Spend A Million, Make A Billion

I was called yesterday by a young reporter asking for my "comment" on the Food and Drug Administration advisory committee decision approving Celebrex for children with rheumatoid arthritis. Specifically, he wanted to know my views on the safety of this drug. I said, "no comment."

Having thought about it for a day, I am now ready to comment.

Wrong question.

There are about 30,000 to 60,000 children in the U.S. with juvenile rheumatoid arthritis. They can take ibuprofen, naproxen or a half dozen other non-steroidal inflammatory drugs for this condition. Pfizer tested 242 kids, comparing its drug to generic naproxen. No difference in pain relief, both better than placebo (which was not tested; the FDA presentation said that other studies have shown that 47 percent of children respond within three months to placebo).

So why did Pfizer bother testing this best-selling ($3 billion a year) drug on this small population, which would take small doses for short periods of time? If all 60,000 kids (or their parents) bought $100 worth of Celebrex a year, that would only be $6 million. Hmmm. Testing 242 kids at about $10,000 per kid in the clinical trial (it's a high number, but let's give them the benefit of the doubt) would cost about $2.5 million. So it's profitable, but for Pfizer, so what?

Wait. What do I see near the bottom of this news report? Pfizer will be using this data to apply for the pediatric patent extension, which gives a company six months additional exclusivity if they test their drug in kids. Let's see, a half year of $3 billlion is $1.5 billion. (The original patents on Celebrex expire in 2013.)

They'll have to wait a few years, but a thousand to one is, as they like to say on Wall Street, a hefty return on investment.