Luke Timmerman 2/2/11
If Vertex Pharmaceuticals gets its way in talks with U.S. public health officials, most people over 50 could soon get blood tests to screen for hepatitis C infections at the doctor’s office. If the U.S. Centers for Disease Control and Prevention (CDC) agrees this is a good idea, it could prompt another 1 million patients who don’t realize they are infected to come out of the woodwork and start clamoring for Vertex’s new hepatitis C drug over the next few years.
The Cambridge, MA-based biotech company (NASDAQ: VRTX), which has operations in San Diego, has joined other drugmakers in supporting studies they hope will persuade the CDC to recommend routine screening for hepatitis C, Vertex CEO Matt Emmens said in a recent interview. The company is one of the sponsors of what’s called the Viral Hepatitis Action Coalition, a public-private partnership with the CDC, which is conducting studies known as BEST-C. These studies could determine how effective it is to screen patients for hepatitis C infection more widely.
These studies, which are expected to cost a total of $3.6 million, could be worth billions to Vertex if they show that screening random Baby Boomers is worthwhile.
An estimated 600,000 patients in the U.S. are expected to seek treatment that could include Vertex’s drug, or a rival offering from Merck, if the FDA clears the new drugs for sale as analysts expect in the middle of this year. The two new protease inhibitors are being hailed as major steps forward, as they have been shown to roughly double cure rates of hepatitis C, a viral infection that damages the liver over many years. Vertex’s drug, telaprevir, has shown it can push the cure rate up as high as about 75 percent, while cutting the treatment time in half to about six months. That means patients don’t have to endure such a long period of flu-like symptoms, which has traditionally discouraged many patients from getting treatment.
The new advance from Vertex, demonstrated in a trio of pivotal clinical trials, has created this huge wave of pent-up demand from patients and doctors. Knowing this, many analysts have projected the product will be pretty much an instant hit, topping $2 billion in U.S. sales after just a couple years. But then, some expect sales to taper off, as many of the most motivated patients get cured, and don’t need the drug anymore. Essentially, they see Vertex possibly becoming a victim of its own success.
That’s not how it will play out, says Emmens, a marketing veteran who spent much of his career at Merck. An estimated 3.2 million to 3.9 million people in the U.S. have chronic hepatitis C infections. That’s a lot more than the initial wave of patients, which is mostly composed of people who sought treatment before but relapsed. Besides those patients, many more candidates are Baby Boomers who don’t know they contracted the hepatitis C infection decades ago through unprotected sex, IV drug use, or blood transfusions from contaminated supplies. Many of these infections lie dormant for about 20 years or more, but are just now starting to emerge over the decade to come, Emmens says. Some patients won’t see symptoms at all, and as the AP pointed out in this solid feature last month, it’s hard to tell which infected patients are likely to get the worst symptoms. The unluckiest ones will end up suffering severe liver scarring (cirrhosis), liver cancer, liver transplants, and ultimately, premature death.
Connecting with that massive crowd of patients, who aren’t motivated to seek treatment today because they don’t see any really bad symptoms yet, is one of the big marketing challenges Vertex faces. The company is planning to spend some of its $1.3 billion cash hoard on a public awareness campaign designed to urge people to get tested to see if they have the virus, Emmens says. But even more important than the ad campaign, Vertex is hoping the CDC will recommend routine hepatitis C screening, which would start turning up a lot more positive tests. If it does, Emmens he predicts it could prompt another 1 million patients to seek treat treatment around 2014 and later, right as the most people in the initial wave of highly motivated patients go home having been cured.
“You have an estimated 2 million people out there who are not aware they are infected,” Emmens says. “Some don’t know, or just don’t give a damn, or have other problems, and won’t seek treatment. But if you found 1 million new patients over a two or three-year period, there’s a second tsunami.”
As for analysts predicting telaprevir will rise and fall, Emmens shook his head. “That’s absurd. I understand they’ve got to do their job. But from a marketing guy’s perspective, that just doesn’t happen unless you lose your patent,” Emmens says. “Docs use what works. Patients will come in, and they will want the highest chance they can get of a cure. That’s what they really care about.” A shorter treatment period, and more convenient twice-daily dosing instead of thrice-daily are a couple of other features Vertex is hoping to incorporate into hepatitis C treatment, he adds.
Vertex has clearly been spending a lot of time lately thinking about making its case to insurers. The trick will be to persuade insurers that it’s worth spending quite a bit of money upfront on a potent new drug to attack a dormant infection, as opposed to waiting to see if patients get sick years later and rack up big hospital bills. Emmens notes that liver transplants cost around $300,000, and, obviously, not everyone who wants a new liver actually survives long enough to get to the top of the waiting list. Vertex, citing an actuarial study it sponsored to try to measure the cost of future treatment, says medical costs in the U.S. for people with hepatitis C are expected to more than double, from $30 billion in 2009 to approximately $85 billion—presumably when factoring in a lot of liver transplants.
I must say I’m personally wary of drugmakers who use their money and influence to rewrite health guidelines that end up favoring their bottom line. Companies that want to sell more drugs for high blood pressure, osteoporosis, and obesity have been known to push for new health guidelines that classify many more people as “Suddenly Sick” as a couple of my former Seattle Times colleagues wrote in a terrific investigative story in 2005. Whether this aggressive new treatment is really beneficial to people’s health over the long run is often unknown.
This case strikes me as somewhat different, though, because today’s available hepatitis C treatment is really so poor. Vertex and Merck are essentially coming along with drugs that represent a big leap ahead with potential to cure hundreds of thousands, maybe millions, of people. It will probably cost taxpayers a few billion dollars a year for many years to come, and it’s always hard to say for sure how many billions you might save down the road when people don’t end up in the hospital getting liver transplants. But you can be sure Vertex is working hard behind the scenes right now to convince officials that an ounce of prevention is worth a pound of cure.
Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. You can e-mail him at ltimmerman@xconomy.com, or follow him at twitter.com/ldtimmerman.
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