By Ken Wells and Shannon Pettypiece
March 5 (Bloomberg) -- George Demetri had witnessed countless near-death experiences in his career as a cancer doctor. This time, the life of a drug was on the line.
It was called SU11248, and Pfizer Inc. had just acquired the company developing it. Tumors were shrinking in two thirds of the digestive tract cancer patients in the clinical trial Demetri had been running since February 2002. One dying man’s malignancy had stopped growing so suddenly after five doses that it was a “miracle,” the oncologist said.
“Interesting parlor trick you’ve got there, but this isn’t a market,” he said Pfizer executives responded when they learned of the results. The trial’s patients had a type of cancer accounting for less than 1 percent of new U.S. cases diagnosed every year. “We are probably going to shut this down,” he said they warned.
Still, a Pfizer official agreed to accompany him to a December 2003 meeting with U.S. Food and Drug Administration regulators, who were encouraged by the data and sanctioned a second, larger trial. “Credit to Pfizer for realizing it had a winner,” Demetri said. Company spokesman Chris Loder declined to comment on the doctor’s recollection of events.
In January 2006, Sutent became the first treatment simultaneously approved for two cancers: gastrointestinal stromal tumors, or GIST, and renal cell carcinoma. A pill that almost landed on the scrap heap of medicine has, according to New York-based Pfizer, since generated $2.6 billion in sales.
‘It’s Not Sustainable’
Sutent is part of an explosion of treatments that attack cancer at the molecular level, holding the promise of turning intractable malignancies into chronic diseases like diabetes or HIV. Targeted therapies are already extending life -- and adding to the cost of end-of-life care, which in the case of Sutent could be on the order of $48,720 a year.
The story of the drug, which took 15 years to get from theory to therapy, shows why such medicines, which have limited periods of effectiveness, are so expensive that some governments resist paying for them. On the advice of the British National Institute for Health and Clinical Excellence, the U.K. National Health Service refused for three years to buy Sutent for its patients. The price, the institute decided in 2006, was simply too high for the amount of time it bought.
“We are all worried that it’s not sustainable,” said Demetri, 53, director of the Ludwig Center at the Harvard University-affiliated Dana-Farber Cancer Institute in Boston, in an interview. “Ultimately, our country may say, ‘OK, we can have these expensive cancer drugs or we can have vaccines for our kids -- what do you want?’”
Just 29 Days
For those who can afford a pill with a retail price of about $200, or whose insurer will cover it, Sutent is a life extender. The metastatic cancer of GIST patients on Sutent was held in check for about 21 weeks longer than that of patients who began a clinical trial on a placebo, according to Pfizer.
While about a third of those with GIST who switch to Sutent get no benefit, the drug has been a lifeline for thousands, Demetri said, often buying enough time for a new medicine to roll out of the targeted therapy pipeline.
Terence Foley, a musician and teacher living in Philadelphia, was one for whom it offered no benefit. A combination of Genentech Inc.’s Avastin and Bayer AG’s Nexavar helped keep his kidney cancer at bay for 17 months, but he died 29 days after his first dose of Sutent.
A Grandson’s Birthday
“I didn’t see it coming,” said Keith Flaherty, 39, a protégé of Demetri’s who was Foley’s oncologist at the time of his death in December 2007 at age 67. Why didn’t Sutent extend his life? Perhaps, Flaherty said, his patient’s tumor was made up of preponderance of cells that were Sutent-resistant.
Susan Farmer was a different case.
Sutent worked for the retired Rhode Island public television executive, who has fought metastatic GIST for seven years with what doctors call daisy chaining. When her malignancy no longer responds to a treatment, she switches to another, moving from one targeted therapy to the next to the next. She took Sutent, the second in her chain, for 18 months.
“I am alive because of these drugs,” said Farmer, 67. She credits Novartis AG’s Gleevec, the first, for allowing her to see her second grandson born in 2005. Sutent kept her well for his fifth birthday.
The company that developed Sutent, Sugen Inc., got its start in Redwood City, California, in 1991. Cancer treatment at the time had been largely unchanged for decades. Doctors bombed tumors with a toxic chemical mix and hoped for the best. They rarely got it, and patients suffered chemotherapy side effects including hair loss and debilitating nausea.
