Sunday, July 01, 2007

Yet Another Species of Health Care Conflicts of Interest: Contract Research Organizations Which Invest in Biotechnology Companies

The St. Petersburg (Florida) Times has an interesting story about the relationships between contract research organizations (CROs) and biotechnology and pharmaceutical companies.

Like many startup businesses, Accentia BioPharmaceuticals of Tampa was long on dreams but short on cash.

It held the license to an experimental sinus drug that looked like a potential blockbuster. But the company needed serious bucks to get the product to market.

Accentia found an investor in PPD Inc., a company that specializes in running the studies that must be conducted before regulators can approve a drug.

A year after recruiting PPD as an investor, Accentia went looking for someone to run the all-important trials proving the safety and effectiveness of its sinus drug.

Guess who got the job.

Now PPD is not only the second-biggest investor in Accentia, it also is handling the final preapproval studies of Accentia's new drug, SinuNase.

If the PPD-run trials result in the drug being approved by the Food and Drug Administration, financially strapped Accentia will be on its way to tapping a billion-dollar market of folks with chronic sinusitis. And PPD will get 14 percent of the royalties.

Is that a conflict of interest?

The FDA doesn't think so.

The agency requires doctors to disclose any financial interest in drugs they are testing on patients, but it doesn't even gather such information from companies like PPD.

Charged with protecting the public, the FDA gets most of its drug approval budget from pharmaceutical companies. Increasingly, those companies have been foisting off the drudgery of running drug trials onto companies like PPD, which are called contract research organizations.

But now, instead of just being paid to conduct a study, some CROs are taking a stake in a trial's success. This does not concern the FDA's senior adviser for clinical science, Dr. David LePay.

'We assume CROs have a financial interest in the compounds they're testing,' he said.

As proof the system is working, LePay noted how rarely the government finds fraud in clinical trials: 'We only find it in 1 to 2 percent of inspections.'

Others say those numbers prove something altogether different: that the regulators' focus is on approving, not challenging clinical studies.

'The FDA does not have the resources to inspect all clinical trial sites or even a major fraction of them,' said Dr. David Ross, who was with the agency's drug review office for a decade. 'And if you don't look for fraud, you won't find it.'
We should note that Pharmaceutical Product Development Inc (PPDI) was the CRO that ran a very questionable trial of the drug Ketek (see our most recent post here).

It turns out that PPDI's involvement with Accentia is not an isolated occurrence.

Most preapproval drug testing used to be done in academic institutions, directly under the control of the drug companies. Now most trials are performed in regular doctors' offices around the globe, and contract research organizations handle a major chunk of the work. As hired hands for the pharmaceutical industry, last year the companies generated some $15-billion in revenue.

Head and shoulders above the competition in terms of size are PPD and its chief rival, Quintiles Transnational Inc. Together their more than 25, 000 employees oversee thousands of clinical trials in more than 50 countries.

The two companies have distinguished themselves by offering clients a particularly attractive feature: money.

PPD, with $1.3-billion in revenue last year, has made four investments, including the one with Accentia. Through these "compound partnering" alliances, PPD said that last year it reaped $94-million in related clinical trial business. The company declined to comment for this story.

Quintiles, with $2-billion in revenue last year, started investing in up-and-coming drugs in 1999. Last year the investment division, called NovaQuest, teamed with a giant $5.8-billion venture fund to give it access to additional capital to invest. To date, NovaQuest has committed $2-billion to dozens of partnerships, including 26 deals with small biotechs.

Not surprisingly, CRO executives think that they can have such relationships without generating conflicts of interest.

Ron Wooten, the 49-year-old president of NovaQuest, said his company deals with the same potential conflicts of interest a drug company has when it oversees trials of compounds it owns.

'You manage that conflict by having fire walls around all information and strict confidentiality across all functions,' he said. 'Nobody on my staff talks to operations about there being higher stakes in a program when we have an investment. That never happens.'

But not all agree.

