Acadia Outsources Compassion and Math

On their quarterly call, Acadia Pharmaceuticals announced the pricing for Nuplazid, freshly approved by the FDA for the treatment of Parkinsonian psychosis (PDP). The price has been set at $1950 per month, about $23,400 per year. A quick scan of the atypical antipsychotic drugs that might be supplanted by Nuplazid in PDP indicates that they tend to be priced at about $900-1000 per month. The expectation had been that Acadia would exact a premium over the predecessors, but not to this degree: Acadia has roughly doubled the price of their competitors, figuring that, with Nuplazid the first drug to primarily target 5HT-2a receptors, and to be labeled for Parkinsonian psychosis, they can do as they please. Which they can. But this does bring us back to a topic discussed in NeuroPerspective and Neurogram+ in the not-too-distant past; “Why do they hate us?” (In this context, ‘us’ refers to the Pharma industry, ‘they’ refers to everyone else). This is why.
Sure, compared to the $84,000 per year originally cited for Solvadi, this does not trigger the same kind of sticker shock, though it should be noted that Sovaldi is curative for Hepatitis C, whereas Nuplazid provides relief of a specific symptom-cluster within a chronic neurodegenerative illness, and its use for many patients might be stretched out over years. Even if one considers full remission of psychosis to be the psychiatric version of ‘curative’, that only applies to 14% of Nuplazid users.
Semi-attuned to the spate of recent negative publicity around drug pricing, Acadia hastened to add that they would take steps to ameliorate the financial burden, reminiscent of other companies who claim that with discounts and rebates, that the list price isn’t nearly as onerous as it sounds–no one pays ‘retail’. But Acadia’s actual behaviors are likely to fall short of their purported promise.
Rounding off Acadia’s own estimates, 1/3 of patients will have commercial insurance, and Acadia says that they will cover their co-pay, albeit based on “coverage and circumstances”, implying some kind of means-testing. But setting that minority aside for the moment, roughly two-thirds are expected to be on Medicare D, and here it gets more convoluted. Acadia indicates that the co-insurance obligation for Medicare D patients will be in the 25-30% range, which at the low end, is about $6000 per year. That would be a huge burden for many, if not most, elderly patients with Parkinson’s. With this population, the majority of Nuplazid patients, Acadia plans to make donations to “charitable foundations” in the expectation that they will in turn provide monetary relief to patients being impacted by this sizable co-pay obligation. In other words, for two-thirds of the Nuplazid population, Acadia intends to turn over the cost-amelioration task to charities, outsourcing the task of alleviating what might well be an untenable burden for many elderly patients and their families. This presumes that such charities have the infrastructure and skillsets to do so, which they do not.
Let’s see how this would play out. For the sake of simplicity, let us suppose that Nuplazid might eventually generate in the neighborhood of one billion dollars in revenue per year. If two-thirds of patients are on Medicare, that is $660 million per year of drug cost attributable to that population, and the 25% co-pay obligation associated with that total comes out to…$165 million. Based on what Acadia has cited as their plan, in order to actually offset that out-of-pocket burden, Acadia would have to donate something approaching $165 million per year to charities who would in turn somehow funnel it to those patients in need. To be clear, they did not cite this figure, since they are making no revenue projections at this time, but based on the model that they presented as their approach to ‘easing the burden’, that’s how it would pan out: $165 million in charitable donations, somehow passed through some intermediary ‘charities’ to PDP patients and their families. We look forward to hearing from anyone who thinks this is going to happen, and how it would work.*
This is of course part of a much larger-scale problem: The American approach to drug pricing, where a sky-high list price is cited along with vague reassurances that the ‘real’ cost won’t be nearly so bad, turns the pharma industry into a giant used car lot. Recalling that CarMax’s corporate model did away with the smoke and mirrors, instead simply stating the no-haggle price for a car, we almost yearn for a DrugMax that would provide the same clarity in the pharma world. Like most of its peers, Acadia will exploit the lack of industry transparency, and it is this kind of gamesmanship, in the context of escalating prices and societal costs, that makes the American public skeptical that anything we say can be taken at face value, and buttresses the perception that the pharma industry operates primarily on the basis of greed. That is ‘why they hate us’, and turns this into one more step on the slow creep towards price controls. Acadia management probably figures that, as was the case with Sovaldi, they can milk the system until a competitor comes along, like Axovant’s nelotanserin. But there is another potential ‘side effect’: Given the population size, the FDA is certain to be more demanding when Acadia files for Nuplazid’s label-expansion into the huge Alzheimer’s market, and if the atmosphere around Nuplazid is tainted by media stories about the cost-reduction that wasn’t, and anecdotes of PDP patients financially strapped by the costs or doing without, that could come back to haunt Acadia.
Acadia can be semi-excused for buying into the double-speak and illogic, because they are on the receiving end as well. Case in point: Their European marketing application for Nuplazid will be delayed while they sort out what the EU wants in terms of a PIP for Nuplazid, because the PIP must be approved before the filing can be accepted. What is a PIP? It is the Pediatric Investigation Plan–the presentation of how pediatric testing would be done, or waivered. That’s right: Pediatric factors must be explicated to the satisfaction of European regulators before they will accept the filing for a drug for Parkinson’s, one of the least pediatric indications in all of creation. That kind of absurdity sets the tone, and the stage, for cynicism.
Unfortunately, Acadia took the bait, decided to push the pricing envelope as far as they can, and to make the problem of financial burden…someone else’s. Perhaps it is unfair to blame them for doing what everyone does, but at some point, somebody will have to break the mold, or else it will be broken and reshaped for us, and that outcome will not be to the taste or benefit of the pharma industry.
*Acadia was contacted with the questions of whether this correctly depicts their plan for Medicare D cost-offsets, and whether any charitable organizations had identified themselves as prepared to collaborate with them on this. No response was received.

