Authors Posts by thinkBiotech



Countries use various methods to control drug expenditures. Beyond simple negotiation, countries can also implement price controls or use WTO-authorized compulsory licensing, which enables a country to produce generic versions of branded drugs if they face a health crisis without violating international patent agreements.

The United States threatened to use compulsory licensing to acquire cheap stocks of the antibiotic Cipro in the wake of anthrax-tainted letters being sent through the mail. Thie threat of compulsory licensing was sufficient to compell Bayer to reduce the price of the drug.

It doesn’t always work out so favorably, however. New Zealand nearly saw AstraZeneca pull out of their market in the face of Zoladex price controls. More recently, Abbot has threatened to stop licensing any drugs to Thailand.

The bottom line here is that there is a clash of interests. Countries need to reduce the burden of health care expenditures on their economies, and drug companies need to recover development costs and make a profit. Price controls and compulsory licensing give countries leverage over drug firms, but if these measures eliminate profits, drug companies are liable to simply stop selling drugs – and also stop developing drugs – for specific markets.

So, what is the solution? How do countries which can’t afford to pay for drugs get drugs developed for their specific needs? Organizations like OneWorld Health and the Bill and Melinda Gates Foundation specialize in developing drugs for needy and under-served markets.

Investing and Clinical Trials

PharmaGossip has an illuminating excerpt from The End of Medicine describing a method to invest in drug companies as they progress through clinical trials.

Ted Love, CEO of Nuvelo Inc., explains how biotechnology companies are frequently able to recover from seemingly disastrous clinical trial failures.


When manufacturers seeking to sell generic drugs challenge patents in order to try and enter the market, the patent holders will sometimes settle out of court and pay the generic company to wait until the patent expires. There is growing opposition in congress to this practice, with some lawmakers calling it anticompetitive.

In order to challenge a patent, a challenger must either have been sued for infringement, or be able to demonstrate that they are likely to be sued for infringement. This can place licensees in a dilemma where they must decide to license a patent they feel is invalid, or infringe a patent and challenge it but risk paying triple damages for willful infringement. A ruling in the case of Medimmune v. Genentech has strengthened the case for licensees, permitting them to pay licensing fees “in protest” and still challenge a patent.


The Chinese biotechnology and pharmaceutical sectors are rapidly growing as increasing numbers of expatriates are returning, bringing skills and connections from abroad back home. Chemical Engineering News profiles the Chinese pharmaceutical industry and investigates the challenges it still faces.

Sir Chris Evans, founder of Merlin Biosciences, blames British biotech investors for having a ‘sick garden syndrome’, stating “We keep pulling the flowers up every six months to look at the size of the roots, and ram them back in the ground wondering why they struggle to grow.”

There’s been a lot of press floating around lately about the push to develop a framework for biogeneric (or biosimilar, or follow-on, etc.) approvals.

Why are biogenerics so hard to regulate? Why can’t they just follow the same path as traditional generic drugs? The answer lies in their size and complexity. I’ll use the following excerpt from my book:

Generic vs biogeneric drugs
Source: Building Biotechnology

Generic vs biogeneric drugsThe difference between traditional drugs (typical of traditional pharmaceutical techniques) and biologic drugs (typical of biotechnology techniques) is illustrated in Figure 4.1. Aspirin is very small. Erythropoeitin (Epogen) is more than 500 times larger than aspirin. This size difference alone makes it difficult to determine that a generic version of erythropoeitin produced by a second party is identical to a version produced by an innovator. Furthermore, biologic compounds can undergo subtle modifications which are currently very difficult to detect.

In order to gain approval, traditional generic manufacturers must demonstrate that their drugs are chemically identical to pioneer versions and exhibit the same properties in the human body as the original drugs do. How can you do this for biogenerics? Well, you can’t. It’s currently not possible to demonstrate that a second-source biologic drug is identical to an innovator’s drug. That’s why the path to biologic generics is likely going to involve abbreviated clinical trials and it’s why the resulting generics will likely exhibit slightly different properties than the original drugs. Because of these differences, biogenerics won’t be as relatively cheap as traditional generics are, and they’ll face an extra burden to demonstrate that they are as safe and effective as the established branded drug they’re competing with.

