Healthy Skepticism Library item: 10804

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Cohen F.
Medical Monopolies: Pfizer Insists On Exclusive Contracts
Seeking Alpha 2007 Jul 3
http://biz.yahoo.com/seekingalpha/070703/40064_id.html?.v=1

Full text:

Fredric Cohen (Pharma’s Cutting Edge) submits: It was bound to happen sooner rather than later, and Pfizer Inc. (NYSE: PFE – News) or GlaxoSmithKline (NYSE: GSK – News) was likely to be the first to do it: create exclusive contracts with investigators, I mean. That would be your best enrolling sites. Scared? You should be.

As reported by ClinPage from the annual DIA meeting two weeks ago, Pfizer’s Andy Lee let on that Pfizer has been signing exclusive deals with Pfizer’s best enrolling sites. Either the sites will contract for studies only with Pfizer, or they will not contract with Pfizer for any studies.

It takes chutzpah to make a move like that, but more than chutzpah it takes research volume, lots and lots of money devoted to clinical research. Without the money to keep a site at capacity, or on the sidelines getting paid to be at less then full capacity, no company can hope to craft such deals. Only the very largest research companies can afford this, and even the largest CROs will not be able to wrest a site from big pharma’s grip for the benefit of its more modestly sized clients. Talk about a game changing situation.

As I say, it wasn’t hard to predict this move, I’m only surprised that it’s been going on for a while, and I hadn’t heard about it. These things tend not to stay secret. Why am I not surprised? Because pharma development productivity, particularly in the later stages of clinical development, must improve to compensate for environmental pressures on sales and volume growth. It must, or the industry’s entire business model is in jeopardy, and I don’t see the industry allowing its model to collapse without a good fight.

Despite some propaganda to the contrary, the workflow inefficiencies constraining overall development productivity are not widely appreciated, and no company has demonstrated that it knows how to improve productivity, however it is (reasonably) defined. That said, it is likely that local operational inefficiencies, such as those confounding clinical study enrollment, are disrupting local process flows sufficiently to negatively affect cumulative study completion rate.

In other words, know one knows for sure, but it’s likely that decreasing the average time from protocol approval to final subject enrolled will ultimately decrease total development cycle time without diminishing the quality of development (i.e. the learning that accrues from doing studies), thus improving R&D productivity.

It’s also pretty clear that if you can find a way to contract with better performing (in terms of enrollment) sites more frequently, you are more likely to decrease this cycle time. As Pfizer’s Lee noted in his DIA appearance, and is generally appreciated now, some investigative sites consistently enroll better than others, and it’s believed that they do so without diminishing the quality of research. If you can lock these high-performing sites up, with exclusive contracts say, you’re more likely to increase enrollment speed than if you must compete for sites and risk losing high-performer to your competitors.

As far as I know, Pfizer is the first to try this all-or-none strategy. I think other firms will wait to see how it shakes out before following their lead. Although, as I say, exclusivity is the surest way of locking up the best performing sites, and it’s also probably the riskiest. A company the size of Pfizer doesn’t have to worry about not doing enough studies to keep a site busy – thereby wasting the premium it must pay to maintain exclusivity – but it does have to worry about frightening or angering the doctors who prescribe its drugs. It’s easy to imagine that an investigator or research institution might wish not to engage in an exclusive relationship with a single sponsor: Will it create a perception among patients, insurers, regulators, or professional associations that she is in the sponsor’s back pocket? Maybe such thinking is reasonable, especially for academic sites.

Harmful perceptions aside, I would imagine that many high-performing sites will find such strong-arm negotiating tactics ridiculous. After all, from the investigator’s perspective, it’s not as though research studies are hard to find. It’s a supplier’s (investigator’s) market in developed countries by all accounts. Why not hold out from such a deal, and let competition decide who gets the best sites? If supply remains regionally and situationally constrained, as it is presumed to be, investigator grant payments will continue to increase. Exclusive deals, unless very lucrative, will not benefit sites in these regions. And perhaps no amount of money will satisfy some sites’ need to work on the most promising medicines, regardless of who is developing them.

This enrollment strategy absolutely is worth keeping an eye on. If any investigators have signed such a deal with Pfizer or another firm, I’d love to hear from you.