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New Literacy Requirement for Physicians

“FDA has approved a brand name change for the antidepressant Brintellix (vortioxetine) to decrease the risk of prescribing and dispensing errors resulting from name confusion with the blood-thinning medicine Brilinta (ticagrelor). The new brand name of the drug will be Trintellix, and it is expected to be available starting in June 2016. No other changes will be made to the label or packaging, and the medicine is exactly the same.

Because of the lag time associated with manufacturing bottles with the new brand name, health care professionals and patients may continue to see bottles labeled with the brand name Brintellix during the transition period.

In a July 2015 MedWatch Alert, FDA warned that name confusion between Brintellix and Brilinta had resulted in prescribing and dispensing errors since Brintellix was approved in September 2013. Due to continued reports of name confusion between the two medicines used for very different purposes, FDA worked with Brintellix manufacturer Takeda Pharmaceuticals to change the drug’s brand name.”


(Albany, NY: May 3, 2016)
The New York State Board of Medicine has announced a new literacy test for physicians seeking to practice medicine in New York State

Multiple Choice Test for Medical Licensure in the State of New York:

Select the correct answer from the four choices:


1) These two drug names start with the same three letters, which means they can be substituted freely for each other, like herceptin and heroin
2) These two drugs start with the same three letters, but otherwise are different
3) These are names of towns in upstate New York; each has a Post Office, an Arby’s, and a gas station. They are indistinguishable, and can be substituted freely for each other, like Utica and Ithaca
4) These two drug names are indistinguishable, so Brintellix should be given a new name–something like Trintellix, or maybe Toronto

Correct answer: #2

Licensure candidates who chose #1: the DEA has some questions to ask you
Licensure candidates who chose #3: Your medical malpractice coverage has been terminated
Licensure candidates who chose #4: the FDA has a career opportunity for you

Ed. Note: Takeda/Lundbeck have already had a hard enough time establishing/differentiating Brintellix, no thanks to the FDA, which went against the recommendations of its own AC in rejecting the Brintellix label-expansion application.  Now they must, to some degree, start over. Isn’t it reasonable to expect physicians and pharmacists to be sufficiently attentive and literate that they can differentiate these two drug names? How dumbed-down does this system need to be?

