Limiting Innovation

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The New York Sun

First the needle, then cake. Or maybe just the cake, and the needle another time.

Cakes and needles are a ritual for many Germans, and this time we’re not talking about teenagers injecting heroin in the toilet at the Berlin train station. The issue is the millions of pensioners who amble into cafes during the afternoon sugar low. Among these German pensioners, as in the rest of Europe, diabetes is rampant. And since Germans, like the rest of us, are eating a lot of sweets these days, the incidence is set to mount.

But not every German who needs to injects his insulin. Pfizer Inc., the world’s biggest drugmaker, funded a survey by Harris Interactive of German diabetics and cake eaters elsewhere. Harris found that eight in 10 such diabetics expressed ambivalence about injecting. Type II diabetics who are taking oral medication often find that pills alone can’t control sugar levels, a problem due in part of course to a fondness for the pastry shop, or McDonald’s. Yet patients hesitate before jabbing.

You can see why: reaching the injection stage is an admission of mortality and of the seriousness of chronic disease – in other words, enough to make you spill some tears over the strudel. Yet the damage from failing to inject is what is terrible – loss of limbs or eyesight, kidney failure, death itself. And that’s the way it has been at the cafe table since the 1920s, when insulin injections first became common in Germany.

Still, cakes-and-needles may no longer be necessary, in part because of the historical German commitment to research and innovation. Pfizer is now marketing the first insulin inhaler, Exubera. A California company, Nektar Therapeutics, painstakingly developed the inhaler device; Pfizer poured a billion dollars into clinical trials. A venerable German pharmaceutical company, Hoechst – now part of Sanofi-Aventis SA – did its bit in the story in the late 1990s by joining Pfizer in constructing an insulin plant in Frankfurt.

But Exubera may not become available to Germans – or to Britons either. Recently, Pfizer asked Britain’s National Institute for Clinical Excellence, the U.K. advisory board on medicines, to consider recommending Exubera for Britain’s National Health Service. NICE’s recommendations matter not only for Britain’s NHS patients but also across Europe, where other regulators and purchasers follow the NICE lead.

Just before Easter, or in time for the chocolate eggs, NICE announced that it didn’t recommend that NHS doctors be permitted to prescribe Exubera because the evidence showed it was “unlikely to be cost-effective.” Within days, the NICE counterpart in Cologne, Germany, issued a similar analysis. German doctors can’t prescribe Exubera if German agencies have not approved it.

Pfizer is hoping that both the Germans and NICE will reconsider – another, final, appraisal document is due out from NICE this fall.

The NICE arithmetic assumed that it would cost 1,100 pounds ($2,053) to give a patient Exubera instead of the traditional injections, estimated at 400 pounds per patient per annum. In other words, Exubera was too expensive.

But this math seems odd. For one thing, ending injections means an improved quality of life. It’s more pleasant to have an inhaler in your pocket when you visit the grandchildren than a packet of needles.

But NICE also failed to take into account that Exubera will likely lead to better glucose control. Drug companies have found that people prefer inhalers, or at least use them more routinely. Such use will mean fewer hospital stays, fewer complications and of course, fewer prescription drugs. (As anyone who has ever had a diabetic parent knows, the pills for complications from diabetes can fill up even the giant-size pill dispensers you buy at the drugstore).

By rejecting both these arguments, NICE has placed not only Pfizer, but also other innovators, in a no-win situation. No new drug will be accepted until its success is more broadly proven. But proof of that success can only come with the broad use that comes after approval.

Pfizer expects to introduce Exubera this summer in the U.S. The Food and Drug Administration approved it in early February. Though neither NICE nor its continental counterparts will acknowledge the fact, this will change the balance of power on the subject in Europe as well.

After all, now there will be proof of success, and German cafes do sometimes have Internet terminals.

Once word of the American experience reaches Germany, consumers there may push for change. In Britain, the head of “Diabetes UK,” a charity, has already declared support for Exubera. And naturally Pfizer is pouring cash into Exubera’s defense, which should have an effect as well.

Big drug companies prefer dealing with governments and other big purchasers more than they like to admit. But it would be a wonderful thing for Britain and Germany if patients there could routinely buy Exubera or other expensive drugs on their own, without intervention by regulators.

Still, the problem here is not evil Big Pharma, as much as its size provokes the public and regulators. The problem is the government agencies. Government cost-controls do limit innovation. Sometimes, the damage feels like a blow. Other times, it comes more as a jab.

Miss Shlaes is a columnist for Bloomberg News.

The New York Sun

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