by Steven D. Targum, MD, and Alan J. Milbauer, RPh, JD
Dr. Targum is an executive-in-residence at Oxford BioScience Partners and on the faculty of the Department of Psychiatry at the Massachusetts General Hospital. Dr. Targum is chief medical officer at BrainCells Inc., and chief medical advisor to Prana Biotechnology Ltd. Dr. Targum is on the editorial staff of Psychiatry 2008. Mr. Milbauer is retired after 32 years with AstraZeneca and its predecessor companies; his last position was Vice-President, Public Affairs.
Psychiatry (Edgemont) 2008;5(8):57–60
Dr. Targum has stock or stock options in BrainCells Inc. and Prana Biotechnology Ltd. In the past year, Dr. Targum has been a consultant to United BioSource Corporation, Dynogen, Epix, DOV Pharmaceuticals, Sepracor, NuPathe, and Memory Pharmaceuticals.
The introduction of a new psychotropic medication to the US commercial market follows a complex process that may extend many years from the initial discovery of the putative drug through the US Food and Drug Administration (FDA) approval and final market launch. At the prescriber end of this process, clinicians may not be fully aware of the deliberate steps required by pharmaceutical companies to gain FDA approval or aware of the internal company discussions that ensue about how best to introduce a new drug to the market. In this column, I interviewed Alan J. Milbauer, a retired vice president from AstraZeneca, who agreed to discuss the challenges of drug development from the perspective of a pharmaceutical company executive.
What was your role in the drug development process?
Mr. Milbauer: During my years at AstraZeneca, I had several roles related to commercial drug development: At one point, I was Vice President of Planning and was responsible for leading a group of product planners and market researchers who served on several multidisciplinary teams, which comprised key scientists and physicians and were used to determine the right development course for any new product. At another time, I was Vice President for Drug Regulatory Affairs and was primarily responsible for interactions with the FDA.4
Who was on the multidisciplinary teams?
Mr. Milbauer: The multidisciplinary teams included drug discovery scientists, clinicians, drug safety specialists, marketing and planning specialists, as well as experts in legal and regulatory affairs. Our company had six distinct therapeutic area subgroups that met separately prior to meeting with our group. These subgroups varied from oncology to infectious disease to cardiovascular to central nervous system (CNS), and each subgroup had their own products to promote for further funding. We might have been evaluating and planning for 15 different drugs at any point in time.
Was there internal competition between new drugs for psychiatry versus oncology or other therapeutic areas?
Mr. Milbauer: Absolutely. We could not fund every promising new product through the entire development cycle. The chair of each subgroup needed to be a passionate champion for his or her own drugs. There were some heated debates among the multidisciplinary team members. For example, in the mid-1990s, Seroquel (quetiapine) was competing with Accolate (a leukotriene antagonist drug to treat asthma) as well as with some infectious disease, cardiovascular, and oncology drugs during its development.
How were decisions made about which drug should be developed?
Mr. Milbauer: We were a company dedicated to finding breakthrough drugs, but we could not afford to put all of our eggs in that basket. So, we needed to consider many factors beyond the breakthrough potential when we chose a drug for further clinical development.
We began by educating ourselves about the disease and the putative drug. We invited clinical experts and practicing physicians to teach and inform us about the disease, the existing treatments, the existing competition, and the market need. We examined the challenges to successful product launch, including the specifics of the drug (preclinical toxicities, formulation, manufacturing issues, dosing, clinical trial issues), the likely duration of exclusivity of our drug versus the competition, our sales resources in that therapeutic area, as well as the potential profitability of the drug in the marketplace. Market research played a large role in our planning process and decision making.
How did your marketing research affect drug development decisions and planning?
Mr. Milbauer: An important part of marketing research meant that we went to the physicians who actually treated the patients. We could not have proceeded without learning from these clinicians. In fact, sometimes we realized that our so-called “breakthrough” treatments might change the way physicians practiced. Although exciting in some respects, changing beliefs and practices is challenging and was an operational issue for our planning group.
One example is the drug Zoladex (goserelin) a one- or three-month injectable depot used to treat prostate cancer. This injectable LH/RH analogue suppresses testosterone and might obviate the need for surgery in some cases. Initially, we thought our market would be the oncologists but quickly realized that our real targeted physician group was urologists. Well, urologists are surgeons and we were introducing a treatment that was an alternative to surgery! Although we believed we had a treatment that was good for patients, we had to convince the urologists to store an injectable drug, get reimbursement from third-party insurers, including the Federal government, and forego surgery. We identified key opinion leaders to work with our drug and ultimately we changed some of their perceptions and practices.
Another example is the anesthetic drug Diprivan (propofol), which really changed the way anesthesiologists practice medicine. Prior to our drug, surgical anesthesia involved short-acting pentothal followed by gases, like halothane, for most surgical procedures; patients were often nauseated and drowsy postoperatively. However, our product was an injectable that seemed “foreign” to most anesthesiologists, although it provided easy induction, kept the patient safely under anesthesia for 3 to 4 hours, and avoided nausea postoperatively. Our drug was expensive relative to inhalational gases. The key to a successful launch meant convincing hospital pharmacies to budget for and store our drug (previously gases were kept in the operating room) and getting physicians to try it. We succeeded and created the market for our drug. Today, it is used for more than 50 percent of surgeries.
