Party Like Your Drug’s Going Generic
By Clare BlumerMay 31, 2013
The story behind a ritzy weekend on the Gold Coast, hosted by Wyeth Pharmaceuticals — the priciest event in The Global Mail’s Drug Money database.
At the tail end of summer, in February 2009, hundreds of psychiatrists and family doctors travelled to the Gold Coast, Queensland’s holiday hub, to attend a “medical education event” hosted by the Australian outpost of Wyeth Pharmaceuticals.
On the first evening, the doctors were welcomed with canapes and drinks. For the next two days they ate every meal together, to break up the weekend program on Pathways of Depression: Future Directions in Treatment.
Wyeth paid for all but a handful of the 441 doctors’ travel and their accommodation. It appears that only 18 doctors did not accept Wyeth’s offer of accommodation.
All up, this particular shindig cost Wyeth more than $1 million.
That’s $2,327 for each doctor or psychiatrist to receive twelve-and-a-half hours of Wyeth-spun education; or $186 per doctor, per hour.
This event stands out as the most expensive event in The Global Mail’s ‘The Great Pill Push’ — our database of 156,000 education events held by pharmaceutical companies — and it sheds some light on the investment Wyeth was making to market a newly approved drug.
The timing was crucial. The company had already had a successful run of its antidepressant Efexor (venlafaxine), a huge seller worldwide — but its patents were expiring.
“Efexor has been a bestselling antidepressant in Australia for a long, long time,” says psychopharmacologist and Sydney University Professor Iain McGregor. “It’s made a motza.”
Australian doctors wrote 2.8 million prescriptions for Efexor in 2009 — the year that Pathways of Depression event was held. This represents the peak of the drug’s sales curve in the local market; thereafter, the number of scripts that cycled through the PBS appears to have plateaued.
By the time of the Gold Coast weekend, Wyeth had pocketed $660 million in Australian government funds with the Pharmaceutical Benefits Scheme (PBS) in the decade from Efexor’s entry in 1999.
But generic pharmaceutical companies were pushing to get their versions of the drug on the market, which would immediately force down the price and the profit margin on Efexor.
With the glitzy Gold Coast as their backdrop, doctors and psychiatrists sipped on cocktails and mocktails while claims and cross claims were being drawn up in the federal courts that Wyeth was ‘evergreening’ Efexor in its more recent formulation as Efexor-XR (extended-release).
‘Evergreening’ is medical industry speak for companies’ attempts to prolong the revenue potential of a drug under patent, keeping the profit tree ‘green’ for a few more winters.
“When we give a patent, it’s for a particular period. And the contract, in being given a monopoly for that patent period, is that after that [period] the ‘knowledge’ in that patent enters the community and other firms can compete,” Dr Hazel Moir, Adjunct Associate Professor in the Research School of Social Sciences at the Australian National University, and author of the recently released Patent Policy and Innovation, told The Global Mail.
When the patents run out, other companies can produce it, and virtually overnight the competition from generic drug companies drives down the price the first drug company can charge.
At that point it becomes cheaper for everyone: patients who are prescribed it and taxpayers who fund the federal health budget through the PBS. (When a competing drug comes onto the market, the price charged via the PBS is reduced by 16 per cent.) The inventing companies understandably do everything they can to extend their patent-protected monopoly on drugs before experiencing that profit drop.
The weekend of Wyeth’s depression-education get-together, the company had cause for celebration. Its new antidepressant drug Pristiq (desvenlafaxine) had just been approved for subsidies on the PBS.
Wyeth Australia is now owned by Pfizer, so Pfizer now produces both Efexor-XR and Pristiq. Some Wyeth-branded companies still operate internationally but are also owned by Pfizer.
The Gold Coast meeting “focused on future direction in the treatment of major depressive disorder and clinically relevant treatment options, including examining the profile of the new antidepressant Pristiq,” Pfizer’s Australian communications manager told The Global Mail.
“[Pristiq] is so pharmacologically similar to Efexor which is now generically available that it isn’t funny,” says Professor McGregor.
