How Convenience Can Give Drugmakers a Competitive Edge

Patient adherence is critical to successfully commercializing medicine and that can make it profit-friendly to out-innovate competitors by creating drugs that are more convenient to take.

In this clip from The Motley Fool's Industry Focus: Healthcare , host Kristine Harjes is joined by contributor Todd Campbell to explain how improved dosing can fuel sales using the battle for dominance in PD-1 cancer treatments between Bristol-Myers Squibb (NYSE: BMY) and Merck & Co. (NYSE: MRK) as an example.

A full transcript follows the video.

10 stocks we like better than Walmart

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

The author(s) may have a position in any stocks mentioned.

This video was recorded on March 7, 2018.

Kristine Harjes: Our fourth and final factor of competition is one that I don't think is really thought about as much, and this is the convenience factor.

Todd Campbell: Right. And it actually dovetails into these other things pretty well. If you can make a drug more convenient to take -- and you can define convenience as, say, the dosing schedule is more favorable, or the time to take the drug, if it's an infusion drug, shrinks. Then, maybe you can eliminate some of the side effects that come along with taking the drug, and possibly carve out some costs that are associated with it. I was thinking this past week; you and I were talking before the show about what we're seeing going on right now in the ongoing battle for market share among PD-1 cancer treatments. That's been an absolute brawl since these drugs won approval in 2014. Bristol-Myers' Opdivo and Merck & Co's Keytruda.

Harjes: I'm so glad that we're talking about the PD-1 battle in an episode about competition, because this has been one of the most interesting brawls to watch over the past many years. Before we dive into the PD-1 battle, I do want to go back and emphasize the point that you made about convenience being a factor that plays into all of the other three that we talked about, efficacy, safety and price. You were completely right about safety lowering that side effect profile. Price, I also agree, if you're treating people less often, then you're bringing down all sorts of costs, from the direct costs to even less direct costs like time spent in a hospital or fewer office visits, even something like fewer disposables for whatever is used in the delivery of the drug itself.

I'll also add one more, which is how it plays into efficacy. Real life adherence is kind of tough. And sometimes you'll find, in the actual data for a drug that's on the market, it's not as effective as it was in trials. And a huge part of that is because people aren't good at following directions. So, if a drug is completely burdensome to take on the prescribed schedule, people might not be very good at following that schedule, and that can minimize the efficacy of the drug itself. If you can make it more convenient to take, you're decreasing the chance that non-compliance is going to mess with your efficacy.

Campbell: Absolutely. That's an awesome point, Kristine!

Harjes: All that being said, PD-1s. I'm going to kick it to you for this one, Todd.

Campbell: OK. It's probably important to have a little background on what PD-1s are. We've talked about it in the past. It's a checkpoint protein. In immune systems, on T cells, what oftentimes can happen with cancer is, they'll hijack a mechanism that basically flips a switch on that PD-1 protein and tells the T-cell, "Don't attack me, I'm a healthy cell." So, by inhibiting these PD-1s, what they do is inhibit the activity of PD-1, they basically remove or eliminate the ability for the cancer cell to hijack that mechanism.

Harjes: Yeah. Bristol and Merck had been neck-and-neck in developing these two types of drugs for quite a while. Eventually, it came to look like Keytruda was probably pulling ahead, specifically in first-line lung cancer, which is an enormous indication. We're now waiting for some interim data to see if maybe Opdivo can catch up here.

One way in which Opdivo was able to get some pretty good results recently was just yesterday when the FDA approved a four-week dosing for Opdivo. Previously, it had been dosed every two weeks. So, going from every two weeks to every four weeks is doubling the convenience, essentially. For reference, Keytruda is dosed every three weeks. This will be for a majority of its approved indications, and that includes melanoma and second-line lung cancer and bladder cancer. Right now, it's the only PD-1 drug, and there are a lot of them out there besides just the two that we're talking about, that's approved for a four-week dosing schedule.

Campbell: Yeah. This is really a fascinating development. People are going to have to watch the next couple of quarters to see whether or not Opdivo starts to get back some of its mojo. You mentioned that Keytruda had won approval in first-line use in non-small lung cancer. That basically caused sales of Keytruda to skyrocket. And Opdivo sales in the U.S. have pretty much flatlined since then because you're using Keytruda now ahead of Opdivo, you're using Keytruda in the first-line setting and Opdivo isn't used in the first line setting. So, right now, Bristol-Myers' management is saying, how do we make sure that we sure up the market share that we do have in these later lines of treatment until we know that we can actually compete in the first line? And there's opportunity that they're exploring to be able to do that, but that's not approved yet.

So, you look at it and say, if I can make this more convenient to the cancer infusion centers where these are being dosed, maybe I can make sure that I'm solidifying my relationship with those places and this drug continues to get used instead of Keytruda. That will be very interesting, to see how this plays out over the next couple of quarters. As you mentioned, Opdivo was every two weeks, and it was a one-hour infusion. Now, it can be either every two weeks or every four weeks for a half-hour infusion. Now, that infusion time matches Keytruda. But like you mentioned, the four-week dosing schedule is better than Keytruda's three-week.

Harjes: Yeah. If you look at the incentives from the perspective of these infusion centers, this looks pretty favorable, that you have drugs that take the same amount of time to do the infusion, but one of them now has to be done less frequently. That's a good thing. Some analysts are saying that this could help it expand this into the maintenance and adjuvant therapy settings. This is yet another example in this ferocious battle between Keytruda and Opdivo, where one drug is largely ahead and the other one starts to catch up. It's really just been fascinating to watch.

I believe we did an entire episode on this battle about a year ago, if I'm remembering the timeline correctly. Any listeners that are interested in some of the details about the development of these two drugs and how the situation came to be the way it is today, shoot us a note at and I'd be happy to send that episode along.

Campbell: Yeah. One final takeaway, too, from my end, as to why we're spending time talking about this, Opdivo's sales in the fourth quarter alone were $1.36 billion. Keytruda's in the fourth quarter were $1.3 billion. So, they are literally neck and neck.

Harjes: But the growth rates are totally different, as you alluded to earlier. Opdivo's Q4 sales were only up 4% year over year, vs. Keytruda's, which were up 169%. So, for two nominal numbers that are fairly similar, the growth rates are totally different. But this battle is clearly not over.

Kristine Harjes has no position in any of the stocks mentioned. Todd Campbell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.