Other Notes
Just as the May-June issue of NeuroPerspective was being released, the FDA granted approval to Acadia’s pimavanserin/Nuplazid, with the expected black box warning. While generally expected, it was still something of a relief to see the FDA follow through on its own stated willingness to grant approval based on one Phase III, and to see the Agency go along with the recommendation made by its own Advisory Committee. This interrupts a sequence of ill-considered and/or ill-communicated decisions announced over the past two months, vis-a-vis Newron’s Xadago, Takeda/Lundbeck’s Brintellix, and Catalyst Pharma’s Firdapse.

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A Fond Farewell to My Cali-Irish Lass

My Dearest Allergan:

The last few months have felt like a dream–you and I idling away the hours by the Irish Sea, picking out a spot for our new corporate cottage, singing the names of the staff we were going to keep, whispering the names of those to be laid off. Now we will have to comfort ourselves with what might have been. I particularly regret having left it to our corporate counsel to let you know the sad news–that it’s over. I should have had the courage to tell you myself. It probably felt terribly sudden and cold, it’s not how I wanted it to be, but I think you know it’s best for both of us.

You may be wondering–Was it all about the money? Is that why I am leaving you?  No, of course not. Well yes, that’s a big part of it, but not all. We come from different backgrounds, you and I, very different cultures. You being from Southern California, er I mean, Ireland, me from….well I’ve lost track at this point–it’s all very confusing. I’m not sure who I am now, and I don’t want to burden you with it all. To be honest, I’m not sure I ever really got over Astra, she still haunts me. I have a lot to think about, as does my Board–two failed engagements in two years, I just don’t seem to be good at the relationship thing.

As the Pfizer counsel probably mentioned, I am sending you some money–I know it’s not much, but at least it will help you with a fresh start.

There’s just one more thing. You deserve honesty, and you shall have it:  When you smile, your mouth kind of changes shape, but your eyes don’t move at all. Nothing. Nada.  It sort of creeps me out. You might want to dial back on the Botox, I think you may have overdone it.


Ian Read

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Questions and Answers Regarding Advisory Committee Membership

What is an FDA Advisory Committee?
Advisory committees provide FDA with independent advice from outsiders and political cover in the event that something goes wrong. The committees provide advice to the Agency, but actual decisions are made by FDA, because Advisory committee members are not always cognizant of the larger-scale political and regulatory issues attached to each application.

How does an individual become a member of an FDA advisory committee?
Just volunteer. FDA does not pay well, and since we retain the option of ignoring advice, membership offers an experience of learned helplessness. FDA does not provide reimbursement for the treatment of depression associated with repeated exposure.

What are the qualifications of an advisory committee member?
Persons nominated as scientific members must be technically qualified experts in their field and have experience interpreting complex data. While we would prefer for AC members to not have ties to industry, we have noticed that this requirement essentially rules out most candidates meeting the first criterion. The requirement has thus been changed to: Advisory Committee candidates should not be employed by the sponsor of the drug under consideration-at least, not yet.

Can health professionals serve as consumer representatives?
Whatever. We don’t particularly take consumer or patient representatives seriously.

Where are the advisory committee meetings held?
The beautiful Bethesda/Rockville area, which is convenient to many national landmarks, sporting events, and fine restaurants in Washington DC.

Are advisory committee members paid?
As we said, yes, but not well.

How often are advisory committee meetings held?
As seldom as possible, but as often as needed to avoid the appearance of unilateral decision-making.

