PHARMA: Pain Therapeutics update


Wacky trading indeed in Pain Therapeutics stock Thursday.  As faithful THCB readers know I’ve been in this stock for some time. They have two parallel phase 3s on the first of their potentially huge drugs– Oxytrex, a replacement for Oxycontin.  In the phase 2 Oxytrex  did better on pain control than generic oxycontin (oxycodone).  In the phase 3 it did only as well (or slightly better depending on how you interpret it) BUT it showed lower side effects. The stock would obviously have been much better today if it had done better on pain (the primary end point) and on the news the stock sold off from $6 down to about $5.20.  But over the course of the day people started looking at the side-effects — particularly proxies for addiction — and the stock came back to where it started.


Of course oxycodone is already pretty good at dealing with pain, as any hillbilly heroin addict knows, so the FDA’s decision is probably as dependent on the side-effects as it is on the pain reduction effects of Oxytrex. In that way it’s an improved me-too. But many successful US drugs are improved me-toos (anyone for Lipitor?) and reducing the addictive properties of opiates would be  a substantial improvement in the real world of DEA crack-downs on doctors.

It’s the addiction story that has been the key all along, as the drug binds a molecule to the opiate that has shown it to be less addictive in rats. That’s hard to test in humans, but they got a finding which suggests that it’s working in this trial. If it does OK (i.e. no negative surprises) in the next phase III then I think they’ll get FDA approval at the end of the year.  I’m surprised that the stock hasn’t gone up alot more on this news — but even if it’s a moderately successful drug which gets 25% of the market for OxyContin (now $1.5bn), that’s revenues of 3-400m a year for a company with a market cap of less than 300m with 100m in cash.  That should translate to a market cap of $1-1.5bn or a stock price of 30-50.  So the market is confused, but I think the downside is low from here — and Pain Therapeutics has TWO more drugs in phase 3!

I still think this stock eventually will be a barn burner, but it  definitely would have been better for us poor shareholders had it shown better performance on the pain metric v oxycodone. Of course Oxycontin will come off patent soon and the revenue size of the market will fall, but Oxytrex looks like the logical replacement to me. I still think anyone who got some at 5.20 this morning will be very happy.  I have a bunch lower than that but I’ve been here since 1999 and I ain’t leaving yet!

PHARMA: The Industry Veteran on Polypharmacy in Psychiatry


Yesterday’s WSJ had an article on the increasing use of polypharmacy in psychiatric treatment of bi-polar disorder, depression and schizophrenia. It’s controversial because there have been no clinical trials to prove its value, and due to the nature of those conditions it can be hard to measure outcomes which in any case may vary dramatically between different patients. As the article is behind a firewall I’m going to quote somewhat liberally from it:

Psychiatrists are increasingly crafting drug cocktails of multiple medicines to treat depression, bipolar disorder and schizophrenia. The approach, called polypharmacy," aims to help people who don’t respond to a single drug by putting them on several drugs that target different brain chemicals. The approach — driven in part by the shortcomings of many available medications — is psychiatry’s answer to HIV/AIDS drug cocktails and combinations of cancer drugs. But there are some key differences. Unlike HIV and cancer — whose underlying cell biology is fairly well understood and that have been the subject of clinical trials involving drug combinations — the causes of mental illness remain largely a mystery. Little research has been done about how to administer polypharmacy or whether it even works in some cases. Multiple drugs also mean multiple side effects — and multiple prescription bills. Doctors arrive at the right mix by tinkering with a sequence of different drugs based on past experiences, word of mouth and drug-company marketing that informs them about the strengths and weaknesses of each drug.


Some psychiatrists question whether more drugs are necessarily better. Gabor Keitner, professor of Psychiatry and Human Behavior at Brown University in Providence, R.I., thinks polypharmacy has gone too far. Patients are plied for years with a dizzying sequence of drugs that have side effects ranging from insomnia to lack of libido to weight gain. "I think we are overmedicating people," he says. Dr. Keitner, who directs the inpatient mood-disorder clinic at Rhode Island Hospital, also worries that patients are getting the false hope that some magic combination of drugs will cure them. It may be better, Dr. Keitner says, to teach patients how to manage their conditions and emphasize continuing therapy. "This is leading us down a path that may not be good for patients or the profession," he says.

