Over the past few months, Lilly ceo John Lechleiter has made speeches in which he criticized various government policies for hindering research and development efforts (see this). And central to his theme has been the importance of innovation. "Innovation is not a panacea for the challenges facing our health care systems, but it is hard to see any way out of the current crisis – and I don't think that's too strong a word – without innovation," he told the American Chamber of Commerce in Germany which, earlier this year, was preparing to cut brand-name drug prices ( look here).
Today, however, the drugmaker has begun marketing yet another statin for controlling cholesterol, which it calls Livalo. This is a big market, of course, with statins ringing up some $13 billion in sales last year. But do patients really need another one? Lilly, which actually licensed the pill from Kowa Pharmaceuticals, hopes Livalo will be distinguished from the pack because it's metabolized differently than most statins, which could reduce unwanted interactions with other drugs.
"While there are some very good medicines in this category today, based on the number of patients who are untreated and who fail to stay on therapy tells us there is a good opportunity here," Lechleiter tells The Indianapolis Star in an advance interview.
Maybe so, but as Miller Tabak analyst Les Funtleyder tells the paper: "I think it's going to take a lot of work to interest physicians in a new statin. It's going to have to work much better, or be much cheaper, or have fewer side effects than anything else on the market." Adds Hilliard Lyons analyst Steve O'Neill: "The space for cholesterol drugs is extremely crowded. That's just a simple fact." Lilly hopes pricing will help - at $3.30 a tablet wholesale, Livalo will be 15 percent cheaper than Crestor.
Like its rivals, Lilly faces a huge dropoff in revenue as big sellers lose patent protection, but its situation is more precarious than others. Matters are not helped by the poor performance of its new Effiant bloodthinner. So Lilly, which recently overhauled its R&D operation, can hardly be blamed for pursuing a tactic that may help weather the storm. In fact, while Lilly has never been known for cardiovascular drugs, Lechleiter says more cholesterol-fighting research may be pursued as a way out of its mess. Whatever works, as they say. It is ironic, though, that a drugmaker that regularly describes itself as an "innovation-driven company" and whose ceo harps on that theme is forced to rely on a variation of the 'me-too' approach to try to get by.