Genzyme, the Biotech Industry, ePatients and Medical Research

Published in 2007, this five part series, produced with Genzyme’s cooperation, focused on their role in the biotech industry, drugs for rare diseases and more

In 2007, I produced a long-form report (published in five parts) focusing on the history of the biotech industry, the rare disease community and more on my former award-winning blog HealthCareVox. I produced the series after conducting interviews with industry players, Geeta Anand, author of the fantastic book, “The Cure” and extensive research. The full series is reproduced here, as I think it is still relevant and features some intriguing characters.

The Biotech Industry: Definitions & A Brief History

Ronald Rader, president of the Biotechnology Information Institute, is not a happy man. In an article he wrote last year for BioExecutive International, he argued that the press, pharmaceutical company executives and others are misusing the term biotechnology. He contends:
“Articles in the major business/financial periodicals, newspapers, and other popular press often apply biopharmaceutical (and biotechnology) to products and companies without any real biotechnology involvement . . . Biopharmaceutical and biotechnology are buzzwords that attract audience attention and evoke warmer, more positive images than alternatives such as drugs . . . [In addition] [m]any executives and companies persist in misusing biopharmaceutical and biotechnology in presentations, publications and press releases. Why? . . . [M]aybe they hope to avoid the image and other problems facing Big Pharma by redefining themselves as biopharmaceutical.”

So, what’s in a name? Quite a lot actually. For some, the biotech industry has a well-deserved reputation for putting research first and developing life-saving medications for rare and deadly conditions. Biotech means innovation, high science and, for pharmaceutical companies desperate for new drugs, promising pipelines. Sometimes it seems that not a week goes by without an announcement that a major drug firm is buying a biotech for millions (or billions) of dollars. Given this, Rader would prefer that we make clear distinctions between the biotech and pharmaceutical industries.
What is Rader’s definition of biotech, or more specifically, a biopharmaceutical company? It is: “A company . . . involved in the research, development, manufacturing and/or marketing of biotechnology-based pharmaceutical products or surrogates.” These usually “involve the use of organisms, cells [or] derived biological molecules . . .”
Whether one agrees with Rader’s classification of a medical biotech company, his definition is as good as any. Let’s move on to the industry’s history.
A Brief History Of The Biotech Industry
The Biodesign Institute has an excellent overview of the history of the biotech industry on its Website. The following synopsis is based on its work.

The Dawn of the Modern Biotech Era
The modern era of biotech, which I define as stretching from the late 1950s to the present day, began with the work of James Watson, Francis Crick, Maurice Wilkins and Rosalind Franklin. These pioneering researchers did the basic scientific work that identified DNA’s structure.
About 20 years later, Paul Berg, Herbert Boyer and Stanley Cohen conducted an experiment in which they successfully combined E. coli genes. Excited about the potential of recombinant DNA technology, a young entrepreneur, Robert Swanson, contacted Boyer to pitch him on the idea of starting a company. Boyer and Swanson went on to launch Genentech, which according to the company, “proved it was possible to make medicines by splicing genes into fast-growing bacteria that produced therapeutic proteins.”
The Biotechnology Gold Rush
In the 1980s, Genentech developed Humalin, the first FDA-approved genetically engineered medication. In the following years, other biotech companies were launched, including Genzyme. Founded in 1981, the company bet that it could earn significant profits developing medications for rare diseases. Genzyme’s gamble paid off. (To learn more about Genzyme, please click here to read a special e-book about the company. A PDF version of the e-book is located here.)
Today, firms like Genzyme, Genentech and Biogen have become leaders in the biotech industry by developing hugely profitable medications for common and rare conditions. In the next installment of this series, I will focus on the industry’s sterling reputation (as compared to the pharmaceutical industry).

The White Knights: Medical Biotech’s Sterling Reputation

In February 2005, the biotech industry nearly had a Vioxx moment. That month, Biogen and its Irish partner Elan Corp. pulled their best-selling multiple sclerosis drug Tysabri from the market. They did this because one patient died and another became seriously ill after taking the medication.
Tysabri’s withdrawal, coupled with Chiron Corp’s surprise announcement that it would be unable to supply 50% of US flu vaccine stockpiles had people worried about the future of the biotech industry. Experts wondered whether biotech firms would be rocked by a string of safety scandals akin to those afflicting pharmaceutical companies.