Still, for many, the cocktails provide long sought-after relief. Noreen Fraser, a 50-year-old mother of two from Los Angeles, was treated for depression with multiple drugs during her three-year battle with breast cancer. The powerful cancer drugs she took abruptly halted her body’s production of estrogen, sending the normally animated television producer into a deep depression. "I couldn’t even help my children with their homework," Ms. Fraser said. Her psychiatrist, Andy Leuchter of the UCLA Neuropsychiatric Institute, tried combining two antidepressants. That worked only for a while. Then last fall, Dr. Leuchter added a low dose of the antipsychotic medication, Zyprexa, into the mix. Within two days, Ms. Fraser felt better than she had in years. "It was like a cloud lifted," she said.


Using multiple drugs to treat mental illnesses has become controversial partly because of the cost involved — especially with schizophrenia. The standard therapy for schizophrenia today is the use of "atypical" antipsychotics, which have milder side effects than older drugs, but are relatively expensive. A month’s worth of Bristol-Myers Squibb Co.’s atypical antipsychotic Abilify, for instance, costs $352 whereas generic clozapine, an older drug, costs $152. If a schizophrenic patient doesn’t improve on one drug alone, doctors may add another atypical antipsychotic or one of the older "typical" drugs. In some states, public-health programs have balked at paying for combinations of psychiatric drugs without evidence that the treatment actually works.

Insight on how to use combinations of drugs to treat resistant cases of depression may be provided by a large government-funded trial just completed that tested various prescribing strategies. But results of the trial, conducted with 4,000 depressed people in 13 states, aren’t expected until May 2005.

Given his moderate and understated views on the medical profession and its relationship with pharma manufacturers, regular THCB readers may be surprised to know that Industry Veteran has his suspicions about the science and the marketing behind the new polypharmacy.

    1. The cocktail approach to therapy represents an emerging paradigm in psychiatry that a growing number of clinicians do not reserve as merely a last measure. At a recent meeting of the American Psychiatric Association, a clinical investigator gave me a synopsis of his thinking. "In neuropsychiatry," he explained, "since anything can cause anything, it’s wise to use everything for everything." In other words, throw as much s- – – on the wall as you can and see what sticks.
    2. Advocates of early cocktailing not only lack an understanding of the pharmacological basis for their polypharmacy regimens, some even disparage such basic science and consider it an after-thought or a fig leaf. At various times, cocktailing exponents have told me that medical science need not advance "in textbook fashion" by moving from basic scientific understanding to clinical applications. If a drug or a drug combination appears to offer clinical benefit, according to this worldview, then the bench science guys can retrofit a mechanism to provide a soothing rationale for the clinicians.
    3. More than a few colleagues have whispered to me their opinions that the cocktail approach in psychiatry represents a combined effort by psychiatrists and drug companies to grow their businesses. Entrepreneurial psychiatrists, frustrated by limited reimbursements and a median income that lags behind most of other specialties, promote cocktailing to create a niche for themselves as "medication specialists" (they actually use that term on their business cards). The drug companies subsidize this effort as a means of developing new, frequently off-label markets for their products.

It’s doubtlessly true that some desperate souls have received substantial benefits from psychiatric drug cocktails after failing to obtain relief from more conventional therapies. I am always suspicious, however, when bald-faced greed concocts a new therapy in an environment where no one guards the guardians.

An Open Letter to the New National Coordinator for Health IT – Untying HITECH’s Gordian Knot: Part 1


KibbeB&WjpgCongratulations to David Blumenthal on being named National Coordinator for Health Information  Technology (ONCHIT). Dr. Blumenthal will be the person most responsible for the rules and distribution of the American Recovery and Reinvestment Act’s (ARRA) nearly $20 billion allocation, referred to as HITECH, designated to support physician and hospital adoption of health information technologies that can improve care.