Courtesy of

Drug Patent Expirations in March 2007

*Drugs may be covered by multiple patents

Tradename Applicant Generic Name Patent Number Patent Expiration
BUDESONIDE Astrazeneca budesonide 4,907,583 MAR 13,2007
FEMPATCH Parke Davis estradiol 4,906,463 MAR 06,2007
GLYNASE Pharmacia And Upjohn glyburide 4,735,805 MAR 11,2007
LOTREL Novartis amlodipine besylate; benazepril hydrochloride 4,879,303 MAR 25,2007
VIDEX Bristol Myers Squibb didanosine 4,861,759 MAR 01,2007
VIDEX Bristol Myers Squibb didanosine 5,254,539 MAR 01,2007
VIDEX Bristol Myers Squibb didanosine 5,616,566 MAR 01,2007
VIDEX EC Bristol Myers Squibb didanosine 4,861,759 MAR 01,2007
VIDEX EC Bristol Myers Squibb didanosine 5,254,539 MAR 01,2007
VUSION Barrier miconazole nitrate; petrolatum, white; zinc oxide 4,911,932 MAR 27,2007

I’ve been invited to join the editorial board of the nascent Open Biotechnology Journal. The Open Biotechnology Journal is a peer-reviewed open access journal and aims to publish original research papers in all core areas of biotechnology including basic and applied research, e.g, molecular engineering of nucleic acids and proteins; molecular therapy; imaging technology and large-scale biology; regenerative medicine, analytical biotechnology; food and agricultural biotechnology; environmental biotechnology.

If you are interested in contributing to this new journal, please drop me a line via the contact form.

Scientific Advances

The MaRS Blog has a captivating story of Canada’s recent major diabetes discovery. The first discovery, in 1920, elucidated insulin’s central role in diabetes. The most recent discovery, also from the University of Toronto, has found a strong link between diabetes, pain nerves, and inflammation. Researchers were able to prevent and even reverse diabetes in mice modulating the neuroinflammatory mechanism without any serious side effects.

In the Pipeline issues a dose of realism for the overly-optimistic news of a potential anti-cancer drug found by mistakenly using a high concentration of compounds not previously known to have an anti-cancer effect.

Patents and Regulation
I always like a good inequitable conduct case, and the Patent Baristas have got a fresh one! Amphastar and Teva successfully challenged Sanofi-Aventis’s Lovenox patent by convincing the court of deceptive intent by Sanofi.

Eye on Pharma has some recomendations for the FDA. After years of being simultaneously blamed for being too lax on safety and not moving quickly enough on safety, this nine-step plan for change aims to restore the agency’s credibility.

I’ve railed about Michael Crichton’s misguided NYTimes Op-Ed’s before, and his most recent anti-patent screed is as misguided as his previous posts. I rather liked Nobel Intent‘s take on the matter: “It is becoming a truism that if there are two sides to a scientific debate, Michael Crichton can usually be found on the wrong one.


John Mack at Pharma Marketing has another excellent post on what I’d call “excessive creativity” in pharmaceutical marketing. Whereas branded websites providing information on drugs must carefully meter their statements, the same does not hold true for unbranded sites. Through a little investigative journalism, Mack has discovered a thinly veiled promotional agenda for weight-loss drug Alli.

Industry Trends

Yet another industry giant enters the biotechnology fray. Following the path laid by IBM, Motorola, Corning, and others, General Electric is investing in biotechnology – specifically in medical diagnostics.

Courtesy of

Drug Patent Expirations in February 2007

*Drugs may be covered by multiple patents

Tradename Applicant Generic Name Patent Number Patent Expiration
PRECOSE Bayer Pharms acarbose 4,904,769 FEB 27,2007
PREVACID Tap Pharm lansoprazole 6,123,962 FEB 13,2007
PREVACID Tap Pharm lansoprazole 6,749,864 FEB 13,2007
QUADRAMET Cytogen samarium sm 153 lexidronam pentasodium 4,898,724 FEB 06,2007
UNIRETIC Schwarz Pharma hydrochlorothiazide; moexipril hydrochloride 4,743,450 FEB 24,2007
UNIVASC Schwarz Pharma moexipril hydrochloride 4,743,450 FEB 24,2007

Courtesy of

This edition of the Carnival of Biotechnology features a number of posts on distressing industry trends, some enlightening patent discussion, and interesting commentary on issues in commercialization

Industry Trends

Forbes presents Genentech’s Next Act. his dialogue with Genentech’s chief officers acknowledges the longshot Genentech was in its early days and plots the future paths Genentech is pursuing to continue to grow.

The Economist presents Billion dollar pills — a profile of the overhaul transpiring at Pfizer. The magnitude of the hanges taking place at Pfizer, the world’s largest drug company, cast a dark omen over the rest of the industry.