Did you note the similarity in the names? Desvenlafaxine = Pristiq, the new drug. Venlafaxine = Efexor, the old drug.
This was not lost on Australian pharmacologists, pharmacists, nor policy hawk Hazel Moir.
The European Union also noticed the familial relationship of the two medications.
The European Medicines Agency (EMA), responsible for the scientific evaluation of medicines on the continent, provides this description of how the two drugs differ from each other:
“Desvenlafaxine is derived from venlafaxine [which has been] used as an antidepressant since the 1990s. The substance has been slightly modified with the aim of reducing side effects in patients who have problems breaking venlafaxine down.”
However, in October 2008, just months before the doctors attended the Pristiq event on the Gold Coast, Wyeth had withdrawn its application to market the same drug in Europe.
The pharmaceutical company did not publicise its reasons for not proceeding in Europe with desvenlafaxine (which was to be branded there as Ellefore), but this might explain it: in the review process, the EMA submitted questions to Wyeth, outlining its concerns.
Summing up the case on its website, the EMA report on the withdrawal of the marketing application notes that those concerns had been shared with Wyeth. The agency was of the “provisional opinion that ...Overall, the effectiveness of Ellefore (desvenlafaxine/Pristiq) had not been shown convincingly. In relation to its parent substance, venlafaxine, desvenlafaxine seemed to be less effective with no advantages in terms of safety and tolerability.” The information about its effectiveness was, the agency said, “insufficient” and “inconsistent”.
Wyeth’s response to EMA’s questions was to withdraw its application. The EMA was unwavering in its assessment: “At the time of the withdrawal … a benefit of Ellefore had not been sufficiently demonstrated and any benefits did not outweigh the identified risks.”
Pristiq, Ellefore, desvenlafaxine — all different names for the same drug — therefore remains off the market in Europe.
The Europeans are content with the drug that’s been on the market for over a decade and generically available: venlafaxine without the ‘des’.
BACK IN AUSTRALIA, Pristiq had been approved for Australian release, government subsidies, and marketing. Also, Wyeth had secured an injunction against other companies selling generic versions of ‘extended release’ parent-drug Efexor-XR.
After a series of court dates between 2008 and 2011 — and an injunction preventing generic versions of Efexor-XR going on the market while the cases were contested — Wyeth made a last-ditch effort to appeal to the High Court, after the Full Federal court invalidated its extension of the patent. The High Court refused the application in May 2012.
So ultimately the Australian courts rejected the validity of the extended Efexor patents, the generics were rushed to market, and the price dropped substantially.
But this was a good three years after the patent on the base compound had expired — including an injunction period from June 2009 to June 2011, during which no generic forms of the drug could enter the market.
This is especially significant as Wyeth had negotiated Pristiq’s inclusion on the PBS by pricing it slightly cheaper than Efexor-XR. If there were generic versions, this advantage might disappear.
In that period of time, however, the cost of Efexor-XR to the PBS amounted to more than $200 million, according to publicly available data . The figure was pointedly noted in a background paper submitted by the generic drug manufacturing company Alphapharm to IP Australia, the agency that administers the country’s patent and other intellectual property rights.
Alphapharm was among the three major generic drug manufacturers involved in the case against the patent extension for venlafaxine; all three are presently claiming damages from Wyeth through the federal court.
The federal government has made no attempt through the courts to claim the lost funds, even though a condition of the injunction was that Wyeth should compensate the PBS should its patent not stand.
But Senator Bill Heffernan, a Liberal from NSW, is among those pressing for action over the Efexor evergreening losses.
“I understand that Pfizer, the patent owner, gave an undertaking to the Federal Court that if the patent were invalidated it would cover the costs to the PBS during the course of the injunction,” Heffernan said, drilling officials from IP Australia during budget estimates hearings last May .
“Does IP Australia plan, in conjunction with other elements of the government, to recover the $150 million that has been overpaid to Pfizer as a result of the evergreening?”
IP Australia referred Heffernan to the Department of Health and Ageing, saying the decision to recover the funds lies with them.
