PSORIATIC ARTHRITIS MEDICAL NEWS

***** SPECIAL ENBREL ADDITION ******

Luke Timmerman of the Seattle Times has just published a three part series
about the drastic shortages of Enbrel, a biotech drug from Immunex. Starting
in January of this year through April, our website has had over 300 e-mails
from people who are involved with either Enbrel or Remicade as their current
or future medication choice to alleviate Psoriatic Arthritis. This special
edition of our newsletter will hopefully answer many of the questions about
Enbrel and its' supply network.

PART ONE - SUNDAY 4/28/02

DEMAND, MARKETING BOLSTER SKY-HIGH PRICE OF NEW BIOTECH DRUGS By Luke
Timmerman - Seattle Times business reporter

Julie Davidson prides herself on working 14-hour days. There were times,
though, when rheumatoid-arthritis pain was so excruciating, she had to choose
between grocery shopping and showering.

For three years, the Woodinville woman tried drugs that didn't work. Then her
doctor suggested a new biotech drug that cost more than $1,000 a month. Her
insurer would pay only half.

So to get Immunex's hit drug, Enbrel, Davidson, 52, a health-care
administrator for a nonprofit agency, took a second job, didn't take
vacations or go to movies and left herself with a shaky retirement.

To her, it was worth it. This spring, she was back in her groove, pain-free,
prodding lawmakers to support low-income women and children.

"To feel that I now have control over my health, my life and my energy is
priceless," Davidson said. "How do you put a price tag on that?"

Thousands of people can relate, which is partly why biotech drugs cost so
much more than conventional drugs. Companies such as Immunex, Seattle's
biggest biotech, have figured out they can command huge prices to treat
diseases that had never been effectively treated.

But other forces also are driving up the price - expensive manufacturing,
flashy marketing, years of research, scant competition and, in some
instances, lucrative profit.

With 100 biotech drugs in advanced studies for diseases such as cancer,
Alzheimer's and AIDS, insurers fear the costly new generation of drugs could
have grave consequences for the health-care system.

WILLINGNESS TO PAY

The biotech industry is a little more than 20 years old, but it has created
treatments for breast cancer, anemia and multiple sclerosis. Those
breakthroughs have come at unprecedented prices. Enbrel, for example, costs
10 times more than Merck's Vioxx, an arthritis-pain reliever. But Enbrel can
stop joint erosion while it relieves pain. Vioxx simply relieves pain.

Setting the price of a drug starts with patient demand. About 85,000 patients
in the U.S. take Enbrel. Like Davidson, they are willing to pay dearly to
stop their crippling disease.

Most patients who take Enbrel are insured and pay little out of pocket. That
leaves insurers to force doctors and patients to try cheaper drugs first. If
those fail, insurers usually cover the expensive drug, at least partially.
That means higher premiums for employers and employees. And because drug
companies know that breakthroughs ultimately will be covered, they can push
insurers to pay high prices.

"The biotech companies look at the cost to make it; they look at what their
competitors charge; and they look at the maximum amount they can get payers
to pay," said Dr. Scott Ramsey, a health economist at the Fred Hutchinson
Cancer Research Center in Seattle. "Amgen (the California-based biotech that
is buying Immunex) has done calculations on how its patients get out of the
hospital earlier and what that saves so they can justify their price. But
ultimately, they'll charge as much as they can get away with."

Immunex Chief Executive Ed Fritzky said his company has paid for studies
showing that rheumatoid arthritis costs $17,000 a year in doctor visits,
hospitalizations, surgeries and missed work. Other Immunex-supported studies
show that Enbrel reduces those factors, but Immunex can't say whether Enbrel
saves more than it costs.

Still, Fritzky said it is worth $12,000 a year, maybe more.

"People say it's worth it because it's saving on surgeries ... and giving
people their lives back," he said. "If the product were not delivering that
kind of value to the system, the system would not pay for it."

MANUFACTURING

By nature, biotech drugs are more difficult, time-consuming and expensive to
make than conventional drugs. Enbrel is a genetic copy of proteins that get
rid of inflammation. The proteins are grown inside hamster cells - they are
not made by mixing chemicals. Fewer than two dozen places in the world are
capable of large-scale biotech manufacturing, and the expense and risk of
failure have led to a worldwide factory shortage, which drives the cost
higher.

U.S. Bancorp Piper Jaffray reported this year that the cost of materials for
biotech manufacturing is 20 to 100 times that of conventional drugs.

Complex manufacturing, however, isn't the whole story. Last year, Immunex
spent 21 percent of its sales on manufacturing; the industry as a whole spent
only slightly less.