Arthur Caplan, professor of bioethics at the University of Pennsylvania, said federal regulators need to pay more attention to contract research organizations. Even if they don't invest in a drug under review, the companies have an incentive to get patients enrolled and tests completed fast, he said. Timely, trouble-free trials are the ticket to the next contract.

'CROs stay in business by hitting the numbers,' Caplan said.

And when a trial monitor has a financial interest in a drug study's outcome, as PPD does with SinuNase: 'That's a big ethical no-no,' Caplan said. 'They should never be reviewing anything in which they have a direct financial interest.'


Dr. Marcia Angell, senior lecturer at Harvard Medical School, doesn't buy it. She said having drug companies or their proxies in charge of drug trials means the entire system is corrupt, 'from stem to stern.'

'It's a house of cards built on a fundamental conflict of interest,' said Angell, former editor of the New England Journal of Medicine and author of The Truth About the Drug Companies: How They Deceive Us and What to Do About It.

'The problem is that drug companies have inordinate influence over the evaluation of their own products. That, on the face of it, doesn't make sense.'

We have posted before about major problems with how CROs conduct research. Other than the story of how PPDI ran trials of Ketek, there were, for example, the disastrous trial of TGN 1412 run by Parexel International (see most recent blog post here), and the clinical trials by SFBC International (now Pharmanet) that infected multiple participants with tuberculosis (most recent blog post here).

The St Petersburg Times seems to have uncovered yet another species of conflict of interest affecting health care, and particularly affecting clinical research. In a way, this is akin to the conflicts that occur when academic researchers who are paid part time, usually as consultants or members of speakers' bureaus, by a given drug, biotechnology, or device company also conduct human research on that company's products. The concern is that their financial arrangements will influence how they design, carry out, and disseminate this research. The potential research biases induced by such arrangements ought to be clearly disclosed to the humans who volunteer to participate as research subjects.

Similarly, the potential research biases induced when a contract research organization has an ownership interest in the drug, biotechnology, or device company whose products it is supposedly dispassionately evaluating ought to be clearly disclosed to the human subjects of such research.

Finally, this is a reminder that patients and physicians ought to be highly skeptical about the results of clinical research carried out by people and organizations which may have financial relationships with the companies that produce the products their research is supposed to to evaluate.

And it is another reminder that for the good of research subjects, of clinical science, and of patients in general, we ought to consider how to make sure that all human research is done by people who do not have conflicts of interest, especially those that link the researchers to the manufacturers of the products or the providers of the services their research is meant to evaluate.

1 comment:

Anonymous said...

Innovation in Pharmacology in the form of Unbelievably Expensive Biopharmaceuticals