There is some discrepancy between figures listed by Heffernan in May last year, and Alphapharm in February this year, but even at Hefferan’s smaller figure there are clearly millions of dollars at stake if the federal government pursues claims against Pfizer.
The evergreening of Efexor is regularly cited as an example of why reform is needed in the drug-patenting system — which is now under examination in IP Australia’s review of pharmaceutical patents .
Three panelists, led by former NSW Auditor-General Tony Harris, are tasked with examining if “the patent system is being used to extend pharmaceutical monopolies at the expense of new market evidence”.
The panel handed over the final report to the government in the last week of May.
JUST AS WYETH BEFORE IT, Pfizer promotes Pristiq as a liver-friendlier alternative to Efexor-XR, on the basis of its different metabolising process.
“[Wyeth and Pfizer] marketed it as being more liver-friendly than Efexor, but the vast majority of people that have been put on antidepressants don’t worry about their livers,” says Sydney University’s McGregor, whose research shows Australian prescription rates for antidepressants doubled in the decade since 2000.
“There’s a small market there of hepatitis sufferers where that is in an issue.
“But they’re kind of grasping at straws to try to find an angle to promote these medicines, because fundamentally [there hasn’t been] a paradigm shift or quality improvement on what’s already there and cheaply available as a generic.”
There are benefits to a drug that is kinder to the liver, especially in light of new evidence that the mentally ill have shorter lifespans; the researchers don’t attribute this just to the expected higher suicide rates, but rather to more incidences of chronic health conditions than the general populace.
A study published in BMJ (formerly known as British Medical Journal) in May this year used the Western Australian population and mental-health data to show that the life-expectancy gap has widened between those with mental illness and the general population, and that these deaths are due to physical conditions, not suicide.
Pfizer says that the two drugs have “similar pharmacological activity”, but that their different metabolic processes through the liver have “a number of potential clinical consequences”.
“These differences demonstrate the need for the appropriate education of prescribers, including education events such as Pathways of Depression: Future Directions in Treatment,” a spokeswoman for Pfizer told The Global Mail.
“Pfizer periodically sponsors doctors to attend medical education events,” she confirmed. Indeed it does. According to The Global Mail database, Pfizer reported $38 million spent on educational events over the five years the company was required to report on these functions. This does not include Wyeth’s spending before being acquired by Pfizer.
“These events are legitimate, transparent and ethical,” she says. “Their primary purpose is to enhance medical knowledge.”
Ray Moynihan, a senior research fellow at Bond University who has written extensively about drug marketing, has a different take on the Gold Coast event. “What you’re looking at here is an extreme and ugly example of a much more common problem,” says Moynihan.
“The idea that something in the order of a million dollars would be squandered on this kind of promotional event is breathtaking. Sadly, this is an example of a routine marketing strategy and that is the wining and dining of Australian doctors by drug companies.
“One of the most disturbing things about it is that the Australian public do not know the names of the GPs and specialists who accepted this largesse from this drug company to attend a promotional event focused on an extremely powerful antidepressant.”
Pfizer’s spokeswoman says the headlining speakers at the Gold Coast event were two doctors from America, Stephen Stahl MD and Larry Culpepper MD.
A bit of background on Stahl: at the Personalized Medicine World Conference this year in Silicon Valley, Stahl lightheartedly began the proceedings by explaining that the problem with psychiatry is, “We ain’t got no diseases — we got disorders.”
Stahl is the author of a bestselling book, Essential Psychopharmacology, which is popular as both a textbook and clinical manual. He has a high profile as a psychiatry academic, having researched and published numerous papers on medicating mental disorders.
And since 2009, according to ProPublica’s Dollars for Docs tool, he has received US$243,483 in direct payments from six pharmaceutical companies in the US. He is most in demand as a paid speaker, receiving US$120,000 in speaking fees from GlaxoSmithKline, Merck and Eli Lilly over the past four years.