What should prospective members know about the role?
There are certain areas of regulatory concern that may cause FDA’s adherence to AC recommendations to be limited. Just to take one potential issue, chosen at random, as an example:
FDA has historically been very concerned about the potential misuse of a drug approved for the treatment of cognition. It is one thing for patients diagnosed with dementia to receive a minimally, transiently useful pharmacologic product, but if an effective procognitive drug were to be made available to broader segments of the population, FDA continues to be concerned that such an approval might trigger a tidal wave of abuse in the service of cognitive enhancement, with serious social consequences. Where would we be then? Overly preoccupied with beating Deep Blue at chess, Go, or poker? Contemplating the finer points of culture, philosophy, and existential angst? We’re not France. And even worse, there would be no one paying attention to food production, sewer systems, air traffic control, and…regulatory oversight. In other words, the end of civilization and employment as we know it. FDA values a paced, evolutionary approach to societal change. You don’t. So if you vote 8-2 (just to pick a number at random) for the approval of a label-extension covering cognition, for a drug owned by companies that are not even based in the US, do not be surprised if we ignore you. Get over it. The buck stops here, and so does innovation. We’re FDA–this is what we do.

(Ed. Note: For those not following the topic, this is in reference to Brintellix)

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Forum and CIAS

Forum Pharmaceuticals (formerly EnVivo) announced today that their two Phase III trials of FRM-6124 in CIAS (Cognitive Impairment Associated with Schizophrenia) failed to hit their co-primary endpoints.   No details were provided, but there apparently are signs of a treatment effect on subgroups and secondary endpoints–but the placebo effect was apparently outsized and had a devastating impact on the ability to demonstrate a signal. This was the major nicotinic alpha7 drug ‘still standing’, with several competitors having demised over the years, and Merck/Bionomics and Sunovion much earlier stage in their development programs. Having had their Alzheimer’s Phase III trials torpedoed by an unexpected GI adverse event in a small number of patients, FRM-6124’s prospects were completely dependent on the CIAS trials, and these results are a profound disappointment from a program NIR has long seen as one of the more promising late-stage CNS projects, particularly given the success shown in Phase II.
One key question yet to be answered is whether the trial failed, or the drug failed. A very high placebo rate could constitute a trial failure, and Forum’s post-mortem assessment will have to include a review of their 200+ trial sites, to see if there were any high-enrollers with particularly elevated rates of placebo responders. Sites that choose to accentuate speed over enrollee quality have been known to sabotage studies, we are curious as to whether that may have occurred here.
The bottom-line question now is whether there is a future for FRM-6124, and indeed, for Forum. Forum/EnVivo has enjoyed the luxury of being funded solely, and generously, by Fidelity. But Abigail Johnson does not have the loyalty to neuroscience that her father did, and over $850 million later, we strongly doubt that Fidelity will put any more resources into Forum. Indeed, Forum’s CEO Deborah Dunsire, in the FRM-6124 press release, made reference to Forum’s need to “evaluate a potential path forward, if any.”  Trying to sort out how to reduce the placebo response rate and identify potential responder populations for the CIAS program will be time-consuming, expensive, and far from guaranteed to pay off. Developing an algorithm predictive of GI vulnerability in the Alzheimer’s indication will have a tough time of passing FDA scrutiny. We do not think Fidelity will have any appetite for funding either of these processes, and the question is begged as to whether anyone will. Forum had already laid off most of its R&D staff, and the betting was that, had the CIAS trial succeeded, Fidelity would have sold Forum. Now, the prospects for a sale are greatly diminished, though perhaps not completely absent. Might there be a company willing to acquire FRM-6124 in a backend-loaded deal where Fidelity would receive significant payments only if there was eventual success? That unlikely scenario would be completely dependent on what is seen in the data-mining now starting–whether a case can be made for a signal in a major subgroup that would be likely to manifest if the placebo effect were better controlled. In the meantime, the kind of vital treatment paradigm shift that neuroscience must begin to produce remains elusive.