The job is fraught with difficulties, which Dr. Blumenthal has readily acknowledged. His recent New England Journal of Medicine (NEJM) Perspective, “Stimulating the Adoption of Health Information Technology,” is a concise, clear and honest appraisal of two of these challenges, namely how to interpret and act upon the key terms used in the legislation, “meaningful use” and “certified EHR technology.” Dr. Blumenthal gets to the heart of the matter by identifying the tasks on which the National Coordinator’s success will most depend, and which will foster the greatest controversy.

The country needs Dr. Blumenthal to succeed. The issues are complex and, with huge ideological and financial stakes involved, politically charged.

POLICY: WHCC-McLellan and Reinhardt


Now we’re getting into some meat. Mark McLellan head of CMS is on the same panel as Uwe Reinhardt. Bob Galvin from GE is the moderator. Two main issues are whether price controls work, and how we determine coverage…

Mclellan—Price controls aren’t working well in Medicare, and its no good just setting prices, as the level of the price doesn’t matter when you see massive differences in utilization

Uwe agrees. He thinks that at the moment we’re not ready for price controls. Pharm might force up prices using its political power, OR the Congress facing up to budget realities might price below marginal cost.

The audience here, not too surprisingly felt that there shouldn’t be price controls on pharma and medical products. (77% to 22%).

But now the harder question. How do we deal with coverage?

Ask the audience….If a new treatment extended life for 6 weeks, should it be covered 8%? Not Covered at all 22% or not covered but available for people to pay if they can afford it 68% 

Uwe says that he offered Manhattan Inst, and the WSJ Editorial Board the same choice.  They haven’t answered him, because they won’t put their name to it so far! Other countries do it the other way; it’s not covered, (I guess you can pay retail).

Mark says, those drugs are covered under part B in Medicare, and we’re going to move to performance….but essentially he can’t really answer the question. Uwe says that at some point there has to be a price for a life. In England a QALY is 50,000 GBP.

Question—How do we continue to encourage innovations in new technologies such as new equipment and devices and yet address the current irrational situation in which sales commissions and physician ‘incentives’ can and often do exceed equipment actual cost and physician payments for installing said devices?

Mark—At the moment we are paying for volume. We need to change the way that we pay like the Medicare demos to pay based on quality, and that changes incentives. Then you’ll see investment in EMR, and avoid the incentives that are a consequence of the payment system we have set up.

Uwe—one idea is to treat based on probability of paying for likelihood to getting sick over a life cycle. It doesn’t pay an insurer to invest money for long term pay-off. We need to think how that sort of health maintenance to be financed. At the moment Duke is trying it but no insurer is prepared to fund it.

Mark—need to learn more about the value of treatments when they’re on the market. As genomics comes down the track we’ll need to know more and more about this. To do that we need better data systems of real life clinical use.  Now we’re seeing some movement from private sector to find out more about that.

Uwe—that information must be publicly funded and supported; But at the moment there’s almost no government funding of that information in health services research. Doesn’t make sense for all private sector to reinvent the wheel. Government has to help fund this. Government has to spend more, especially on IT.

Mark—well we are spending “some” more. And there is some collective private (plans and employers) efforts on looking into this

Uwe—what have the private employers done?

Bob G—Not enough (and that from the head of this at GE!). We need to do more, but for some populations (the elderly) the government must do more….

Uwe—Mark, how can we get more money for IT? Who’s rear end do we have to kick?

Mark— most potential for supporting IT comes from those initiatives that pay for more lower cost of care. Want to identify what constitutes high value health care and paying more for it. That’s the best avenue. Most IT investment he sees is in software to maximize billing in Medicare. He wishes that there was relatively more put into clinical information systems.

