June 15th, 2007

Are Pharmas Addicted to Lifestyle Drugs?

By Arlene Weintraub
Business Week

Drugmakers Are Eager to Spiff up Your Sex Life and Hairline, Even as Their Lucrative Products Face Mounting Safety Questions

At a storefront exhibit in New York to promote the new weight-loss pill Alli, four slender young women gather around a computer terminal to learn about the drug that some have called a miracle remedy for America’s obesity epidemic. But not one of the women appears to be overweight, let alone obese.

That raises a question: Will Alli (pronounced “ally") become the next lifestyle drug—a magic pill for a quick fix? Might it serve those who want to shed pounds before a big event, such as a wedding, or, worse, women who yearn to be as stick-thin as runway models?

It is, after all, the first FDA-approved weight-loss product to be sold over the counter. Steven Burton, vice-president of the weight control division for GlaxoSmithKline Consumer Healthcare (GSK), which markets Alli, cringes at the term “lifestyle drug.” He’s also nervous about the hype. After a tour of the exhibit, he says: “People have to understand this is not about losing 30 pounds in three weeks.”

Try as they might to distance themselves from the lifestyle drug sector, pharmaceutical companies can’t seem to kick their addiction to these lucrative products. Even as consumers and government regulators grow more alarmed over drug safety, an examination of four popular lifestyle categories—weight loss, hair loss, sleep, and sexual dysfunction—shows that the pharmaceutical industry is by no means shying away from this controversial territory.

This is a surprising trend for several reasons. Lifestyle drugs are defined loosely as products used to treat conditions that are not life-threatening. Yet because people take these drugs over long periods of time, sometimes on a daily basis, it can be difficult for companies to persuade the Food & Drug Administration that the medicines will cause no harm in the future. On June 13 a panel of FDA advisers voted unanimously that regulators should not approve a weight-loss treatment called Acomplia, from Sanofi-Aventis (SNY), and most experts believe the FDA will follow the advice of its panel when it reaches a decision later this summer.

For manufacturers of lifestyle drugs, the Acomplia example offers a cautionary tale. Analysts originally pegged the product, now called Zimulti, as a surefire blockbuster, with potential sales of $4 billion a year. It is already on sale in 37 countries.

But the FDA is concerned that some patients in clinical trials have experienced depression, and a number of them have been troubled by suicidal thoughts. The drug seems to achieve its desired effects by blocking biological receptors in the brain that cause food cravings. But by intervening in this pathway, it may also unleash anxiety, phobias, and other psychiatric disorders, according to statements the FDA released when it first reviewed this drug in 2006.

A Bulging Epidemic

Obesity occupies a special place in the lifestyle arena. Most experts argue the condition is, in fact, life-threatening over the long run, because it can lead to heart disease and diabetes.

A drug such as Acomplia, if it is eventually approved, will face a restricted market—if only because it will require a doctor’s prescription. But Alli, which costs about $60 a month, is a different matter. Its over-the-counter status virtually guarantees that it will attract fans well beyond those who are dangerously obese.

And for many, the potential benefits are as much about cosmetics as they are about health. “Losing weight helps my self-esteem and well-being,” says Stephanie, a 38-year-old beverage company executive who asked that her last name not be revealed. She has lost 20 pounds in the past year by exercising and changing her diet, and she plans to add Alli to her weight-loss plan. “Looking good makes you feel better.”

Glaxo’s Burton says it’s hard to estimate the potential market size for Alli. But he adds that the market for weight-loss pills that are not FDA-approved is about $1 billion a year. Add in diet foods and programs such as Jenny Craig, and you end up with a $40 billion-plus market.

Burton believes Alli’s limitations will dissuade people from using it as a shortcut to a quick trim-down. The drug prevents the body from digesting about a quarter of the fat in a person’s diet. Those who eat too much fat while taking the medication can experience unpleasant side effects, such as diarrhea. That will effectively force patients to stick to a low-fat diet while they are on the drug.

Could Cause Drowsiness

Government regulators have no qualms about raising safety concerns on drugs long after they hit the market, especially in the lifestyle segment. Late last year, after several Ambien users regaled TV talk-show hosts with bizarre stories about how the insomnia drug prompted them to drive their cars or even prepare entire meals in their sleep, the FDA demanded that Ambien maker Sanofi and all other manufacturers of sleep drugs add strongly worded warnings to their labels.

