When I hear public uproar over the price of prescription drugs, my initial urge is to defend the pharmaceutical companies. The average R&D cost for a new molecular entity (NME) to get from bench to bedside is over $800 million* (cue the Dr. Evil music). It does not help that the FDA charges almost $2 million just to submit a new drug application (NDA) for review. Drug discovery is a pricey business and pharma companies are entitled to recoup on this considerable investment to keep the pipeline moving.

However, it’s getting harder to defend pharma when it comes to “me-too” drugs. “Me-too” drugs are pharma’s version of a bandwagon. One company finds a drug that treats a disease, and suddenly ten other companies are developing something similar. This happens for two reasons: (1) to get a piece of a large pie, or (2) to soften the hit when a blockbuster goes generic.

My Piece of the Pie: A good example of this is the TNF alpha inhibitors. Enbrel, Remicade, and Humira each had sales of over $3 billion in 2007. Big pie! However, many would argue that their efficacy, safety, and tolerability profiles make them, essentially, similar. Many people though, including me, do not consider these classic “me-too” drugs; both Remicade and Enbrel were approved in 1998 and Humira in 2002. The novelty of biologics provided some latitude for close follow-on drugs in the early days. Recently, two new TNF alpha inhibitors have been approved: Cimzia (2008) and Simponi (2009). These new entrants will need to show some practical improvement over existing treatment options, or they will likely suffer the “me-too” curse. No one wants to be the next Bystolic, which was the 19th beta-blocker to be approved by the FDA (2007) and averages about $20 million in yearly sales.

Patent Extender: Pristiq was approved in 2008 as a treatment for major depressive disorder, which made it the 367th drug available for this indication. What’s Pristiq? Pristiq is desvenlafaxine, which is the active metabolite of Effexor. Pristiq is what Effexor is thought to become in the body that makes it work in the brain. Wyeth, now Pfizer, wants to protect the Effexor franchise (sales of $3.8 billion in 2007 and going generic in 2010) and did so by creating a drug that is essentially Effexor but can be sold at a premium price. It hasn’t worked out too well. Pristiq sales numbers have been much lower than hoped for, regardless of the company’s spin. Here is the juicy part: Pristiq’s original lead indication was to treat menopausal hot flashes and night sweats. This would have made it a first-in-class drug, but poor clinical trials forced Wyeth to go to the back-up plan.

Patients and insurance companies are not going to pay for a branded drug that provides little incremental benefit compared with a generic. Outcomes research will allow drugs once destined for “me-too” status to differentiate themselves in ways that will convey a sense of utility to all key stakeholders. This is one way that comparative effectiveness will have a significant impact in shaping the future of health care.

*http://www.cbo.gov/ftpdocs/76xx/doc7615/10-02-DrugR-D.pdf. †Some patients will respond to one and not another, but, in the bigger picture, differences are minimal. ‡Yes, I’m kidding. Only 14 drugs are approved for MDD.