They needn’t have worried. In July 2006, Biogen announced that doctors would begin prescribing Tysabri again. In addition, public opinion of the biotech industry as a whole is quite favorable. In 2004, industry trade association BIO conducted a survey that measured public opinion of biotechnology companies. Survey respondents associated the industry with “medical advances, future cures and research.” In addition, they said that companies in this sector provide “hope to people with terrible diseases.”
Contrast public opinion of the biotech industry to pharmaceutical companies. In a widely-reported study conducted by PricewaterhouseCoopers, Americans:
-Are split between believing that pharmaceutical companies consider important unmet medical needs when deciding to develop a new drug (55 percent) instead of choosing to develop “me-too” and “lifestyle” drugs with the greatest sales potential (45 percent).
-Say that drug companies often manipulate or suppress negative clinical trial results to maximize sales.

What’s Behind Biotech’s Shining Reputation?
I think that a major reason the biotech industry has such a sterling reputation is that its marketing practices are generally less visible than the pharmaceutical industry’s. In an article published in the May 2006 edition of Pharma Marketing News, John Mack noted that advertising agencies are “trying to entice [biotech firms] into transforming themselves into marketing machines.” However, Mack cited some experts, including Alfred O’Neill of Ryan TrueHealth, who disagreed with this advice. O’Neill said:
“Biotech should not take on the Big Pharma model with heavy emphasis on TV. Nor should they use unbranded ads the way Big Pharma has done – better to work with philanthropic and patient organizations to support the patient in a grassroots way, not just with a TV ad.”

There are a number of reasons why it is difficult to launch massive television campaigns for many biotech drugs, including:
- Complexity: Some biologics have complex dosing regimens that require significant education to master or accept.
- Expense: Some major biotech medications are very expensive and companies could face significant backlash if they encourage patients to “see their doctors” about drugs that cost tens of thousands of dollars per year.
- Patient Population: A number of biotech companies, including Genzyme, develop drugs for rare conditions. For firms that specialize in producing medications for “orphan diseases” it does not make sense to market to the masses.
Although biotech companies are not known for launching DTC advertising, there are exceptions. For example, Amgen, which makes the psoriasis medication Enbrel has produced unbranded television commercials focusing on the disease.
Another reason biotech companies – especially small ones – have good reputations is because they actively distance themselves from the pharmaceutical industry. For example, earlier this year, the Massachusetts Biotechnology Council was embroiled in a scandal caused by Thomas M. Finneran, the former president of the organization.
Finneran plead guilty to obstruction of justice charges resulting from a criminal investigation into a redistricting plan. Members of the Council from small biotech firms wanted to oust Finneran. However, according to the Boston Globe, a small group of Council members – all from major drug companies – wanted to keep him on the organization’s board. “Executives of smaller [biotech] companies said that biotechnology values its reputation as a clean, research-driven industry, and [were] concerned that Finneran’s conviction could stain that image.
Clouds On The Horizon
Although the biotech industry currently enjoys a stellar reputation, there are clouds on the horizon. Biotech’s Achilles heel is cost. Many biologics are very expensive -- especially for patients facing high out-of-pocket costs.

The Quest For Generic Biotech Drugs: Pricing, Profits & Genzyme

In September 2006, Representative Henry Waxman announced the “Access to Life-Saving Medicine Act.” Waxman proposed this legislation because: “[T]here is no generic competition for one of the fastest growing and most expensive category of drugs: so-called biotech drugs, also known as biological drugs or biopharmaceuticals. It is common for these drugs to cost tens of thousands of dollars a year, even after patent expiration. Many patients are now denied access to these important drugs because even the co-payments can reach thousands of dollars a year. And the sky-rocketing cost of biotech medicines is imposing increasing burdens on employers, insurers, and the federal government.”

Some may believe that it is relatively easy to develop a generic biotech drug. However, things are not that simple. Manufacturers of generic medications are allowed by the Food and Drug Administration to submit what are called “abbreviated new drug applications.”