Beginning in the late 1970s, biopharmaceuticals were being researched for conceptual production in those places once called academic institutions, and conducted basic research to identify new product candidates and applied a great amount of research. The same protocol is applied with biopharmaceutical companies today as it was then.
The first biopharmaceutical ever was synthetic insulin called Humulin made by Genetech in 1982, that utilizing what is called rDNA technology, which also is used to produce human growth hormones. Later the rights were sold to Eli Lilly for this insulin.
Biopharmaceuticals are distant and covert relatives of big pharmaceuticals, whose products are typically small molecule and carbon based in their design. Due to the lack of innovation and creation of truly unique products, large pharmaceutical corporations in particular have become intimate with the innovative biopharmaceutical companies more often now than ever. In fact, large pharmaceutical companies often acquire biopharmaceutical companies. These large pharmaceuticals do this because of the unlikely possibility that biopharmaceuticals will have generic products with therapeutic equivalents for some time. In addition, biopharmaceutical companies have historically been and experienced accelerated growth that has proven to be quite lucrative for them.
How do these drugs differ from typical drugs that have been made before this advent of biopharmaceuticals? Unlike the small molecule, synthetic, carbon based pharmaceuticals of yesterday, biopharmaceuticals, classified under what is called Red biotechnology due to this being a medical process in the biotechnology world, essentially are larger and very complex modified proteins derived from living biological materials that vary depending on what medication will be manufactured and for what disease state. In fact, it is difficult to identify the clinically active component of a biopharmaceutical drug, which is why there is no pathway for generic copies of such drugs, as it would require expensive and meticulous clinical trial processes. Yet recently, a company called Insmed demonstrated bioequivalence to Amgen’s Nupogen that increases white blood cells. While there still is no defined pathway for follow-on biologics, this study demonstrated that another biologic drug can show that it is therapeutically equivalent. Insmed’s drug in this study will not be available for marketing until next year or later, though. Amgen recently had to pay a settlement to JNJ, who makes an identical drug called Procrit, for rebates and incentives Amgen was giving Oncologists for using Nupogen, and this will be addressed later.
Also, a transformed host cell is developed to synthesize this protein that is altered and then inserted into a selected cell line. The master cell banks, like fingerprints, are each unique and cannot be accurately duplicated, which is why there are no generic biopharmaceuticals as of yet, as there is no known process to create them. So the altered molecules are then cultured to produce the desired protein for the eventual biopharmaceutical product. These proteins are very complex and are manufactured from living organisms and material chosen for whatever biopharmaceutical that may be desired to be created. It is difficult to identify the clinically active component of biopharmaceutical drugs. So manufacturing biopharmaceuticals clearly is a different and innovative process, and a small manufacturing change could and has raised safety issues of a particular biopharmaceutical in the developing process. Also, it takes about 5 years to manufacture a biopharmaceutical. And each class has a different method of production and alteration of life forms to create what the company intends to develop. Yet overall, their development methods are rather effective.
Over 20 biopharmaceutical drugs were approved in 2005, I believe, and their growth tripled of what large pharmaceuticals experienced then. Also, just last year, biopharmaceutical companies made close to 80 billion in sales as well. Presently, over 20 biopharmaceutical products are blockbusters by definition. They are overall very effective treatments for what are viewed as very difficult diseases to manage. This is due to the fact that some pharmaceutical products target specific etiologies of these diseases, while limiting side effects because of the specific way in which such products work.
Unlike traditional medications that have been created in the same way for decades, biopharmaceutical companies seek through their research specific disease targets by genetic analysis and then search for a way to manipulate this target in a very specific way to provide superior treatment for such patients. Furthermore, these products are biologically synthesized and manipulated to maximize their efficacy while not crossing into a patient’s bloodstream.
There are about a dozen f different classes or mechanisms of action of biopharmaceuticals that have about a half of dozen different types of uses today. Often, Label alterations for additional disease states occurs often as well due to the progressive and novel effectiveness of biopharmaceuticals. Some of these drugs are catalysts for apoptosis of tumor cells. Others may cause angiogenesis to occur to block blood supply to the tumors of cancer patients. Then some biopharmaceuticals have multiple modes of action that benefit certain patient types and their diseases greatly, as with most biopharmaceutical products, the safety and efficacy is evident and reinforced with clinical data and eventual experience with the biopharmaceutical that is chosen to be utilized. And this clinical data is of a different method as well in comparison with what are traditional medications. For example, patients in the clinical trial involving a pharmaceutical are profiled, which allows better interpretation of this clinical data on their products.
Some biopharmaceuticals appear to be more noteworthy than others, such as Enbrel, which was originally created for the many forms of RA, which is a devastating form of arthritis that is caused by the patient’s own immune system attacking them to manifest this disease.