RESEARCH AND DEVELOPMENT

The Pharmaceutical Research and Manufacturers of America says expensive
research and development is the driving force behind drug prices. The average
biotech drug, the industry says, takes 12 to 15 years to develop and costs
$500 million to $800 million. Four out of five fail in clinical trials.

Public Citizen, a watchdog group, says those figures ignore tax credits for
research and development and are based heavily on "opportunity cost" - a
theoretical calculation of how much time is wasted on drugs that fail. Public
Citizen says development costs about $110 million.

"They commonly use that $800 million number to defend their prices, but the
data it stands on is very shaky," Ramsey said. "The fact is, a company like
Immunex is making a lot of money. Amgen didn't buy them for nothing."

Even so, drug companies point out, only three out of 10 drugs on the market
crack $200 million in sales and recoup investment.

Biotech startups spend most of their money on research until they get a
product, when they begin to spend more on marketing. In the 1980s, Immunex
routinely spent 60 percent to 80 percent of its money on research and
development. That has shrunk to about 20 percent. Immunex has spent more than
$1 billion on research in its history but expects to earn that much in Enbrel
sales this year.

MARKETING

These days, Immunex's biggest expense is marketing and administration.

Pharmaceutical companies have been criticized for using advertising to whip
up demand and pressure doctors to prescribe $100-a-month arthritis drugs like
Vioxx that are only slightly more effective than cheaper ibuprofen. Companies
spent $2.5 billion on such advertising in 2000, a report by the National
Institute for Health Care Management said. Vioxx, which uses Olympic
ice-skating champion Dorothy Hamill in ads, is more heavily promoted than
Budweiser.

Biotech companies don't need massive ad campaigns because they often aim at
smaller patient groups, but they are pitching their products indirectly.
Amgen, which makes the anemia drug Epogen, supports a TV public-awareness
campaign for anemia that features Danny Glover. Immunex has run TV spots to
raise awareness of rheumatoid arthritis, which could drum up more demand for
Enbrel.

Pharmaceutical companies spend more money on marketing than on anything else
- about 30 percent of their budgets, said Stephen Schondelmeyer, a
pharmaceutical economist at the University of Minnesota.

Most biotech marketing goes on behind the scenes. Instead of handing out free
samples, companies pay for ads in medical journals, hold seminars to teach
doctors how to use biotech drugs, support patient-advocacy groups such as the
National Kidney Foundation, and sponsor physicians' conferences, where they
tout their drugs. Small sales forces are aimed at medical specialists.

Biotech companies take exception to calling all that spending "marketing."

"What biotech companies do has less to do with marketing and more to do with
educating physicians," said Sharon Cohen, a vice president with the
Biotechnology Industry Organization.

COMPETITION

Competition among brand-name biotech drugs is sparse. Strong patents have
allowed Amgen's anemia drug, Epogen, to last more than 12 years without
competition. Enbrel has only one competitor on the market, Johnson &
Johnson's Remicade, which hasn't lowered the price of Enbrel.

Tight manufacturing rules from the U.S. Food and Drug Administration keep out
generic drugs. Biotech companies say that's justified because living proteins
aren't nearly as easy to copy as chemicals and should be protected.

Generic-drug companies are lobbying Congress and the FDA for permission to
make them anyway. One benefit would be lower biotech prices, said Clay
O'Dell, a spokesman for the Generic Pharmaceutical Association.

The group says its companies typically price drugs at 20 percent to 30
percent less than the price of brand-name drugs in the first year. By the
third year of generic competition, prices are 60 percent to 70 percent lower
as other competitors emerge.

PROFIT

Most biotech companies are losing money and struggling to get a hit product,
but the industry leaders are highly profitable.

Regence BlueShield pays $2,680 a month per patient for anemia treatments from
Amgen and Johnson & Johnson. Last year, Amgen had $4 billion in sales and
made $1.1 billion profit - a 28 percent profit margin. That beats the 18.5
percent average of pharmaceutical companies, America's most profitable
industry, Fortune magazine says.

Biotech chiefs such as Immunex's Fritzky and Bruce Carter of ZymoGenetics
make no apologies for making money. They say investors would turn their backs
on them if prices - and by extension, profits - were limited.

"Because of the risk and the failures, investors need to see that pot of gold
at the end of the rainbow," Carter said.

Schondelmeyer, the University of Minnesota pharmaceutical economist, said he
doesn't begrudge the drug industry profit, but he thinks it is excessive.

"I want them to innovate, and I want them to have an incentive to innovate,
but they could be one-fourth less profitable and still be the most-profitable
industry in America," Schondelmeyer said. "If you're an investor, why would
that make you put your money somewhere else?"

