[Ip-health] Wall Street Journal: Merck's New AIDS Drug Has Promise -- if It Isn't Too Pricey

[Thiru Balasubramaniam]

Merck's New AIDS Drug Has Promise -- if It Isn't Too Pricey
By SARAH RUBENSTEIN
October 11, 2007; Page B1

Merck & Co. could break new ground on the AIDS-fighting front this week
with the Food and Drug Administration's expected approval of Isentress,
a new type of drug that could be especially useful for patients who no
longer respond to many existing treatments. Yet despite the continuing
need and market for HIV treatments, and doctors' enthusiasm about the
drug's prospects, it's no sure thing that Isentress will pay off for
Merck.
[Costly Cocktails]

A major factor is pricing, yet to be determined and especially
important because of the recent arrival of several other drugs to fight
HIV, the virus that causes AIDS. Pfizer Inc.'s Selzentry, which won
regulatory approval this summer, costs about $10,600 a year wholesale.
Roche Holding AG's Fuzeon, which came out in 2003, costs about $24,500
a year wholesale, much higher than many other AIDS drugs. And Johnson &
Johnson came out with Prezista last year and may win approval of
another HIV drug in early 2008.

Merck declines to discuss pricing ahead of an FDA decision. But if the
company were to price Isentress at the high end of the range, "there's
no way the system could handle that," says Lanny Cross, a former
director of the New York AIDS Drug Assistance Program and a consultant
for the National Alliance of State and Territorial AIDS Directors.

Martin Delaney, a longtime AIDS activist, who has participated in price
negotiations with Merck on behalf of a group called the Fair Pricing
Coalition, says the company has shown sensitivity to patients'
financial needs in the past. But he says Merck officials have been
"arguing they need to get profitability." He says Merck has indicated
it wants to price Isentress in the range of relatively new AIDS drugs
such as Prezista and Bristol-Myers Squibb Co.'s Reyataz, both of which
cost around $9,500 a year wholesale, according to their makers. He also
says Merck has told him it has spent close to $2 billion on HIV
research.

Isentress arrives at a time when Merck has just one other HIV drug in
clinical trials, at the earliest stage of such testing. And it is just
weeks after Merck's leading experimental AIDS vaccine collapsed in a
clinical trial. Isentress represents a chance for Merck to show it is
still a major player in this arena despite a years-long gap since it
last brought a new drug to counter HIV to the market. Some doctors are
excited by Isentress's potential, in particular because the pill
represents a new way to attack a virus that has managed to develop
resistance to many other drugs.

An advisory panel of outside medical experts last month said the data
support FDA approval of Isentress for patients who have failed
treatment with other HIV drugs. The agency isn't required to follow
such panels' advice, but usually does.

Merck may find it difficult to sell Isentress at the highest price
possible when many public-assistance programs that help pay for HIV
treatments are experiencing fiscal strain. In the 2006 fiscal year, 20
out of nearly 60 AIDS Drug Assistance Programs saw their budgets
decrease, according to the Kaiser Family Foundation, a nonprofit
health-policy research group in Menlo Park, Calif. Such programs bought
drugs for nearly 100,000 HIV patients in 2006 and provided insurance
coverage for thousands more, according to Kaiser.

Merck declines to specify how much it spent to develop Isentress or to
research other HIV drugs, beyond saying it has spent "hundreds of
millions of dollars" on such work. "We believe [HIV research] is the
right thing to do," says Robin Isaacs, the Whitehouse Station, N.J.,
company's executive director of infectious-disease clinical research.
"We are hopeful that will translate into return on investment for our
shareholders."

While Merck is viewed by many in the AIDS community as one of the major
drug makers most committed to HIV research, revenue from such products
currently represents a modicum of Merck's total revenue, which amounted
to $22.64 billion last year. The company drew a combined $327 million
from sales of Crixivan, an HIV drug from the mid-1990s that is no
longer used widely, and Stocrin, which Merck sells overseas.

Isentress could provide a bottom-line boost, though it doesn't carry
the potential of some major Merck products such as asthma-drug
Singulair, which had $3.58 billion of sales last year. Credit Suisse
drug analyst Catherine Arnold estimates Merck's annual sales of
Isentress could be $500 million world-wide by 2012, and likely more if
used in a broad swath of patients. Merck is an investment-banking
client of Credit Suisse.
[Top Selling Treatments]

Another factor influencing Isentress's prospects is whether doctors
will prescribe it for patients in early stages of HIV treatment. The
FDA advisory panel debated how early in a patient's treatment to
approve Isentress use, given that most patients in Merck's trials had
used a number of drugs already. It will be up to the FDA to make that
determination -- though doctors would be permitted to prescribe
Isentress "off label" at any point in treatment.

About two-dozen HIV drugs are now available, most of which block two
enzymes that HIV uses to replicate in the body: protease and reverse
transcriptase. Isentress, known generically as raltegravir, would be
the first drug on the market to target a third enzyme -- integrase --
that helps the virus insert its DNA into that of human cells.

Because HIV mutates quickly to outwit drugs, cocktails of three
medications are typically used to simultaneously attack the virus in
different spots. Patients tend to change drugs as their virus adapts.
Isentress would be taken along with other drugs.

Merck's late-stage studies of Isentress involved patients who had been
receiving HIV treatment for a median of 10 years, had virus resistant
to at least one drug in each of three major classes of HIV drugs and
showed evidence the virus was continuing to replicate in their bodies.
In other words, they were already sick or in danger of becoming sick
soon.

"Since this drug seems to be very effective and pretty well tolerated,
I think [there is] potential for it to move in and take territory" from
some older drugs, says Judith Feinberg, a leader of the AIDS
clinical-trials unit at the University of Cincinnati College of
Medicine who served on the advisory panel.

However, she said some doctors may be uncomfortable prescribing
Isentress more broadly until further studies are complete. Merck is
currently conducting late-stage Isentress studies in patients who are
new to HIV treatment. The company expects to have the results toward
the end of 2008. Dr. Feinberg says she had no ties to Merck at the time
of the panel hearing but has since agreed to give talks sponsored by
the company.

Isentress will be used principally in "patients who have tried a whole
raft of drugs," says Daniel Kuritzkes, director of AIDS research at
Brigham and Women's Hospital in Boston, who consults for Merck and
other HIV-drug makers. However, "for patients who have earlier stages
of disease, there will be some tendency to hold off because it's so
useful in patients with extensive treatment experience."

Another potential complication is that Isentress is taken twice a day,
while some new patients take a once-a-day pill called Atripla that
combines three drugs. That could make it tougher to get patients to
take Isentress from the beginning.

While Merck has little else for HIV in clinical trials,
research-and-development chief Peter Kim says the company is committed
to pursuing HIV treatments, and continues to do research related to the
integrase enzyme.

"We really do think that this drug-resistance issue is going to
continue to be a significant unmet medical need," Dr. Kim says.

Write to Sarah Rubenstein at sarah.rubenstein@wsj.com


---------------------------------
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org