Friday, January 23, 2009

Rx Data Access important to Small Biotechs, Says BIO

Health News Daily
January 22, 2009

Small Biotechs Could Suffer Under State Bans On Selling

Physician Rx Data, BIO Says

Small biotech companies could face a more difficult financial

future should more states succeed in adopting bans on

data-mining of physician prescribing data, the Biotechnology

Industry Organization's Patrick Kelly said.

"Limiting access to this data will actually put smaller

companies at a competitive disadvantage to the other companies

that have been in the space for a period of time," Kelly, VP

of state government relations at BIO, said in an interview.

When smaller biotech companies come to market with a new

product, Kelly noted that they usually have "these very paltry

and bare-bones sales forces," making data that help these

sales forces target physicians treating a specific disease or

even certain geographic information a valuable resource.

In contrast, larger, more established biotechs stand to be

less affected because they likely will have larger sales

forces as well as established relationships with physicians,

giving them an upper hand in the market, he added.

A ban "has this kind of a sweeping, we think unintended,

effect on smaller, more innovative companies coming to market

with products, and they're just not going to be able to

compete," Kelly said.

The data-mining ban returned to the forefront in November 2008

when the First Circuit Court of Appeals reversed an April 2007

district court decision that struck down a New Hampshire law

banning the sale of physician prescribing data (1"The Pink

Sheet," Nov. 24, 2008, p. 13).

The data-mining firms that had sued to block the law, IMS

Health and Verispan (which was bought by SDI in July 2008),

now are hoping the U.S. Supreme Court will take up the case.

A similar law in Vermont, under the jurisdiction of the Second

Circuit Court of Appeals, is still undergoing judicial review.

More than a dozen other states considered similar legislation

last year and a positive signal from the courts could

encourage them and others to continue the legislative pursuit.

Only the large survive?

But the financial woes may not stop there. Being at a

competitive disadvantage could create a ripple effect when it

comes to smaller companies trying to sell their products to

larger ones. The mere fact that they will not necessarily be

on a level playing field could force the smaller company to

sell its product.

"That's a concern," Kelly said. "Are we creating an

environment where only the largest pharmaceutical companies

are going to be able to sustain the market controls that are

being put in place with regard to limiting access to this

data? The small companies that are just coming through with a

product are not going to be able to compete, they're not going

to have the information they need to target their sales and

target their relatively meager sales resources to the doctors,

and they'll just have to sell out."

However, Kelly added that the kind of product a small company

develops also will be a determining factor in how

significantly small companies could be affected by the ban.

"If it's a first-in-class, novel therapy, I think the smaller

companies will probably have a much better chance at creating

a market because there will be so much information about that

product that the physicians will be clamoring to get it, so

the phones will be ringing," Kelly said. "But if it's a

follow-on, or if it's a second-generation product manufactured

by a company, I think it's going to be very difficult for

those companies to have a product in the marketplace."

Tensions between the promotional strategies of small and large

firms also have been on display as the Pharmaceutical Research

and Manufacturers of America presses BIO to adopt its

marketing code (2"The Pink Sheet" DAILY, Nov. 18, 2008).

Unintended consequences of disclosure

In the coming year, Kelly said another trend is likely to be

more states limiting sales and marketing activities in the

wake of a recently-passed law in Massachusetts. The law

requires that any drug company that employs a sales force in

the state file an annual report listing "the value, nature,

purpose and particular recipient of any fee, payment, subsidy

or other economic benefit with a value of at least $50" to

"any physician, hospital, nursing home [or] pharmacist."

(3"The Pink Sheet" DAILY, Aug. 11, 2008).

"Initially, we were concerned that it was going to have a

sweeping impact on whether or not physicians were going to

participate in clinical research projects with companies

because they would have to disclose as a financial transaction

that they were involved in a research project," Kelly said.

"It had nothing at all to do with selling or marketing a


Kelly said Massachusetts physicians were uncomfortable with

the idea of having their names appearing on a state-run Web

site if they were in a contractual relationship with a

biologics company researching a cancer drug, an unintended

consequence of the law. He said BIO was able to prevail in

getting some protections in the final legislation.

But he noted that the intended consequence of this type of law

is to make the relationship between sales and marketing

personnel and physicians more transparent, something BIO does

not oppose.

"The question is how much further down the line does it affect

the physicians and the manufacturers or even the companies

that are not yet manufacturers, the companies doing research?"

Kelly said.

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