In a departure from the typical “David and Goliath” partnerships between typically small biotech firms and typically large pharmaceutical firms, pharmaceutical giants AstraZeneca and Bristol-Myers Squibb have formed a partnership to develop diabetes drugs. Could this be the start of a new trend? The Mars Blog gives you their take.

Wrapping up M&A activity in 2006, Signals Magazine finds M&As still sizzling.

Regulation and Patents

Fighting Aging has an interesting take on medical tourism. Beyond just offering lower prices due to lower operating costs, Medical Tourism Means Medical Competition because it can also skirt patent and regulatory burdens.

The Patent Baristas ask Is it Worth it for Generics to Challenge Branded Drugs? The case of Apotex’s generic Plavix highlights many of the motivations for generic firms to challenge drug patents, and questions how far a generic firm should press.

An Nobel laureate in economics posts an editorial in the British Medical Journal challenges the belief that intellectual property rights promote innovation in Scrooge and intellectual property rights and proposes “medical prize fund” in place of patents.


The Scientist’s article The trouble with tech transfer examines the issues
impeding the proression of inventions from research laboratories to the marketplace. The vigorous discussion in the comments section complements the article quite well!

In the light of the mass layoffs of sales workers, Pharmamarketing asks and answers the question, Are Sales Reps Necessary?

Guest content from John Avellanet, managing director of Cerulean Associates:

As professionals affiliated with the biotechnology industry, we often forget that many of the struggles faced today have been solved before by other fields and industries. As Ambrose Bierce wrote, “There is nothing new under the sun, but there are lots of old things we don’t know.” The question is, where to look for inspiration?

In the 1970’s, the global automobile industry faced a huge push by consumers and regulators to improve quality and safety. Manufacturing costs skyrocketed. At the same time, up went oil prices, adding a third dimension to the problem: how to improve the fuel efficiency of cars while also improving safety and quality?

There were many strategies to tackle this complex problem (Total Quality Management, for instance), but Toyota found, and was the first to capitalize on, a simple, effective answer: following the Japanese principle of kaizen, continuous improvement, to its logical beginnings, Toyota management and engineers found that the sooner quality and safety were built into the process, the more costs declined. In fact, building quality, safety and efficacy into the product at the early concept, design stage was the most cost-efficient (here I use “efficacy” to capture the concept of fuel efficiency, but also features, passenger room and so forth). This then freed them to play with and innovate on the remaining elements such as style, handling and so on.

Admittedly, the days of the Corolla were numbered, but those early attempts provided Toyota the funding and marketplace stature to build today’s Lexus. In fact, the items that most executives at the time argued were massive hurdles for the industry – quality, safety, efficacy – are now bandied about as competitive qualities. Volvo does not make the most beautiful of cars, but surveys of Volvo owners repeatedly point out the top three answers for why they purchased the Volvo over all other options: safety, followed by efficacy and quality.

In my work helping executives at biotechnology, pharmaceutical and life science firms, I often hear attempts to rationalize away such a comparison with “Yes, but we are talking about hundreds of potential compounds in the early preclinical stage, so that’s not really applicable.” Yet automakers today routinely develop hundreds of concept cars and frequently go on to build many more prototype cars for road testing than any biotech or pharmaceutical firm has new treatments in clinical trials. In fact, the cars you and I will be able to buy seven to ten years from now are currently being tested (along with others that won’t make it) on raceways and simulated town streets and rainstorms right now in Michigan, North Carolina, Japan, Germany and so forth.

Lessons and analogies from other fields and industries can help us reframe the compliance challenges we face and point to ways to reduce costs, boost innovation and improve market success. Ultimately, the biotechnology and pharmaceutical firms that take the most advantage of these will be the ones dominating the industry 25 years from now.

If you’d like to read further examples and applications that might be more suited to the situation you face, I’ve made a number of my published articles available as PDF downloads in the Resource Library of Cerulean Associates.

I welcome your comments, suggestions or questions. Please feel free to contact me at any of the points either on the Cerulean Associates website or within my articles.

I look forward to talking with you.



Harvard’s Gary Pisano has recently published a book titled Science Business: The Promise, the Reality, and the Future of Biotech in which he assesses the performance of the biotechnology sector and, in finding it lacking, proceeds to recommend a series of suggestions to improve the fundamental architecture of the industry.

While I enjoyed the book and agree with many of the elements, I have some serious reservations about his preliminary analysis and his conclusion that the biotechnology industry has failed to perform. Read my critique and his response in the January edition of the Harvard Business Review.