On Mar. 17 the agency went a step further, requesting that they also send letters to doctors notifying them of the warnings, and that they print guides for patients that describe the side effects and provide advice on how to use the drugs properly.

Clearly, America’s craving for a full night’s sleep is overpowering any concerns about strange sleep behavior. In the first quarter of this year, U.S. sales of Ambien jumped 54%, to $737.7 million. Overall, prescriptions for Ambien, Sepracor’s (SEPR) Lunesta, and similar drugs jumped 15% last year, to 47.8 million, according to health-care information provider IMS Health, and total sales grew 29%, to $3.6 billion.

David Dinges, a sleep scientist at the University of Pennsylvania, suspects doctors are incorporating the warnings into their consultations with patients rather than withholding the drugs altogether. “They’re being more vigilant about side effects, but I don’t expect this will lead to a market reduction,” says Dinges, who is a scientific adviser to several pharmaceutical companies. In fact, shortly after Ambien’s patent expired on Apr. 20, 13 generic drugmakers rushed into the market with copycat versions.

Waking Effects

The flip side of insomnia is drowsiness during the day, another attractive target for makers of lifestyle drugs. Provigil, a drug from Cephalon (CEPH) that conquers such sensations, is finding an ever-broader audience, enjoying 35% sales growth in the first quarter of this year, to $201 million. While the drug is approved to treat narcolepsy and other recognized disorders, some analysts estimate that as much as 90% of its sales come from people who are using it “off label” to stay awake for long stretches of time.

It was probably such off-label usage that persuaded the FDA to delay a long-acting version of it, called Nuvigil. In addition, some patients developed skin rashes during a trial for a version of Provigil that was being tested to treat attention deficit disorder. The FDA has requested that Cephalon incorporate strong warnings about the side effects into Nuvigil’s label, and the agency is now expected to approve the drug by June 16.

Baldness Won’t Kill You

Even when there is plenty of capital riding on a new product, safety concerns can derail it. A couple of years back, biotech firm Curis thought it had a promising new treatment for baldness. So did Procter & Gamble, which partnered with Cambridge (Mass.)-based Curis to develop it.

But on May 9, P&G pulled out of the deal, citing unspecified safety issues in early trials. “Safety profiles are especially important for these drug candidates since, unlike…cancer and stroke, male pattern baldness is not a life-threatening disease,” said Curis Chief Executive Daniel Passeri in a statement. Without P&G’s support, it could be difficult for the unprofitable Curis to continue studying hair loss.

Such disappointments haven’t dissuaded larger companies from making a run at baldness. Even though millions of men in the U.S. are destined to lose most of their hair, the treatment market today is a mere $1 billion a year. That may be because even drugs with high brand awarenesss, such as Rogaine and Propecia, often don’t work so well.

Pfizer (PFE) is testing two drugs to treat hair loss. Its most advanced candidate was originally tested as an asthma treatment, because it relaxes smooth muscle cells in blood vessels such as those found in lung airways, allowing patients to breathe.

“We found the compound was not well-suited [to treating] this disease, but we are now exploring its potential in hair loss,” says Pfizer spokesman Stephen Lederer in an e-mail. He adds that scientists still don’t fully understand why relaxing certain blood vessels leads to hair growth, though this appears to be the same mechanism exploited by Rogaine.

In the Bedroom

Pfizer knows firsthand how rewarding lifestyle drugs can be when they work well. It pioneered the lifestyle category with its impotence blockbuster Viagra.

Sales of the little blue pills, first approved in 1998, rose 11% in the first quarter of this year to $434 million. First quarter sales of Viagra’s two competitors, Eli Lilly’s (LLY) Cialis, and GlaxoSmithKline’s Levitra, also grew by double digits.

Now, Johnson & Johnson (JNJ) is preparing to enter the market for sexual dysfunction. At a June 7 event for Wall Street analysts, the company disclosed that it is continuing to study a drug for premature ejaculation, even though the FDA declined to approve it in 2004. To gain overseas approval, the company ran a number of additional trials, and the results have been so encouraging that J&J executives are thinking about approaching the FDA a second time.

The drug, Dapoxetine, is derived from common antidepressants known as SSRIs, which are sometimes used off label to treat premature ejaculation. Dr. Paul Stoffels, chairman of global research and development for the pharmaceutical division of J&J, says the first time the drug was up for review, regulators questioned whether premature ejaculation was truly a disease that needed to be treated. At a press conference after the June meeting, Stoffels declared: “We have generated data to show that Dapoxetine provides a relevant benefit to patients.”


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