Mark’s question to Uwe—What are we not thinking about? What’s new that we should be looking at?

Uwe—we need to make up what’s after this! You know there’s something after consumer care!  Perhaps the answer is figuring out via psychology how people make health care decisions. What do they use to judge those decisions

Mark—Now have some 20 measures in Medicare. But that might be a universe of hundreds of dimensions…how do we turn that into information that consumers can use….

Despite some obvious political differences with McLellan, he is a very, very polished presenter, and very bright. And Uwe is of course great…..at TCHB we ♥ him.


TECH: Manhattan on PHRs. by Erica Fishman with UPDATE from Matthew


Erika Fishman from Manhattan Research, who wrote the report that I mentioned yesterday in my piece on "PHRs, EMRs and pretty much useless surveys", is rightfully a little grumpy about her survey being called useless. She very kindly wrote a very detailed reply to the questions I asked her. Here’s her answer. I’ll be back with my response to it later today (when I have a couple of deadlines out the way), but note carefully her explanation of why surveys are different and how they produce different answers.

I’ve now moved this up to Friday (originally posted on Thursday) with my comments after Erika’s in bold italics

I read your blog “PHRs, EMRs and pretty much useless surveys.”  As you can imagine, I do not agree that these surveys are useless (and I believe our loyal client base of leading global health and pharmaceutical companies would agree with me on that point). Furthermore, I believe the basis for your comparison is not entirely sound (given difference in approach, questions, methodology and sample).

Erika is right to defend surveys in general (and not just because she, Mark Bard and the crew at Manhattan make their living off them). Surveys are very, very good at explaining what is going on in the trenches, rather than what "accepted wisdom" says about something, and much better than the anecdotes that actually "inform" our debate.They are also good at picking up shifts in consumer and business/organization behavior and thinking. However, they are less good at understanding consumers’ future intentions, as opposed to business people’s likely decisions. And yeah, calling them "useless" is blogger’s hyperbole — no well researched data is useless. I’ve sold (and bought) several surveys in the past and will in the future, so no arguments from me — even if clients aren’t always sure exactly what they’re buying them for, nor are the answers about what to do with the results always that obvious.  However, better than tossing money at management consultants I say!

As you know, methodology is critical to the validity of results. Our survey sample size included more than 4,000 adults and was conducted via random digit-dialed telephone methodology-– providing for a representative mix of online and offline consumers. The 2005 Markle study used a sample of 800 registered voters (each for the two-separate sub-studies)- introducing potential selection bias due to demographics of registered voters. Markle’s 2003 study was out of 1,246 online consumers who were solicited via email. Already those consumers are more tech savvy than the general population base we surveyed, especially since they are “interactive” by taking online surveys.

Erika’s point here is very important, and unfortunately gets completely lost in the way surveys are reported. When the press says "a survey said X or Y" no one ever bothers to check the exact language, let alone the methodology. I worked for IFTF and Harris for years tracking the growth of the Internet and health care users of it, and our data and Cyberdialogue’s data consistently disagreed. (Harris always showed more users) I never found out what their questions were and what the discrepancy resulted from, but I only ever had ONE person (the very smart Sam Karp at CHCF) ask me why they were different, even though plenty of companies were buying both surveys and the results were widely reported.

And the inside baseball discussion about online versus telephone surveys is so deep in the mire that I can’t believe you’re not already asleep reading this.  Suffice it to say that the online-only crowd has a ton of data about how their surveys correct for the online/offline distinction. And somehow the registered versus likely voter discussion from last year gets picked up in this mess too because of the choices made by Markle’s pollsters (probably because they were combining polling questions with some policy work)! One thing we do know is that very, very close elections (less than 2-3% differences) cannot get picked up by surveys which have built-in margins of error. And exit-polls (questions of fact) are more reliable than pre-election surveys (questions of intention), even if the voting machines or other disqualification techniques screw-over the connection to the end result (as in Ohio in 2004 and Florida 2000).