Companies are not required to demonstrate that their generic is safe and effective. Instead, they must only show that it is chemically and pharmaceutically identical (i.e., bioequivalent) to the branded medication it is designed to replace. However, according to a very informative article on this subject published in Biopharm International:
“The manufacturing process for each biologic [biotech drug] defines, to a significant extent, the product because biologics are based on living cells or organisms whose metabolisms are inherently variable. Moreover, apparently small differences between manufacturing processes can cause significant differences in the clinical properties of the resulting products . . . It is not scientifically reasonable or safe to simply expect that the clinical properties of a pioneer's product would be shared by the follow-on product. The only way to characterize the clinical properties of the follow-on product is to evaluate them in appropriately designed clinical studies.”
In short, manufacturing a biotech drug is a very complex enterprise. There is no guarantee that a product produced using a different process would be clinically equivalent. Waxman’s bill attempts to clarify how the government would determine whether a generic biologic is effective by:
-Giving Health and Human Services (HHS) the ability to approve abbreviated new drug applications for products that are “comparable to previously approved (reference) [biotech] products.”
-“A comparable biological product application must demonstrate that there are no clinically meaningful differences between the two products. The application must also show that the new product shares the ‘principal molecular structural features’ of the reference product and the same mechanism(s) of action, if known.”
-HHS “has discretion on a case-by-case basis to determine what studies are necessary to establish comparability, and may require a clinical study or studies, but only if necessary.”

There are rumblings that parts of Waxman’s legislation may be bundled into the bill that would renew the FDA’s user fee agreement with the pharmaceutical industry. I’m sure we’ll see lots of conversation about the most appropriate, ethical and safe ways to determine if a generic biologic is indeed “comparable” to a branded biotech medication.
The Focus On Price
Don’t expect the debate over generic biologics to be resolved anytime soon. In the meantime, biotech companies will have to deal with and respond to an increasing flood of articles highlighting the high price of biotech medications. For example, in January 2007, the New York Times published a major article examining the cost of biotech psoriasis drugs. According to the Times:
“When the biotech industry began rolling out psoriasis drugs a few years ago, experts heralded the new medications as safer, more effective treatments for the skin disease. And the companies — Amgen, Genentech and Biogen Idec, arguably the industry’s best-known firms — forecast a repeat of the success they have had with similarly priced drugs for rheumatoid arthritis, multiple sclerosis and cancer.

But they may have overestimated the medical establishment’s willingness to spend $10,000 to $35,000 a year on treatments for psoriasis, a condition that is often, though incorrectly, perceived as merely a cosmetic problem. Many insurers are insisting that psoriasis patients try older, cheaper therapies first before approving reimbursement of a biotech drug, frustrating some doctors and patients.”

The high price of biotech drugs has powered the earnings of many major biopharmaceutical companies. Investors are happy about this, but others are lamenting the impact on consumers. In some cases, especially cancer, patients are being forced to make decisions about whether their life is worth the hundreds of thousands of dollars they will have to spend out-of-pocket to have access to the newest biotech treatments.

Genzyme Addresses The Price Question

The biotech firm Genzyme has come under intense criticism because its medications, which are often the only treatments for rare illnesses, are very expensive. In March 2006, I spoke with Genzyme about its pricing policies. Following is a (paraphrased) summary of what they had to say about this issue.

Our Drugs Are Expensive To Develop, But We Are Committed To Ensuring Access

Overall, biotech medications are very expensive to develop. In addition, we manufacture drugs for very rare conditions, which adds to the expense. When people challenge us on why our drugs cost so much, we tell them about what it takes to make our medications. After hearing what we have to say, they have a better appreciation for why our drugs are so expensive.

However, we are also aware that some people have a hard time paying for our medications. We have a number of robust patient assistance programs designed to ensure that all patients have access to our drugs.

We Help Physicians Answer Tough Questions About Drug Prices

Genzyme has a stellar reputation within the medical community. This is partly because we take our responsibilities as a corporate citizen very seriously. We work with physicians to help their patients receive treatment – either via our programs or their insurers. We know patients will be angry about our drug prices, and we are committed to helping doctors answer their questions and satisfy their needs.