At one point, demand exceeded supply for Embrel, as the efficacy and safety was evident and unexpected by its manufacture. As a result of both doctors and affected patients seeking this drug, there were anticipated to be over 1000 patients on a waiting list for Enbrel for several weeks.
Enbrel was approved in 1998 and was developed from what are called monoclonal antibiodies, which is one of several ways in which biopharmaceuticals are produced. In fact, some call the 1990s overall the biopharmaceutical decade.
Partnering of biopharmaceutical companies and larger pharmaceutical companies began during this time as well, if not being acquired by large pharmaceutical companies. Needless to say, large corporate pharmaceutical companies have a very high affinity for potential blockbusters.
The country of Belgium provides the most biotech products to the biopharmaceutical companies in the United States, and the U.S. leads the world in regards to biopharmaceutical product creation- with more than 70 percent of both revenues and research and development expenditures in this country. Canada is ranked number two in this area, others have said.
Some biopharmaceutical drugs are more profitable than others as well. Biopharmaceuticals compose around 10 percent of the pharmaceutical market presently, I understand. And with the government health care programs who are the largest U.S. payers for pharmaceuticals, Medicare pays 80 percent of the cost of biopharmaceuticals, as many are administered in the doctor’s office.
One other controversial, yet profitable biopharmaceutical class is known as EPOs. The two that are available are actually identical, yet have different names of Procrit and Epogen. Both are indicated for anemia that is experienced in patients on dialysis or who have cancer in particular. Doctors are monetarily incentivized to exceed dosing requirements of these agents for their anemic patients. When this happens, it potentially causes premature deaths as well as accelerating the progression of cancer patients placed on one of these meds. Once this tactic was exposed, there are now limitations regarding the amounts authorized to be given to particular patients placed on these EPOs. They are in the class of hormone biopharmaceutical drugs, which is another type of several classes of biopharmaceuticals, and they reduce the need for blood transfusions as they increase RBC proliferation safely and effectively if dosed properly.
Another controversy involving biopharmaceuticals is that, while they overall are very efficacious and safe, the typical cost of biopharmaceuticals is rather unbelievable, as the cost approaches 10 thousand dollars a year for many of them. F urthermore, with cancer drugs, they are used together with chemotherapy for their treatment regimens, so others have argued the limite improvement in the quality of life of some patients on biopharmaceuticals, considering the devastating side effects of chemo treatment. Another criticism of biopharmaceuticals is that, with cancer patients in particular, they normally provide an extension of their life of only a few months.
Several years ago, I saw Roy Vagelos, former CEO of Merck Pharmaceuticals, and heard him speak to others at Washington University in St. Louis about his views on medicines. And during his presentation, he stated something similar regarding the cost of biopharmaceuticals and asked as well about whether or not the value related to the cost of biopharmaceuticals is truly clinically beneficial for such a brief life extension of cancer patients in particular, for the most part.
An issue or issues are always associated with new paradigms and innovations. Yet there are only a few biopharmaceuticals out of many available with debatable benefits with the high price tag. It ends up being what the market will bear for what their makers charge others. Yet the real question is the clinical evidence behind biopharmaceuticals: If a biopharmaceutical stops tumor progression without harming such patients is clearly both safe and effective.
Another difference with biopharmaceuticals is that they are also regulated by what is called The Public Service Act, and are involved in authorizing the marketing of biopharmaceuticals.
Safety protocols regarding biopharmaceuticals are a mystery to me as well. What is known is that biopharmaceuticals have the potential to discover therapies to treat the cause of a particular disease state instead of treating such a disease only symptomatically. They set out to solve unmet clinical needs by science that has yet to be proven. Biopharmaceuticals save, enhance, and extend the quality of life of patients with terrible diseases, and over 250 million people have benefited from their products.
Yet presently, few biopharmaceutical companies are actually profitable. Also, with biopharmaceuticals, some years are better than others from a revenue and market share growth point of view. Yet like any business, some years are better than others, and biopharmaceuticals are anticipated to offer quite a bit to public health in the future, with a focus on cancer patients in particular.
The cost of developing a biopharmaceutical exceeds a billion dollars, with about a third actually making it to market. The market size of biopharmaceuticals is rapidly approaching 100 billion dollars a year, with average annual growth between 10 and 20 percent.
With cancer biopharmaceuticals, between70and 80 percent of them are believed to be prescribed off-label, so it will be interesting on how these drugs will be used in such disease states now and in the future.
Regardless of the challenges and flaws that exist with biopharmaceuticals and their makers, I’m pleased to see the results and realization of true innovation in pharmacology by taking a different path of drug development. Furthermore, I believe others should behave in a similar manner and be inspired by the biopharmaceutical companies and what they have done and continue to do for the benefit of patients regarding the issue of innovation.
“The progressive development of man is vitally dependent on invention.” --- N. Tesla
Dan Abshear (what has been written is based upon information and belief)