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TAXOTERE ACCELERATED DEVELOPMENT IS KEY TO TAXOL PRICING, NCI SAYS: LONG-TERM PRICES WILL BE RESTRAINED; INITIALLY, BRISTOL PRICES MAY BE FORCED HIGHER

Executive Summary

The National Cancer Institute's "reasonable pricing" discussions with Bristol-Myers Squibb regarding Taxol recognize that the Bristol compound is likely to have competition from Rhone-Poulenc Rorer's Taxotere in the "foreseeable" future. Michael Friedman, associate director of the Cancer Therapy Evaluation Program, told the NIH Director's advisory committee meeting on Dec. 2 that NCI is aggressively promoting the potential of a Taxol v. Taxotere competition in the marketplace as a way to control the long-term costs of the products. NIH Director Bernadine Healy, MD, commented more generally that competitive therapies could help reduce drug costs. "Although [Taxotere] is somewhat behind" Taxol in development, the Rhone-Poulenc Rorer compound "will probably soon be on the market," Friedman said. NCI is working with RPR on Taxotere clinicals as part of a CRADA [cooperative research and development agreement] signed in mid-May. RPR has predicted an NDA filing by 1994-1995. NCI's involvement may be able to expedite the RPR schedule as well. NIH Director of Technology Transfer Reid Adler noted that several of the institutes' current CRADA projects are moving at a much faster pace than originally predicted by NIH. The two CRADAs with "reasonable price" clauses, for Taxol and Videx (ddI), originally were expected to take five to ten years to get to market, Adler commented. Videx was approved by FDA within four years of the CRADA contract; Taxol appears ready to be approved within two years. Unlike Taxol, for which NCI was the research initiator, Taxotere has been brought into clinicals by the private sponsor. NCI is just beginning to get involved in the project, Friedman commented. Following the CRADA, he said NCI's involvement with Taxotere will be minimal. The presence of an NCI-supported, patented compound from a more widely available source of raw materials on the heels of Taxol is a major factor as Bristol prepares for Taxol's initial approval and decides on market pricing. While NCI hopes that the two compounds will work against each other to keep the long-term costs down, the short-term competition may force Bristol initially to price Taxol aggressively. NCI appears to be aware of this trade-off. At a meeting this summer on the price of Taxol, the NCI director of the Division of Cancer Treatment, Bruce Chabner, MD, observed that Bristol will have to assume short-term market exclusivity. Bristol is in a vulnerable position closely analogous to Burroughs-Wellcome at the time of first approval for Retrovir (AZT) in March 1987. When Taxol is approved, the company will have to price the product estimating for a short-term return on investment. If Taxol proves, as AZT has, to have a longer commercial viability than expected at introduction, then Bristol will have a larger revenue flow than anticipated, but it is likely to face the image problem that has bedeviled Burroughs Wellcome for nearly the last six years. NIH has been meeting roughly on a monthly basis since mid- summer with Bristol to discuss NIH's pricing role in general under the purposefully vague "reasonable price" language of the Taxol contract. Friedman described the current CRADA language (which differs for patentable and unpatentable products) as a platform for jawboning companies about their prices. Friedman noted that CRADA partners will be asked to submit a written document to justify the final price. Although Bristol has not yet submitted a price to NIH, the company reportedly submitted an explanation of the factors that have gone into Taxol pricing calculations. NCI officials expect that a sanitized version of the Bristol pricing justification paper will eventually be made public as part of the CRADA process. The development of competing products as a cost-control stragtegy has some drawbacks. If NCI scares Bristol into a higher starting price for Taxol because of the presence of a follow-up compound, then the institute may end up setting a high benchmark in the product class. NIH could circumvent its competition objective by allowing more pricing flexibility for the RPR product if and when it reaches the market. The threat of damage to Bristol's corporate image from a high Taxol price may be somewhat diminished by the close Capitol Hill attention to the whole process. Whatever the introductory price, Bristol is likely to face tough going on Capitol Hill. Rep. Wyden (D-Ore.) and Sen. Pryor (D-Ark.) continue to air their concerns about the development of products from cooperative agreements with the government. Wyden is closely watching over NCI's shoulder to see how far the research institute goes in its application of the vague "reasonable price" language in the CRADA on Taxol. Wyden has suggested that the new generation product be brought to market at the bottom end of the price spectrum for current therapies ("The Pink Sheet" Nov. 2, T&G-5). Pryor's Senate Aging Committee has requested a study on CRADAs by the HHS IG. Initial interviews for that study are being conducted. The fine line for Bristol in the Taxol pricing decision may be to balance the potential for a short period of exclusivity with NCI's maximum tolerance of a price. The company presumably needs to keep NIH and NCI on its side in the face of likely congressional hearings. Bristol says it favors the competition method to controlling prices. In comments submitted to the NIH advisory committee, Bristol-Myers Squibb Senior VP Bruce Ross noted that "NIH can and should encourage competition in the marketplace, so that market forces will act as a restraining influence on the prices of products developed under CRADAs." Ross maintained that "fostering healthy competition in the marketplace is perhaps the most effective way to insure that collaborators will establish reasonable prices for products developed under CRADAs." The reason for NCI's positive estimate on Taxotere is indicated by a report published in the Dec. 2 Journal of the National Cancer Institute. Reporting on a 39-patient Phase I trial at MD Anderson Cancer Center (Richard Padzur, MD, et al.), the journal article maintains that Taxotere showed anti-tumor activity in six patients with ovarian cancer and one patient with advanced breast cancer. The article also suggests that Taxotere may have fewer cardiovascular side effects than Taxol. The Phase I study enrolled 39 cancer patients with advanced disease. Most of the patients had ovarian cancer (10), colon or rectal cancer (11), unknown primary cancer (5) and breast cancer (3). A starting dose of 1 mg/m per day (over a 1-hour period) for five days was given every 21 days. Dose escalations began with 100% increments, then 50% and 25% increments. At least three patients were given each dose level of Taxotere. The drug was administered in successive dose levels of 1, 4, 8, 16, 12, and 14 mg/m per day. "A total of 106 courses were administered," the study says. "Six ovarian cancer patients experienced evidence of clinical antitumor response," the study investigators stated. All of these patients had carboplatin-resistant disease. "Only three of these patients had measurable disease. Two of these demonstrated minor responses, and one attained complete regression of a biopsy-proven pelvic mass." After receiving Taxotere "a 39-year-old woman, whose advanced breast carcinoma had progressed on two chemotherapy regimens of cyclophosphamide, doxorubicin, methotrexate, fluorouracil, and cisplatin, attained a partial response," the study says. "This response (in hepatic metastases) lasted two months." "The dose- limiting effects toxic effects of the 5-day schedule are granulocytopenia and mucositis," the MD Anderson investigators noted. At the dose of 16 mg/m per day, "concurrent grade 4 granulocytopenia and grade 3 oral mucositis were observed in six of 12 patients, all of whom developed granulocytopenic fevers and required hospitalization." These reactions were also seen "in two of 10 patients treated at 12 mg/m per day and in two of eight treated at 14 mg/m per day." Pazdur, et al., concluded: "We recommend a starting dose of 14 mg/m per day for Phase II studies of this 5-day schedule."

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