Peeling Back The Onion On The Biotech Industry:
Research, Patients & “The Cure”

The public has no clue about what’s happening at most drug firms. This was a major finding of a PricewaterhouseCoopers study released earlier this year. Consider what Brian Riewerts, partner at the company’s Pharmaceutical and Life Sciences Advisory Services Group, had to say about the research:
"As consumers share more of the cost of care and make their own decisions about health services and products, they will be far more sensitive to drug pricing-yet they clearly do not appreciate the cost and financial risks of drug research and development.”
I think that Riewert’s conclusions also apply to biotech firms. As highlighted in the previous installment, policymakers, the public and medical professionals are becoming increasingly concerned about the high cost of biotech medications – especially those designed to treat cancer. While the biotech industry currently enjoys a stellar reputation, criticism of biotech firms' pricing strategies could damage it.

Fortunately for industry insiders, Geeta Anand, Pulitzer Prize-winning reporter for the Wall Street Journal, has helped shed light on the high costs and risks associated with biotech drug research and development. Her book, The Cure, focuses on biotech executive John Crowley’s struggle to find a cure for a devastating illness, Pompe Disease, afflicting two of his children. Pompe is a rare muscle condition cause by missing or defective enzymes. While Anand did not write The Cure to reveal the inner workings of biotech companies, the book provides a lot of interesting, and sometimes surprising, information. Following are a few excerpts from the book that I think reveal the inner workings of the biotech industry.
Ethics & Biotech Drug Research
In the latter part of her book, Anand relates the story of how Crowley, desperate to secure funding for his biotech Novazyme, went to extreme lengths to show investors that he was making progress on the company’s flagship product. He presented flawed data to a group of venture capitalists and was subsequently raked over the coals.
“McKinney smiled weakly and directed the group to look at the graph on his PowerPoint presentation on which he’d plotted the enzyme activity levels in . . . three treated mice. ‘Why are your results so variable?’ Roth asked. John focused for the first time on the fact that the enzyme activity levels in the three mice differed from one another by five or ten percentage points, realizing he was so far out of his league that he hadn’t even known this might be a problem. McKinney had drawn a nice straight line through the middle to show the average. ‘Well it may be due to the fact that it was hard to find the tail veins in the mice,’ McKinney said. ‘So some may have gotten more enzyme than others.’”

After the meeting, one of Crowley’s investors takes him out to lunch to discuss the data he presented. “‘The other day you and Tony presented your data as great. Not only was it poorly done, but it also wasn’t even good data. This business is full of people who are full of themselves and try to spin data. If you’re not careful, you’ll quickly develop a bad reputation. You’ve got to avoid getting a reputation as a shit polisher in this business. At our meeting the other day, you tried to polish the shit.’”
Why It Is So Difficult To Produce Biologics
Crowley attends a meeting with a potential business partner who will help test and develop Novazyme’s treatment for Pompe. The following exchange highlights why it is so difficult to manufacture biotech drugs.
“‘How are you getting the PTase?’ he began, using the abbreviation for phosphotransferase, the name for the first of the two processing enzymes Canfield planned to use to make his Pompe [treatment]. ‘We’re purifying it out of lactating bovine udders,’ Canfield responded. ‘Cows? Where are you getting the udders from?’ Roth [the potential business partner] asked. ‘The stockyards,’ Canfield said . . . ‘Never in a million years can you inject cow protein into people,” Roth responded, his tone angry. “The FDA would never allow it.”
‘What about the uncovering enzyme?’ asked Roth, naming the second processing enzyme Canfield needed to make his Pompe [treatment]. ‘Making it in T-293, taken from human kidney cells.’ Oh no—the FDA would never allow that either,’ Hurley [a regulatory expert] said. Her big eyes seemed to grow wider with each of Canfield’s answers. Kidney cells weren’t considered sterile enough to be used as a factory for growing enzymes or any other protein for human therapeutic uses.”

