Irrational Exubera(nce)

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There's big money to be made - or lost - addressing the needs of diabetics.

By Walt Raleigh

Big news in the big business of diabetes:

Drug company Pfizer announced, on October 18th, that its inhaled-insulin product, Exubera, was not living up to expectations, and was being scrapped.

"Expectations," in this case, had nothing to do with the medical benefits of insulin, which have been known and understood for a long time, or the effectiveness of this particular formulation and delivery method, which had proved to be safe and effective in lengthy, FDA-mandated clinical trials.

The expectations Exubera wasn't meeting were sales targets.

Digging into the numbers a bit (the story was widely reported in the business press, and the Wall Street Journal's coverage was exemplary), we find that the drug company in question sold just $4 million worth of Exubera in the second quarter of 2007... and they took a $2.8 billion (with a "b") pre-tax loss on the product when they shut it down.

It seems that doctors and patients were slow to accept inhalable insulin as a delivery medium, and the cost of promoting Exubera was just too high for Pfizer to continue pouring money into marketing in the hope that things would improve soon.

Was Pfizer suffering from (with apologies to Alan Greenspan) Irrational Exubera(nce) when they said they expected the new form of inhalable insulin to be a $1.1 billion a year product by 2010?

Not necessarily.

A single "blockbuster" drug can lift a drug company's stock price into the stratosphere almost all by itself, and unfortunately, diabetes is a global growth industry.

The American Diabetes Association estimates that in 2002, diabetes, all by itself, accounted for 11% of health-care spending in America... some $92 billion in direct expenditures.

Who wouldn't want a piece of that business?

And let's face it, there are a lot of organizations, not just pharmaceutical companies, in the business of doing well by doing good and looking after the needs of diabetics, including dLife.com, where you're reading this column.

But the very public haircut that Pfizer just took over the failed introduction of Exubera shows the dark side of the (as a whole) incredibly profitable pharmaceutical industry:

Medicine in the United States is a unique blend of commerce and science, good intentions and the bottom line. Research scientists and pioneering physicians have developed some truly incredible, novel therapies for illnesses and conditions that affect a lot of people, and have changed their lives for the better.

But at the end of the day, it's a business. And if a product isn't meeting commercial expectations, a drug company isn't going to continue to develop, promote and support it.

Diabetes is a terrific market for the American healthcare-research complex, so you can fully expect that the drug companies have plenty of new treatments in the pipeline, along with the Botox and impotence pills (come to think of it, I wonder what fraction of the Viagra/Cialis/Levitra market consists of male diabetics?)

But let's not kid ourselves about their motives.

This is one case where there is definitely strength in numbers, and where being targeted by marketers *can* be helpful, and not hazardous, to your health.

Disclaimer
dLife's Daily Living columnists are not all medical experts, but everyday people living with diabetes and sharing their personal experiences. While their method of diabetes management may work for them, everyone is different. Please consult with your diabetes care team to find out what will work best for you.