The additional point, and here Manhattan seems to have done a better job than Markle’s survey guys, the Republican-affiliated Public Opinion Strategies (and why Markle’s using them rather than a "neutral" firm is  a little curious), is that it’s very hard to determine a consumer’s intention to use something that they’ve never used before or even seen, as it depends (as I said in my last piece) on how well it’s marketed to them, and how it fits into their daily workflow.  Most consumers cannot say and can’t really imagine what technologies they will be using in the future — after all if we all knew the iPod was going to be a big deal we’d have invented it ourselves! So when they say that 15% of adults are likely to use a PHR my guess is that it could be 5% and it could be 30%, but it won’t be 60% (which is what Markle said).

I am also not keen on the comparison because there are different meanings behind the words used in each study. While Markle uses “favor” and “want”, our question asks: “How likely are you to use a place to access/update your personal medical records online? I may still favor personal health records but not be likely to use them. In fact, that is how I personally feel about PHRs currently.

To be fair to me, I was in my piece contrasting the difference in numbers between the two surveys (the 15% and the 60%) and suggesting that Manhattan’s much lower number was more likely to be right based on the slow take up of PHRs and people emailing their physician.  Of course I’m much more interested in the numbers people report of what they are  actually doing (and of doctors reporting of what technologies they are using) because you can then see if a trend is taking off or not.  And it seems that EMR/PHR trend is taking off much more slowly than optimists from a few years back (who included me) guessed.

Our press releases are not chock-full of data because we do not want people/companies taking the data and re-purposing it as their own-– a problem we encounter frequently. Instead, we prefer to invite interested parties for more controlled webinar and multimedia presentations.  Please let me know if you are interested in accessing the presentation for this module, and I will arrange it.

Here I must disagree a little. The important part of the survey data for a client is not the top-line stuff that Harris puts in their press releases, it’s in the tabs–the information sub-dividing the studied population by their attributes and their intended actions. And it’s in the advice from the survey company about what to do with that information. Of course Manhattan and all survey companies are struggling to get people to come back to buy their surveys, and they don’t want their data stolen and re-purposed by other companies without giving them credit (and money!), but there is something to be said for letting a little more of it get out there in order to stop observers like me being forced to read into the tea-leaves. It certainly doesn’t seem to have hurt Harris, who’s healthcare business is much bigger now than when I was there, and which is putting out great information in its newsletters and in its Wall Street Journal articles. I suspect what they’re gaining in publicity vastly exceeds the sales that they’re losing by clients on the margin.

The 7.6 million emailers would include you-– we ask: “Have you ever emailed with a physician office?”

The 29.8 million includes only consumers age 18 and older.

I still don’t understand, even given that the margin of error in a 4,000 person survey is relatively low, why they don’t just say "about 30 million."

Formerly, we asked consumers if they were interested in using personal health records, but we have changed it to likelihood to use. I do not think these are necessarily comparable questions.

And there is the bane of the surveyer’s life. You want a trend but you asked the slightly wrong question way back when, when you weren’t quite sure what you were asking about. Now you’ve changed the phrasing to get it right and blown your trend data. Not much you can do about this other than invent a time machine.

Another factor here is space (or time) on a survey. In the physician computing survey I did at Harris in 1999 & 2000 I skated around EMR use by asking about what technologies doctors used for certain functions. In future surveys (after I’d left) they changed all that detail to simply "Do you use an EMR?"– a simpler but much less helpful question.  Unless of course you know exactly what an EMR is and you’re sure that all doctors share your exact opinion. I suspect the change was made to fit in other questions, but it goes to show the complexity of what you have to juggle when you’re designing a survey — and, no, it’s not easy.

I do agree with you that consumers will not be using PHRs until they “get used to it,” as you put it. This is the main point of our Consumer Health Interactivity module. If consumers are not yet adopting online interactive tools and programs, PHRs will not be a reality for a long time. Furthermore, taking advantage of highly interactive features, such as email with a physician, can help prime consumers for future PHR use. In fact, our study reveals that consumers with chronic health conditions who are currently emailing with their physicians are 230% times as likely to be interested in transmitting personal health data online as online consumers with chronic conditions who have no interest in emailing with physicians.