A Kinases Race
The idea propelling Sugen had been postulated 20 years earlier by Harvard Medical School’s Judah Folkman, who became director of vascular biology at Children’s Hospital Boston. His theory was that malignant solid tumors depended on a genetic corruption of angiogenesis, the blood-vessel building process. Shut down angiogenesis, his thinking went, and the tumors would starve for lack of blood.
By 1989, scientists had identified a protein -- known as a kinase -- as the primary driver of angiogenesis: vascular endothelial growth factor, or VEGF. The discovery set off a race to isolate others and develop inhibitors.
One of Sugen’s founders, Axel Ullrich of Germany’s Max Planck Institute of Biochemistry, had cloned human insulin as a researcher for South San Francisco-based Genentech. Ullrich, now 66, also helped discover the gene HER2, thought to be responsible for runaway cell replication in some cancers.
Gen for Genetics
His partner was Joseph Schlessinger, then head of the New York University Medical School pharmacology department and now director of Yale University’s department of pharmacology. Schlessinger, 64, did research at Rhone-Poulenc Rorer Inc. before it became part of Sanofi-Aventis SA, and worked on the technology that led to ImClone Systems Inc.’s colon cancer treatment Erbitux and other drugs.
The company was named after them: S for Schlessinger and U for Ullrich, followed by gen, for genetics.
Sugen’s first chief executive officer was Stephen Evans- Freke. He had raised more than $600 million for Thousand Oaks, California-based Amgen Inc., and other biopharmaceutical startups, according to the Web site of Celtic Pharma Management LP, a Hamilton, Bermuda-based private-equity firm where Evans- Freke is a managing general partner. Evans-Freke pulled together $2.5 million in venture capital for Sugen, which raised $20 million when it went public in 1994.
$100 Million a Year
The hunt for kinase inhibitors was slow and expensive, Ullrich said in an interview. For one thing, all the kinases had to be identified, which Sugen did by building a “kinome,” mapping the 500 or so that inhabit the body.
Another challenge was that kinases exist at the core of cellular biology, sharing space with adenosine triphosphate, or ATP, the very engine of intracellular energy.
“The worry was that you couldn’t drug these kinases without shutting down every energy-generating process in the body,” Demetri said. “You’d kill people faster than the disease would.”
A solution required designing drug molecules so precise they could slip into the pockets of specific kinases without interfering with ATP. Sugen scientists bombarded cancer-driving proteins with synthesized chemical compounds to figure out which of them showed promise as kinase inhibitors.
By 1998, Sugen was “burning through about $100 million a year,” and running out of money for the clinical trials that are fundamental to bringing a drug to market, according to Peter Hirth, who was president at the time.
Betting on VEGF
Pharmacia & Upjohn Inc., based in Bridgewater, New Jersey, stepped in with the cash in 1999, buying Sugen for $650 million.
Genentech, acquired last year by Roche Holding AG, had shown that targeted therapy could be a commercial success after FDA approval in 1998 of the metastatic breast cancer drug Herceptin. It attacks the HER2 gene, the one Ullrich helped find, and was the first kinase inhibitor on the market.
In May 2001, Novartis, based in Basel, Switzerland, secured FDA approval for Gleevec, which worked by knocking out the main molecular driver in chronic myeloid leukemia. Genentech was by then in trials with what it would call Avastin -- used today against five cancers -- and early results indicated it would prove that VEGF inhibitors could thwart angiogenesis.
Sugen’s bet was on targeting VEGF, and of the 50,000 compounds scientists threw at it in the lab, exactly three seemed promising, according to Ullrich and Hirth.
A Dirty Inhibitor
One of the three -- christened SU5416 because it was the 5,416th substance tried out -- was given in 2001 to 350 colorectal cancer patients. So few responded that the trial “failed statistically,” according to Ullrich.
The scientists concluded SU5416 wasn’t soluble enough to slip with adequate dosage into its molecular target. They turned to SU11248, the 11,248th of the compounds tested, and tweaked it. The adjustments “made it less specific,” and SU11248 went after VEGF and also as many as 200 other kinases, Ullrich said.
Because protein kinases regulate many normal cell signaling functions, not just those driving cancer, the drug might block healthy activities, too, Ullrich said.
“Nobody was sure they wanted a dirty kinase inhibitor like SU11248,” Ullrich said.
Then Sugen tested it in a 2002 “basket trial,” so named because people with a variety of cancers took part. SU11248 was sent to oncologists worldwide, and in what Ullrich called a “lucky accident” a Paris doctor gave it to three kidney cancer patients. Two “had outstanding responses,” he said.
