoly rights, they raised the cost to $1,500 per dose. Since many women require up to 20 doses of 17P during a pregnancy to prevent premature delivery, the total cost to a patient and her insurance company can escalate from $300 to $30,000.

What Friedman neglected to make explicit was the FDA's well intentioned but naive reason for granting KV this monopoly. During most of its availability, local pharmacists across the country compounded 17P in their stores. This led to enormous variations in concentration and purity. The FDA reasoned that by restricting manufacturing to a regulated facility, patients could be assured of uniform quality.

The problem with the FDA's decision stems from the fact that contracting out elements of public health to private greed often results in an exclusive license to steal. Now here's where the proponents of competition may have something when they say that the cure for the evils of a private market doesn't consist of restricting competition with something such as a public utility, but rather in opening the situation to more competitors. The FDA could have accomplished its goal of insuring uniform standards for 17P by granting licenses to three or four generic houses.

But let's not be too hard on Friedman here. His byline states that he is a physician in training and the communication approach inculcated in medicine is one that encourages ambiguity, omission, and plausible deniability.

In the same issue, Mike Armstrong wrote an interesting article about AltheRx, a small, local, pharma currently developing solubegron, a compound for overactive bladder that GlaxoSmithKline (GSK) abandoned after completing Phase 2 clinical trials on it.

What Armstrong neglected was any discussion of why GSK stopped working on solubegron. Contrary to common speculation, the compound did not substantially fail to treat overactive bladder or create insurmountable side effects. Instead forecasters at GSK concluded that peak global sales of the product would likely fall below their minimum threshold. If a $98 billion company launches what amounts to a small product, relative to their equity base, it represents a diseconomy of scale for them. Their high fixed costs and huge equity require blockbusters, and so small products that may be worthwhile get abandoned.

Another key point that Armstrong chose not to discuss concerns why Big Pharmas typically decline to sell their abandoned compounds to small startups. We actually studied that question a few years ago and we found that the major reason such sales rarely occur is that C-suite officers at the Big Pharmas want to cover their rear ends. They fear that if they sell off a compound to a small company that winds up generating major revenues with it, either the shareholders would call for their heads or, more plausibly, their outsized egos will take a hit. Instead it appears much easier to simply bury the thing.

To check out more Check Up items go to www.philly.com/checkup.

About this blog

Check Up covers regional health news and a wide array of healthcare topics from pharmaceutical happenings to patient safety. Read about some of our bloggers here.

Portions of this blog may also be found in the Inquirer's Sunday Health Section.

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