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Kerrisdale Provides Less than Sage Advice

On March 23, a number of NeuroPerspective subscribers and sources forwarded to us a ‘report’ prepared by Kerrisdale Capital on SAGE Therapeutics. Subheaded ‘Overhyped Lead Drug Headed for Failure,’ it gave the illusion of a detailed, seemingly well-researched critique of SAGE Therapeutics and SAGE-547 in Super-Refractory Status Epilepticus. However, even after a cursory review, as we noted to those correspondents,  this report appeared to be slanted against SAGE, based on several false premises. With other obligations at hand, we did not assess the report more thoroughly until today: The more we have delved into it, the meticulous detail with which the report was prepared, far from clarifying the issues at hand, clearly appears to be in  the service of camouflage, not clarity. A few points should be made:
1) Mechanism: Kerrisdale claims that SAGE-547’s mechanism of action is not dissimilar from that utilized by other agents deployed in the treatment of SSRE, citing binding-mechanism reports. Predicting the clinical impact of psychotropic drugs based on in vitro binding studies has often been a fool’s errand:  Any number of companies have claimed that the addition or deletion of activity at some receptor subtype or another would be predictive of its clinical impact on certain clinical symptoms or side effects, and such predictions often fall short (e.g. vilazodone’s profile was predicted by its developer(s) to offer less impact upon sexual functioning in patients taking it for depression–it has not turned out that way). The clinical ‘truth’ of a putative mechanistic profile is ultimately only determined via human efficacy testing. Kerrisdale’s claim that SAGE-547 “is just not that special” because it relies upon GABA-A receptor potentiation, including an effect upon extrasynaptic receptors, comes close to being irrelevant. Receptor binding is not a binary, yes or no proposition–and the pattern and duration of inhibitory effects constitutes a complex domain. The relative value of a drug in this category can only be determined by its effect in the clinic, not by putative binding profiles.
One other note, regarding ‘duration:’ Kerrisdale makes reference to some cases of eventual improvement that appeared temporally incongruent with SAGE-547’s half-life, as if the former is incompatible with the latter, and the drug cannot have had an impact eventual weaning from anesthesia. The relationship between half-life and clinical effect is nowhere this clearcut, one recent example is the use of ketamine/esketamine in depression studies: Janssen’s recent Phase II showed that patients experienced antidepressant effects up to eight weeks following the last administration, though esketamine’s half-life is measured in hours.
2) The Treatment Population: Kerrisdale stakes the bulk of its case on the premise that SAGE-547 clinically does not do anything that other ‘third-line’ drugs cannot do. They provide a cascade of citations from the literature intended to make the case that drugs like midazolam and levetiracetam can also rescue patients from status epilepticus–citing meta-analyses that report a “64-68% base rate” of control provided by other GABAergic third-line therapies, albeit in populations that included both refractory and super-refractory cases. Kerrisdale claims that many of the ‘refractory’ patients had a long-enough period of ICU treatment that they should be considered super-refractory, and thus a suitable comparison group vis-a-vis SAGE’s treatment population. This is specious: Kerrisdale here is defining SSRE as based on duration of status epilepticus, whereas SAGE’s enrollment criteria in Phase II required that patients be treatment-refractory: “the presence of one or more breakthrough seizures>6 hours after initiation of the continuous IV AED/third-line agent (e.g. pentobarbitol, midazolam, propofol.” In other words, not responsive to the very drugs that Ferrisdale claims are just as efficacious as SAGE-547. The Phase III enrollment criteria includes these ‘third-line’ treatment-refractory patients, but adds patients who have been admitted to an ICU but have not yet been given a standard third-line treatment.
3) Placebo comparator:  Kerrisdale predicts that the SAGE-547 Phase III trial will fail, based on the premise that it is not really different from other third-line drugs. But this trial does not involve an active comparator, SAGE-547 is being compared to a placebo, which even Kerrisdale would have to admit, has a different binding-profile and mechanism than does SAGE-547. Indeed, the Phase III inclusion of patients not yet tried on a third-line drug means that SAGE-547 has a wider avenue to success, not restricted to patients so ‘super-refractory’ that even the standard treatments have failed. This argument is not even logical.
4) Speaking of illogical, Kerrisdale complains that SAGE-547 does not correct the underlying pathology accounting for the SSRE, that it is a “band-aid.” No claim has ever been made that SAGE-547 is supposed to be curative. The endpoint of the trial is to provide at least 24 hours that are seizure-free after being weaned. This argument is the proverbial ‘red herring,’ completely irrelevant to the trial, and the goal of treatment.
5) Size of population: Kerrisdale claims that the incidence of SSRE is far lower than SAGE claims. Based on Kerrisdale’s performance on points 1-4, their credibility is not to be assumed. But in any event, this is something that will be assessed when SAGE-547 comes to market, and we would expect that if it is successful in patients refractory to other third-line agents, that it would become the standard of care. Kerrisdale will have exited its short position two or three years before we will have any sales data.