The Lipitor Company
The basket trial occurred before Pfizer closed its $58 billion acquisition of Pharmacia in April 2003. Pfizer, which disbanded Sugen as a unit, decided to finance trials focusing on renal patients. Demetri was wrapping up his clinical evaluation of SU11248’s ability to target kinases driving GIST for patients who had run out of treatment options.
After Pfizer learned about his patients’ “spectacular” results, Demetri said he was quizzed on his estimate that the market for the drug would be only a few thousand patients.
“A few thousand? Look, we’re the Lipitor company, we’re looking for a few million,” he said Pfizer executives told him. Lipitor, Pfizer’s cholesterol pill, is the world’s top selling drug with more than $11.4 billion in 2009 revenue.
At the December 2003 meeting, FDA officials wouldn’t accelerate the SU11248 approval process, because standard scans didn’t show tumors were shrinking definitively enough, Demetri said. Pfizer agreed to fund placebo trials.
A Vampire Cancer
The drug would be given to two-thirds of a group and sugar pills to the rest -- rare in oncology where lives are on the line. The FDA agreed that sugar-pill patients whose tumors grew would be given the real drug. The trial started in January 2004.
Within a year, every placebo patient had been switched because of “staggeringly statistically positive” results, Demetri said. Tumor growth in those taking SU11248 halted for 27 weeks compared with six weeks for those on sugar pills, according to FDA data.
For Farmer, the trial’s success meant more life.
Farmer, who served two terms as Rhode Island secretary of state, was diagnosed with GIST in October 2001 after an abdominal tumor burst and hemorrhaged. A surgeon removed the growth -- it was “about the size of a shot put,” she recalled -- but by January 2003 the malignancy had spread to her liver.
Invincible to most treatments, GIST was known as a kind of vampire cancer whose cells “have an anti-death pathway turned on,” Demetri said. “They don’t know how to die, which is why chemotherapy doesn’t work.”
‘Heart Flutters’
Doctors began building Farmer’s daisy chain with Gleevec, which shrank her liver tumors within a month of her first dose in February 2003. Side effects included puffy eyes, muscle cramps, diarrhea “and chemo brain,” she said. “I thought I was getting Alzheimer’s.”
A scan in April 2008 showed two of the largest growths were active once more. Gleevec’s effectiveness had run out.
So Farmer started on Sutent. This time, her teeth became so sensitive she couldn’t brush. Eating sugar hurt them. She couldn’t catch her breath.
“I got heart flutters,” she said. “I got headaches. It hurt to talk. One day I just sat there with my Sutent in my hand saying I can’t possibly have one more of these things. It may give me one more day of life, but it felt like death. I made the decision I was just going to stop and not take it.”
She changed her mind after a scan showed the tumors shrinking once more.
Every Customer’s Premium
Her dose was reduced, and the side effects abated. The cancer didn’t grow again until last October, when Sutent was replaced with Novartis’s Tasigna, developed as a Gleevec backup and approved in November 2007.
Should Tasigna fail, two treatments in clinical trials seem promising, Farmer’s doctors have told her. She said she would be willing to keep the daisy chain going.
For people who have private health insurance like Farmer’s or who qualify for Medicare, the tax-funded program for Americans over 65, Sutent isn’t a personal financial issue.
UnitedHealth Group Inc., the world’s largest health insurance provider, pays for every cancer treatment for the use for which the FDA approved it, and UnitedHealth’s competitors do the same, said Lee Newcomer, senior vice president of oncology at the Minnetonka, Minnesota-based company.
“Pfizer knows very well I can’t refuse to cover this drug,” Newcomer said in an interview.
Rationing by Pricing
The cost of reimbursing for Sutent and other targeted therapies is factored into every customer’s premium, which results in a kind of rationing that is putting life-extending treatments beyond the reach of more and more Americans, he said.
“Everyone’s premium goes up because we layer that across everyone we insure,” he said. “All the recent health policy talk is that in the U.S. we don’t ration, but that isn’t a true statement. We just keep pricing more and more people out of the ability to afford health insurance. We have chosen to ration by just pricing some people out.”
To decide what to charge for targeted drugs, some companies use as a benchmark kidney dialysis -- for which Medicare pays a per-patient average of $71,000 a year -- because it is “another heroic but effective way of keeping people alive,” said Tim Byers, associate dean of public health practice at the Denver- based Colorado School of Public Health.