CONSEQUENCES

The National Institute for Health Care Management says the nation's drug
spending jumped 17 percent last year to $154 billion. Biotech products had
$18 billion in sales last year, accounting for one-tenth of the nation's drug
bill.

Pete Fullerton, an assistant vice president with Regence BlueShield, said
some insurers have responded to the increased spending by requiring more
prior approvals and by insisting that companies prove a drug's benefit over
less-expensive therapies.

Still, if new drugs offer advantages, insurers pay. Fullerton worries that
more drugs - and more $1,000-a-month biotech drugs - will add pressure to the
health-care system.

"There isn't enough money to continue to pay higher drug costs and still keep
health-insurance premiums down while we're trying to pay for more hospital
costs and more doctor costs," Fullerton said. "Something's got to give."

Davidson, the health-care administrator, agrees. Rising drug costs will force
more people to go uninsured, she said, causing patients to flood emergency
rooms, bankrupting health care and forcing health-care reform.

But as biotech-industry leaders say, such a crisis hasn't occurred and
biotech companies aren't expecting one. They are built on the idea that
Americans will pay for breakthroughs, Corixa Chief Executive Steve Gillis
said.

"The price of these therapies is worth it unless we want to be one of those
countries that says, 'OK, you have one of these diseases. Go ahead and die,'
" Gillis said. "We're not willing to do that." Copyright © 2002 The Seattle
Times Company

PART TWO - MONDAY 4/29/02

BIOLOGY CALLS SHOTS IN MAKING A DRUG
By Luke Timmerman - Seattle Times business reporter

Jim Thomas has spent 20 years coaxing hamster cells to make proteins that
improve people's lives.

The work has taught him and his crew at Immunex some serious lessons. He has
learned how biotech drugs are fundamentally different from traditional pills
and how much more difficult they are to mass-produce.

The reasons for that come down mostly to chemistry vs. biology.

Thomas and fellow scientists at the Seattle company can't rely on mixing
chemicals in a flask to produce a drug, as pharmaceutical companies do. To
make a drug like Enbrel, they use biological techniques that are boundlessly
complicated: They try to manipulate living cells into making drugs.

"The cell really has all the machinery," Thomas said. "We're getting the cell
to do all of this for us."

The process is extraordinarily complicated, time-consuming and expensive,
which means patients may have to wait months or years - and pay more - for
breakthrough drugs while biotech companies struggle to make them efficiently.

In the past, making drugs was relatively easy. Companies like Merck and
Pfizer have spent decades doing research that had little to do with cells.
They test relatively simple chemical compounds on animals, and test the most
promising ones in humans.

Once the drugs pass regulatory scrutiny, they sell them.

In principle, "small molecule" drugs work like a shotgun. They come in
tablets or capsules that are absorbed in the bloodstream, causing chemical
reactions that spread through the entire body, not just the sick parts.

When scientists find a chemical that seems to treat disease in animals, they
make large batches by heating, cooling, stirring and mixing in other
chemicals in a tightly controlled environment. Once mixed with inactive
ingredients and tested for quality, the manufacturing process can be done in
a few weeks.

Biotech drugs are completely different.

Most use copies of natural proteins or antibodies to home in on a specific
target in the body. Treatments are usually injected because proteins are too
fragile to withstand digestion.

The work that led to Enbrel, Immunex's popular drug for rheumatoid arthritis,
started when scientists cloned a key gene sequence in the 1980s.

Then they spent more than a decade figuring out how to turn the sequence into
proteins.

The final step was formulating those proteins into Enbrel and making huge
quantities of it.

To make Enbrel and other biotech drugs in large batches, Thomas and his crew
have to follow an intricate process. It starts by injecting the gene sequence
into host cells, usually cloned hamster cells because they are safe and mimic
how proteins are made in humans.

The hamster cells are delicate but they survive inside stainless-steel vats
filled with a nutrient broth.

That nutrient mixture carries all the vitamins, minerals and amino acids a
cell needs to survive as it would inside a body.

As long as scientists keep cells alive with a perfect balance of temperature,
oxygen, acidity and other variables, they can coax them to make proteins.

Keeping that perfect balance is extremely difficult, scientists say. The
temperature, for example, can vary by no more than one degree Celsius.

The acidity is even more critical: Cells produce carbon dioxide, which
constantly changes the pH levels, and if those levels swing even a tiny
fraction, cells can die.

After several weeks, the proteins are filtered away from unwanted
by-products. The end product is tested for weeks to ensure no misshapen
proteins made it through screens and that no unwanted bacteria, viruses or
carbohydrates hitchhiked along the way.

The process is so intricate that Jeff Richardson, spokesman for California
biotech giant Amgen, likened it to "making a snowflake the same (shape) every
time."