How did your planning group view Seroquel during its development?
Mr. Milbauer: Actually, Seroquel was a challenging product for development support. We had no previous experience with schizophrenia, let alone CNS, and had no sales force to meet with psychiatrists. We had some preclinical concerns about cataracts in beagles and dosing questions, and we knew that we would be the fourth or fifth entry into the US market. A challenging product might be supported for further development if there was existing expertise inside the company, including a sales force, and we believed we could support working through the challenges. Many in senior management, however, believed that a fourth or fifth atypical antipsychotic medication would not be profitable in the marketplace.
A pivotal step for the planning team’s ultimate decision to support Seroquel was the effective partnering with the CNS discovery team so that we and senior management could be educated about the drug’s real potential. We learned that not all atypical antipsychotics were the same, unlike some classes of antihypertensive agents, which we understood to be difficult to differentiate in the marketplace, and we were convinced by the sustained belief of the CNS group that clozapine would have been a blockbuster had it not been for the risk of agranulocytosis. Clearly, the successful results for Seroquel in the marketplace have shown that they were right.
How did you interact with the FDA?
Mr. Milbauer: I led a group of professionals representing a number of scientific disciplines, like chemistry, pharmacy, pharmacology, and law, who acted as the primary liaisons with FDA reviewers and administrators with respect to drugs in development and those already in the market. It was our job to interpret FDA’s requirements while advocating the company position on the many issues FDA considers during a drug product’s life-cycle. We were also the group that assembled the vast amount of data on clinical safety and effectiveness, chemistry, and manufacturing into a dossier that would be accurate and result in FDA’s approval of each step along the way.
How did you choose a drug name?
Mr. Milbauer: We worked with an independent branding company who would assure that a potential drug name was memorable, available globally, and did not contain some inadvertent meaning in another language. Our company chose, for example, in oncology to use “dex” as the last syllable in our family of products, e.g. Nolvadex, Zoladex, Casodex, etc.
I did not always like chosen drug names when they were first suggested, but usually got used to them. One drug, Zestril, an antihypertensive drug, turned out to have a great brand name, which may have been responsible for its success in the marketplace. We had a license agreement with another company who was marketing the same molecule under a different name. We achieved greater than 60-percent market share by using the Zestril brand name and bright red advertising in medical journals.
Sometimes, the FDA would ask us to change a name after product launch because pharmacists found the name confusing or too similar to other prescribed drugs. After the extensive planning process, a name change was an expensive and frustrating ordeal for us.
How did you choose an appropriate price?
Mr. Milbauer: Well, a drug company is a for-profit business and we obviously sought to make a profit. We would compare our drug with existing treatments for the disease, the market need, and our costs for development. We generally determined a “value” for the product in terms of the benefit to be derived by patients when compared to existing therapies or other types of interventions, e.g. surgery, hospitalization. Over the past 15 to 20 years, there are many new “payors” to consider when pricing a new medication.
What is the expected return on investment when a drug is introduced to the market? How did you determine if you had a successful launch?
Mr. Milbauer: It’s important to appreciate that we set goals for each newly launched product, such as volume of new prescriptions, formulary acceptance, refill rates, and ultimately sales from our factories. We did not evaluate success based solely upon one drug. With each new drug’s approval and introduction to the US market, there were other drugs that had failed to make it through development. So, when we calculated our return on investment, we included costs for all of the drugs in our development programs. Historically, 20 percent of a company’s revenue goes back into research and development. A drug launch is expected to recover the investment for both the specific drug and the failed drugs that did not get approved. Regarding success, not every drug is expected to be a breakthrough drug.
Today, a number of large research-based companies expect some of their leading pharmaceuticals to earn 1 to 5 billion dollars at the peak of the drugs sales cycle. However, other products may be considered successful at $500 million if they’re serving a patient or clinician need.
What do you think of direct to consumer advertising?
Mr. Milbauer: I think direct to consumer advertising can be very useful if it is done ethically and professionally. Advertising can inform patients and facilitate a discussion between them and their doctors about illnesses that they did not know about. Third-party studies have shown that direct-to-consumer advertising is more helpful than harmful in getting good patient care. On the other hand, TV advertising has brought a spotlight on pharmaceutical companies and created the false image that they spend too much on advertising to the public. Although this is an inaccurate perception relative to the extraordinary expenses for research and development, I believe this image many consumers have about the industry is to its detriment.
Looking back on your years in the pharmaceutical industry, what was the most challenging part of your job?
Mr. Milbauer: Sometimes I had to convince senior management to drop a drug from development because, in our commercial judgment, the product was unlikely to be successful. The reasons could have been competitive positioning or the amount of commercial resources required, pricing issues, dosing or safety issues, or patient acceptance…but those reasons frequently did not matter to the scientists who had been advocating for the drug. I found myself having to persuade people who had spent many years developing “their” compound that it was not in the company’s best interest to pursue the drug, and often these people had difficulty accepting the corporate perspective. But, it was a business after all.