Forest Labs (NYSE:FRX) has done very, very well with Lexapro (escitalopram) over the years. They're a comparatively small company, and their collaboration with Lundbeck (OTC:HLUKY) (also a comparatively small company) in the antidepressant field has been the biggest event in their history.
Lexapro is the pure enantiomer of the earlier Lundbeck drug Celexa (citalopram), and it's been a very successful follow-on. (For a nasty spat over generic production of citalopram, see here). I'm generally not too keen on the follow-up-with-the-single-enantiomer strategy, I have to say. In general, I think it's slowly disappearing from the world as regulatory agencies look down on racemic mixtures. (I've never worked on a program myself where we seriously considered taking a racemate to the clinic - we always assumed that we'd end up developing a single enantiomer).
The New York Times has an article out detailing some of Forest's marketing plans, as revealed in documents before a Senate committee. Some of what the article has to say I agree with, and some of it I have to raise an eyebrow at, and we'll get to both of those. First off, in an area as large and competitive as antidepressants, I don't think that anyone should be surprised at what was in Forest's plan: lots and lots of lunches for physicians' offices, plenty of continuing medical education lectures (with plenty of food), and so on. One line shows that the company budgeted $34.7 million dollars to pay 2,000 physicians to deliver about 15,000 talks on the drug to their colleagues.
The Senate seems to be shocked at all this - well, pretending to be shocked, because no national politician can ever really be surprised at any way that money is used to influence anyone's decisions. But I'm not shocked, either. Leaving aside (just for a moment) the question of whether drugs should be promoted this way, the fact is that they are promoted this way, and have been for a very long time. And breaking down that lecture figure, that means a bit over $2,000 per lecture, and we don't know if that figure is supposed to cover just the honoraria for the speakers, or the whole cost of the lectures. Even if we assume the former, that comes to nearly eight lectures per physician per year, giving each of them about $17,000, pre-tax. Compared to the cost of advertising in the medical journals, general-interest magazines, or especially on television, that probably represents an excellent return for the money.
And Forest has been spending plenty of it. The article mentions that Vermont, for example, found that Forest (despite their size) was outspent in that state only by Lilly (NYSE:LLY), Pfizer (NYSE:PFE), Novartis (NYSE:NVS), and Merck (NYSE:MRK). Considering that those companies have many more drugs to sell than Forest does, that's an impressive figure. Of course, the only reason you spend money on marketing is to make even more of it back in sales, and they've certainly been doing that, too.
There are several questions here, and perhaps it's best to take them one by one. First off, is Lexapro worth what people (and insurance companies) are paying for it? The snappy economic answer is that of course it is, since that's the price that's willingly being paid, but let's talk utility instead. It does seem to be a good drug, arguably better than many of the others. It's been run head-to-head with Cymbalta (duloxetine), which is no poor performer itself, and shown to be superior. Earlier this year, a Lancet article analyzed 117 controlled trials and found that there were clear clinical differences between the various antidepressants, and that Lexapro and Zoloft (sertraline) stood out as better than the rest.
The article recommended starting with the latter in new patients, I should note, and sertraline's now generic. I think that Forest's battle in the market is both against their similarly expensive competitors (where I think that they can claim to have an edge) and against cheap sertraline, where they may well not. (Update: and against their own (now generic) racemate - I'm digging into that comparison, and it'll be the subject of a follow-up post.) That said, depression is a famously heterogeneous field, and patients often have to try several drugs before somethings works, for reasons that are unclear. So yes, overall, I think that Lexapro is a useful drug, and that patients are getting benefit for their money.
The New York Times article is rather disingenuous on this point, by the way - you'd never know from it that there were differences between antidepressants, since they treat Lexapro and Prozac as interchangable, and you'd never know that there was evidence that Forest's drug might well be near the top of the list.
Next question: is Lexapro worth what Forest is spending to promote it? That question also splits into two, economically, depending on what we mean by "worth". As in the price question, from a strictly accounting perspective, we have to presume that Forest is seeing a financial benefit from their marketing activities; marketing does not run at a loss, not for long, it doesn't. And from a utility/societal benefit perspective, if Lexapro really is superior to most of their competitors, then I think the company is justified in making that case as loudly as they can.
Now we get to the tough one: are Forest's marketing activities appropriate or ethical? The arguing can now commence, because this is where we try to figure out what "as loudly as they can" actually means. I think the industry would be better off if there were less of an arms race in the marketing area. (Update: just to pick one benefit, it would make us look, in general, less sleazy, which is not to be underestimated). Even though marketing doesn't run at a loss, the return from it could be still higher if it were less expensive to do. Huge sales forces are expensive, and one of the reasons the sales forces are so big is that the competition's sales forces are so big, and so on. It's hard for any one company to climb down from its position, just from a game-theory point of view, so the most likely way for this to happen is through across-the-board restrictions on marketing, as enforced by the FDA, the FTC, or by physicians themselves. (I should mention, though, that there has been a voluntary retreat in the area of brand-covered swag.) We're already seeing this pendulum swing back in the last few years, and it's fine with me if the process continues for a while longer. Doctors are perfectly free to close their doors in the faces of drug reps, and if I were in their position, I'd be tempted to do just that in many cases.
So if we come back around to that Times headine, it reads "Document Details Plan to Promote Costly Drug". And to that, I can say yes, it's a costly drug, set as high as the company thinks that people will pay for it, and to a level that they think they can make the most money with before its patent expires. And yes, Forest has a plan to maximize those profits, and if I were a shareholder (I'm not), I'd be righteously steamed if they didn't. And they did indeed write that plan down, so there are plenty of documents. I'd rather, myself, that the plan looked different than it does, and that's the way the world seems to be heading. But no matter what regulations come into force, there will always be plans to promote things that cost money.