Patients’ Desperation For Effective Orphan Disease Treatments
After Crowley sold his company Novazyme to Genzyme, he helped plan a major study that resulted in a decision to stop testing two products. One was the enzyme he was developing at his old company, Novazyme. Another was a product referred to as the Pharming enzyme. After this decision, he and other Genzyme employees went to the Netherlands to explain to the press and public why they decided to stop work on this medication.
“[I]n late September, [Crowley] and a half-dozen other senior Genzyme managers and scientists flew to the Netherlands to explain their decision to drop the Pharming enzyme. Dutch newspapers had been filled with stories quoting panic-stricken patients and their families saying Genzyme was ceasing production of the very enzyme needed for their survival. . . . ‘This is not a decision we make lightly, believe me, John said . . . We are making sure we have enough enzyme to supply each and everyone of your needs -- even though it means many other Pompe patients in the world will have to wait longer, and perhaps even die, waiting to be treated [including his children].’”

A Conversation With Pulitzer Prize-Winning Reporter Geeta Anand

About Geeta Anand

Bombay-born Geeta Anand is an investigative reporter and feature writer for the Wall Street Journal. She wrote two of the stories on corporate corruption that won the newspaper a Pulitzer Prize in 2002, and she received the top business reporting honor, the Gerald Loeb award, in 2006. Formerly a political reporter for the Boston Globe, she now specializes in health and biotechnology. She lives in Manhattan with her husband and two young daughters.

The Interview

About The Cure

Q: Who is John Crowley and why is he important?

A: John is a smart, highly motivated dad who helped start a biotech company to try to develop a drug to save his kids who had a rare fatal illness called Pompe disease. He’s important because of the passionate, dedicated person that he is but also because he represents the hope that so many Americans have in the promising new scientific developments underway.
Q: When and why did you decide to write The Cure?
A: I decided to write The Cure in late 2003 after writing two stories for the Wall Street Journal about John’s attempt to develop a drug to save his kids. I found his story so compelling from a human interest perspective but also a scientific and business point of view that I wanted to write a book.
Writing The Cure
Q: Your book is filled with details about Crowley’s struggles to find a treatment for his children. How did you get this information and incorporate it into the book?
A: I got the information primarily from extensive interviews with John and his family and the scientists, physicians and business people involved in the quest to develop a treatment for Pompe disease.
Q: Did your feelings about people and their families struggling with rare illnesses change during and after writing the book? If so, how?
A: I developed even more respect for the dedication, passion and patience it requires to push ahead not only in caring for your sick children but in furthering a treatment. It is such a grueling journey and such an enormous challenge that most families do not survive the ordeal intact.
Q: The Cure ended with Crowley’s children receiving treatment for Pompe’s disease. Are you still following their story?
A: I stay in touch with the family because I’ve gotten to know them well but not with any explicit intension of writing any more stories about them.
The Business Of Healthcare
Q: What would you like your readers to understand about the business of healthcare after reading The Cure?
A: I would like readers to understand how challenging it is to both scientifically and financially to turn promising laboratory discoveries into novel medicines.
Q: The Cure provides an interesting “beyond the headlines” look at medicine. Did your beliefs about clinical research and the biotech industry change after writing your book? If so, how?
A: I think I gained a deeper insight and appreciation for the challenges of all players in the business of trying to develop new treatments--not only for how difficult it is for scientists trying to turn exciting laboratory discoveries into medicines but also for the venture investors and companies financing these drug discovery journeys.
Q: You’ve written a lot about the biotcch industry’s pricing strategies. Do you have a better understanding of why companies like Genzyme charge so much money for their medications because you wrote The Cure?
A: Writing The Cure has given me a more intimate view of the challenge of developing new treatments—not only how costly it is but also how risky—and how often the most promising concepts fail because we still don’t know so much about human biology.
Healthcare & The Changing Media Landscape
Q: In your book, John Crowley used the Internet to find valuable information about potential treatments for Pompe disease. Today, the quantity of online healthcare content has increased exponentially. How are you and your peers adjusting to these changes in the media landscape?
A: We rely more and more on the Internet for research and to find people. I found it easier to track down the people I needed to interview and find articles I needed to read for The Cure because of all of the valuable information available online.
Q: As you may be aware, thousands of people (laypersons and professionals) are writing healthcare blogs. Given that it is so easy to find blog content via search engines, do you feel that health-focused bloggers have more responsibility to the public than those writing about other topics? If so, why?
A: I think everyone has a responsibility to try to write truthfully and accurately. But with healthcare, because people may use the information to make decisions on issues related to their very survival, the responsibility to reporter accurately and exhaustively—whether on blogs or in print--is even greater.