G. Steven Burrill
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In August 2012, FDA approved Zaltrap, a new therapeutic to treat colorectal cancer. What happened next says a lot about where
the pharmaceutical industry was in 2012 and what's ahead in the new year. Zaltrap, developed by Regeneron Pharmaceuticals
and Sanofi, essentially chokes off the blood supply to tumors. In the safety and efficacy nexus with FDA, it passed muster,
but for others concerned about questions of value, Zaltrap reflected what's wrong in healthcare today.
Critics of Zaltrap say the drug provides the same survival benefit as Genentech's Avastin when either drug is added to standard
chemotherapy. Like Zaltrap, Avastin is also used to inhibit angiogenesis in patients with colorectal cancer, but Zaltrap did
so at more than twice the price. At launch, Zaltrap was priced at an average of more than $11,000 per month for treatment
compared with about $5000 per month for Avastin. Concerned about the question of Zaltrap's value, Memorial Sloan-Kettering
Cancer Center decided not to give the drug to its patients.
In an October 2012 op-ed article in The New York Times, three physicians at Sloan-Kettering (two of whom have served as paid consultants to Genentech) say the decision should have
been a "no-brainer" (1). The exclusion of Zaltrap from Sloan-Kettering's formulary, though, didn't come easy, according to
the doctors. That's because, they say, the culture of medicine equates new with better. "Our refusal to adopt this remarkably
expensive therapy," they wrote, "risks being labeled 'rationing,' not 'rational'." Sanofi swiftly moved to cut the price of
its drug in half, according to a report in The Cancer Letter (2).
Today's pressures on drugmakers reflect greater pressures throughout the entire healthcare ecosystem as payers, patients,
and providers wrestle with the escalating cost of healthcare and push systems around the world away from cost-based to value-based.
For pharmaceutical companies, this reflects not only a growing pressure on pricing, but pressure from all quadrants of the
healthcare world to demonstrate the value their products provide to justify their costs. This new reality is altering the
life-sciences landscape and changing business models, development strategies, and funding opportunities for companies.
That pressure will only continue in the US, with the US Supreme Court leaving the Obama Administration's landmark healthcare
reform legislation largely intact. The re-election of President Obama and the preservation of a Democratic majority in the
Senate mean that efforts to repeal the legislation will be put to rest and the focus will shift to implementation of the law.
As of this writing, a fight in Washington over the impending fiscal cliff was under way. If not resolved before year end,
sequestration could trigger broad cuts to the federal budget that could have significant effects on the life-sciences industry.
Most notable would be cuts to the National Institutes of Health and FDA, even cutting into the 2012 reauthorization of fees
paid by industry to FDA under the Prescription Drug User Fee Act in exchange for timely reviews of products seeking marketing
approval.