The “general estimate of the cost” of Sutent for the average kidney cancer patient is $50,000 a year, according to UnitedHealth.
‘Most Liberal Nation’
Pfizer won’t disclose what was spent bringing Sutent to market or the profit it makes off the drug, Loder, the spokesman, said. The company charges wholesalers an average of less than $5,100 for a month at the highest dosage, he said. Pfizer rose 15 cents, or less than 1 percent, to close at $17.48 today in New York Stock Exchange composite trading.
U.S. regulators don’t take pricing into consideration when evaluating whether a therapy should be sold to the public.
“The U.S. is by far the most liberal nation in letting the market decide the fate of these drugs,” said Flaherty, director of developmental therapeutics at Massachusetts General Hospital Cancer Center in Boston, affiliated with Harvard Medical School.
In the U.K., where the tax-funded National Health Service covers all residents, the calculus is different.
“This drug was way outside of what we considered cost effective,” said Peter Littlejohns, the clinical and public- health director for Britain’s health institute, in an interview about the 2006 decision again Sutent. “The average life expectancy was in terms of months, not years, and there will be some who have no benefit from it.”
Daisy Chaining Momentum
The institute reversed its ruling on Sutent last year, persuaded by pressure from oncologists and patient advocacy groups, a campaign by Pfizer and the company’s promise to provide the first round of prescriptions to National Health Plan patients at no cost.
At the same time, the U.K. rejected two other targeted therapies covered by Medicare and U.S. insurers: Nexavar for liver cancer and Avastin for advanced bowel cancer. Nexavar was estimated to cost 65,900 pounds ($102,000) for every “quality adjusted year of life,” while for Avastin it was 74,999 pounds, according to institute reports.
The drugmakers are appealing.
The success of targeted therapy relies on a steady stream of approvals of new drugs and on insurers being willing to pay for them. Patients need alternatives because tumor cells that survive one drug’s attack can regroup and grow, and only a new medicine can work on them.
‘More Expensive Treatments’
With daisy chaining the momentum is undeniable, according to Flaherty. In metastatic kidney cancer, for instance, Sutent and five other drugs made available in the last four years moved the average survival rate from 14 months to a range of 36 to 48 months, Flaherty said.
“Improving cancer survival rates are a real success story that sometime get lost in the noise over our health-care system,” said Douglas Blayney, president of the Alexandria, Virginia-based American Society of Clinical Oncology, the largest U.S. organization of cancer doctors. “Targeted drugs are driving that survival in a major way.”
The FDA has approved 25 targeted agents since 1998, the agency’s Web site shows. With hundreds in development, 40 more could be on the market by 2015, according to a 2008 report by the Boston-based Tufts Center for the Study of Drug Development, which is affiliated with Tufts University.
‘The Deep End’
As pharmaceutical companies continue to produce these and other “more advanced, and more expensive treatments,” U.S. cancer-fighting costs will rise faster than overall medical spending, according to the National Cancer Institute in Bethesda, Maryland. Cancer treatment spending rose 75 percent in the decade ending in 2004, to $72.1 billion, according to a 2007 NCI report, the latest data available.
Medicare already devotes about a quarter of its budget -- now $450 billion -- to care in the last year of life, according to the policy journal Health Affairs. As baby boomers age and fall under the U.S. tax-funded program, they’re ushering in a new era of spending.
People 65 and older have 10 times the cancer rate and 16 times the cancer mortality rate of those younger, NCI data show. Cancer is the No. 2 killer behind heart disease, responsible for one in four non-accidental deaths, according to the Centers for Disease Control and Prevention in Atlanta.
That number might fall as researchers invent better diagnostics that let doctors more quickly identify a cancer’s genetic driver and make smarter drugs that cleanly knock out cancer drivers, according to Flaherty.
“If we can get one more drug, can we push the tumor so far into hibernation that, while not curing it, we’re managing it as a chronic disease?” he said. “We think that’s possible.”
--With assistance from Marybeth Sandell. Editors: Robert L. Simison, Anne Reifenberg
To contact the reporters on this story: Ken Wells in New York at kwells8@bloomberg.net; Shannon Pettypiece in New York at spettypiece@bloomberg.net
To contact the editors responsible for this story: Robert Blau in Washington at rblau1@bloomberg.net; Reg Gale in New York at Rgale5@bloomberg.net