The example of chronically ill emailers is a very juicy tidbit of information which is more likely to get me interested if I’m a prospective client, and it reveals that Manhattan (and Erika) understands that this is a much more complex consumer market than is suggested by some of the "80% of consumers say they like EMRs"-type surveys that we’ve seen.

I still maintain that surveys of what consumers actually do, which technologies doctors actually use, and what technologies health care organizations are actually installing, are the most helpful. Perhaps HHS agrees with me, as (apparently frustrated by the numerous surveys out there on health care IT use) they have commissioned a series of their own.  How knows if they’ll get that right, and I hope that they ask Manhattan, Harris and me for advice.

But I stand by my final point. Irrespective of what they think they may or may not do in the future, consumers will use PHRs if they are provided and marketed to them in a logical, constructive way that fits into their use of the health care system, and connects them with their providers. And unfortunately that depends on their providers having their patients data in a useful and complete format. That in turn suggests that something like the RHIO and complete inter-operability will be needed before the PHR becomes absolutely complete, and for that we’ll have to wait a while.

TECHNOLOGY: Drug-eluting stents take off–With late afternoon UPDATE


As this study from Solucient shows the take off in the use of drug-eluting stents has been very fast, even before Boston Scientific’s Taxus stent hits the market. USA today has a good general article about them too.

This puts hospitals in a real bind, as the cost of the new stents means that they’ll be losing money on their use, unless they can get an increase in DRG payments from CMS. So watch this space. But don’t forget that restenosis rates are real even for drug-eluting stents and that a recent Stanford study showed you were better off getting a by-pass over time.

UPDATE: The FDA today as expected approved the Taxus stent from Boston Scientific. The stock is up about 30% so far this year.

Can “consumerism” work in health care?


“Consumerism,” — free market, open competition – regardless of the term used to describe this market behavior, can the concept of “natural market forces” exist in health care?  It seems as though observers of the health care “market” fall into two distinct points of view:

POV 1:  Consumerism in health care is a train that has already left the station.POV 2:  Health care is different and true market forces can never prevail because the players’ roles are so polarizing, and the “buyer” and the “consumer” are so disconnected.

I suspect that for anyone reading this, you have already checked off your respective point of view. (While the merits of this topic are worth debating, ultimately, time and events will answer this question.)

In the meantime, let’s consider the following:

POLICY: Medicare Bill just gets past the house


And in a rare Saturday posting . . .

After some real hard core arm-twisting, (plus leaving the voting open for 3 hours), at 6am this morning the House passed the Medicare Bill 220-215. It looked like it was going down 218-216 for over 2 hours when finally the Republican leadership got 2 of their holdouts to cave (and then a couple more committed).  I suspect what they say about watching sausage and watching legislation being made applies here!

We should know about the Senate by Monday. My suspicion is that it has the straight up and down votes to win, so it’s a question of the filibuster being used.  Just as it was in the Energy Bill.

Obama vs. McCain on health care


Sen. Barack Obama’s attack on health insurance reforms proposed by Sen. John McCain shows that Obama’s not for real change in health insurance.

Obama wants more government-sponsored health insurance schemes, like
the VA health care system, Medicare and the unaffordable Medicaid scheme
that’s bankrupting the states and the Feds.

Obama wants to keep employers involved in the insurance markets,
even though they limit consumer choice, increase costs for consumers
and make their workers buy expensive policies they don’t want nor need.

TECH/BLOGS/OFF-TOPIC: Sorta happy ending?


Score one for the little guy/gal — Work widow’s blog fuels revolt and EA settles for what appears to be a decent amount. $15m more than they wanted to pay anyway!

The original posting that started it all is here. Don’t underestimate the power of an anonymous blogger.