All in all, the more thoroughly we read Kerrisdale’s report, the less convincing it became. It reminds us that the 1980s rock band ‘Cheap Trick’ has recently made a comeback of sorts–Kerrisdale’s report exemplifies the kind of short-selling cheap trick that never went away, and it provides a vivid illustration of how a shower of informational chaff can be used to distort rather than illuminate. While we are optimistic about SAGE-547’s Phase III prospects in SSRE, extrapolating success in a small Phase II trial to a (relatively) large Phase III study is not to be automatically assumed–we look forward to seeing the data.

NI Research does not have a position in SAGE Therapeutics. We have no relationship with SAGE, other than SAGE does subscribe to NeuroPerspective, as do most CNS companies. We did not contact SAGE Therapeutics in the preparation of this note, because it first of all was not necessary, and secondly, SAGE is in the awkward position of being a public company conducting a pivotal trial for the medication in question.  Their ability to respond fully is thus somewhat restricted, an asymmetric position that short-sellers try to exploit.

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Valeant Needs Autopsy, Not CPR

Neurogram/August 2015: “This brings us to Valeant Pharmaceuticals. We despise Valeant, a company that routinely treats acquired companies like poachers who have machine-gunned an elephant in the veldt, stripping the tusks while leaving the carcass to rot in the tropical heat.”

Neurogram/October 2015: “Valeant’s price-gouging (they say they don’t actually gouge, they raise the price astronomically, and then give discounts….right)  left them swimming in the same cesspool as Turing Pharma, and now today, an activist short seller, Citron Research,  issued a report that charges Valeant with operating two specialty pharmacies as a way of camouflaging their actual drug-sales activity flow. To which Bill Ackman, head of Pershing Capital, and formerly in league with Valeant in the attempt to bludgeon Allergan into accepting its hostile takeout bid, responded by buying around $200 million more of Valeant’s stock…….To be fair–they’re all vipers. There isn’t a hero to be found in this motley but extremely overpaid crew. We do not know where the truth lies in the relationship between Valeant and its two specialty pharmacy progeny/prey, and we do not particularly care. It all adds up to more collateral damage to the reputation of the pharma industry, which does have its share of vipers, but nothing like this. This is a reality show from Hell: Lock the lot of them in an underground bunker, and let the cameras roll. We will not be watching.”

And now the final episode is at hand for Valeant. The CEO has finally been ousted, and the CFO officially outed as having engaged in “improper conduct.” In other words, the vipers are shoving each other out of the getaway car in the hope that the pursuers will be distracted from the fact that Valeant is a corpse masquerading as a company. However, the CFO refused to resign from the BOD, while William Ackman has joined it. Those BOD meetings could constitute Reality TV at its hyperbolic worst, and we know just the right orange-haired host for it.

One other thought: William Ackman was the co-conspirator who tried to coerce Allergan into accepting Valeant’s buyout bid, Allergan of course finally turning to Pfizer. Allergan shareholders should meditate on that for a moment–Ackman tried to give them Ebola, and they ended up winning Powerball. If that doesn’t spur them into fervent religiosity, nothing ever will. The fact that Ackman is now going to help helm Valeant’s final descent into Hell only confirms the amorality of the cause–and that no White Knight will emerge to somehow pull the company out of this death spiral.



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