What he was paid for the Wyeth event in Australia may not be included in these figures. The Dollars for Docs database amalgamates the payments made by pharma companies to doctors. Such disclosures have been forced on about half the pharmaceutical industry as part of numerous legal actions taken against them by the US government. Wyeth was not one of the companies forced to disclose; Pfizer is forced to disclose.
Under an American law just taking effect, such disclosures will be required of all pharmaceutical companies in the US. There is legislation currently before the Australian parliament to demand similar transparency, introduced by Greens Senator Richard diNatale, but it has not gained the support of either major party.
Culpepper, the other key speaker at the Gold Coast event, is the founding chair of the University of Boston’s department of family medicine. Since 2009 he has been paid US$117,927 from the pharmaceutical companies tracked by the ProPublica tool, with most of his payments coming from consulting on advisory boards for Pfizer, Eli Lilly, AstraZeneca, Merck and Forest.
We don’t know if Drs Stahl and Culpepper’s talks recommended Pristiq, or Efexor. The Global Mail contacted both for comment about their involvement in the million-dollar Australian event, but neither responded to our requests.
WYETH SUCCEEDED IN MAKING AUSTRALIAN DOCTORS AWARE of Pristiq. In the four years after the Gold-Coast get-together, Australian patients filled prescriptions for 3.7 million packets of Pristiq.
Moynihan does not doubt the power of an event like that. “To pretend that these have no promotional elements is absurd and insulting, and I think this is not the only way doctors can learn. There are independent sources of information and education available.” Moynihan lists the Cochrane Collaboration and the National Prescribing Service as examples.
“This is a very serious problem for the health system to deal with,” says Moynihan. “Not only because of the potential economic waste generated by unnecessary prescriptions, but by the real possibilities of harm that can happen when promotion leads to unnecessary prescription.”
Alphapharm, which now sells a generic version of venlafaxine, in its submission to the Pharmaceutical Patents Review in February this year, was scathing about evergreening, and used Efexor and Pristiq as an example of this:
“Typically doctors are encouraged through marketing to prescribe the newer medicine (more expensive) instead of the older medicine (less expensive). This typically occurs when the patent on the old medicine is about to expire.
“There is no improved health outcome of Efexor-XR over Efexor. There is no improved outcome of Pristiq over Efexor,” wrote Alphapharm in its executive summary.
While Alphapharm has obvious commercial interests here — as they’re a claimant for damages for the Efexor patent extension — the National Prescribing Service (funded by the Department of Health and Ageing) has similar things to say.
In the Service’s guide to using desvenlafaxine, there’s a subheading “No evidence that desvenlafaxine is more effective than venlafaxine or other antidepressants,” followed by “No studies have been powered to directly compare the efficacy of desvenlafaxine with venlafaxine or any other antidepressant.”
As for the February 2009 million-dollar event that tops The Global Mail’s database, Australian National University’s Hazel Moir, in her submission to the patent review earlier this year, underscores its significance:
“The dispute about generic entry of venlafaxine prevented generic competition during the months immediately after desvenlafaxine entered the market in February 2009. During this period it appears that effective representations by Pfizer’s sales force led to a massive shift in prescribing to what is effectively the same drug,” she wrote to the panel.
And then, late in the whole expensive saga, the Australian government made a surprising and dramatic move. It finally recognised the family resemblance of the drugs, which the European agency had determined back in 2008.
In a special December meeting in 2012, the Pharmaceutical Benefits Advisory Committee (PBAC) advised federal Minister for Health Tanya Plibersek that desvenlafaxine and venlafaxine should be put in the same therapeutic groups and “these two drugs should be treated as interchangeable on an individual patient basis”. The change was tabled in the Senate May 14.
This is extremely significant, as it not only meant that the government was accepting the similarity of the drugs, but also that Pristiq would have to compete with the generic versions of venlafaxine — and the price would automatically go down.
Four years after its ascension to the market at its million-dollar launch in Queensland and after nearly $120 million of benefits had flowed through the PBS, desvenlafaxine was quietly shuffled into the same category as venlafaxine.
Think of it as an enforced family reunion.