The techniques have proved difficult for Immunex. Seattle's leading biotech
company hasn't been able to keep up with demand for its drug, and it has
spent months tweaking processes to squeeze out at least 10 percent more from
its factories.

Compare that with the typical pill, which scientists say is relatively easy
to manufacture.

"The hard part isn't making a small-molecule drug, it's figuring out which
chemicals might work on diseases," said Rick Lapointe, vice president of
operations at Hollister-Stier in Spokane, which does contract manufacturing
for biotech and conventional drugs.

Scientists also have to consider what can go wrong with biotech
manufacturing. Viruses or bacteria can contaminate the batch at any step.
Proteins can be broken down by subtle environmental changes.

And just when scientists think they've created the perfect environment for
cells to grow in a 500-liter vat, they find it doesn't work in a 1,000-liter
vat or a 500-liter vat that's shaped slightly differently.

They don't know why.

Solving such a mystery isn't easy when every step is a tightly guarded secret
within each company.

Partly because of the culture of secrecy, few people in the biotech industry
understand the manufacturing process. High costs and companies' reluctance to
part with recipes helped drive many manufacturers out of business in the
early 1990s. Now there's a worldwide shortage of factory capacity.

Dave Vetterlein, head of manufacturing at Bothell-based Icos, said there are
fewer than two-dozen places in the world, including Immunex and Icos, that
can produce large quantities of biotech drugs.

Even the people who are among the best at it, such as Vetterlein and Thomas,
know their limitations.

"These are living organisms we're dealing with," Vetterlein said.
"Understanding them is like asking how we understand life, which has evolved
for billions of years. We're just scratching the surface."

The process is so baffling that scientists have a word for cell behavior.
They call cells "happy" if they are staying alive and not producing too many
misshapen proteins or carbohydrates.

Cynthia Robbins-Roth, founder of BioVenture Consultants and an early
scientist at California biotech-manufacturer Genentech, said the process is a
developing art.

She remembers a time at Genentech when many cells died in the summer and
scientists couldn't understand why. Eventually, they figured out the city
added chlorine to the water, and traces of it had slipped through purifiers.

"It's not easy when you have a biological organism making a drug,"
Robbins-Roth said. "Inherently, it's not as easy to control. Mother Nature
throws lots of little wrenches in the way."

Vetterlein said that any improvements in the process will take years, but
that it will happen because the field is advancing, though there's still a
lot to learn.

"Basic drug chemistry has been around for hundreds of years, and the laws
that govern those chemical reactions are pretty well understood," Vetterlein
said.

"With a biotech drug, you're basically in control of a living system. It's
kind of like how you keep a rabbit alive. It's not like you're in total
control, it's partly the rabbit."
Copyright © 2002 The Seattle Times Company

PART THREE - TUESDAY 4/30/02

ENBREL IS MIRACLE DRUG, UNTIL SUPPLIES RUN DRY
By Luke Timmerman - Seattle Times Business Reporter

Rebecca Ford once said she wanted to kiss the people who created Enbrel. It
made her crippling pain fade away and gave her back her life.

But she is about out of her miracle drug. Her rheumatoid arthritis flare-ups
are back, and her joints hurt so badly she can't sleep. Her 6-year-old son
refers to the pain as a bad guy named "Arthur."

"Arthur is visiting today, and Mommy isn't happy," he'll say.

Ford must live with the pain until Immunex can replenish supplies of the
drug. The Seattle biotech company wrote to its 82,000 current patients in
March, saying it was running short and that many would have to go without the
drug for a few days or weeks.

Immunex says all of its patients should be able to get their prescriptions
filled by June.

Such a wait is painful for both patients and the company.

Patients like Ford have grown to depend on twice-weekly Enbrel injections.
Without the drug, the pain, swelling and stiffness in their joints gradually
return, and they are panicked about the possibility. Many are venting their
frustrations in online support groups.

To Immunex, its round-the-clock struggle to keep up with demand is a constant
reminder of a success it never imagined.

Immunex executives say fixing the shortage for patients like Ford is the
company's top priority.

"All of this motivates us to get the drug out as quickly as possible," said
Peggy Phillips, chief operating officer. "These patients are hugely important
to us, and they have been ever since we started."

Phillips wouldn't say how many patients are running out, but all 82,000
taking the drug were sent the warning letter. No new patients have gotten
Enbrel since December, but about 1,000 a week are being added to a waiting
list.

The cause of the latest shortage is complicated. Enbrel is made at a factory
in Germany, and not every batch of the drug produces the same amount,
Phillips said.

Enbrel is not the only drug made there, she said, and production schedules
for other companies' drugs are packed this time of year.

"We are working around the clock and so are the people at (the German
factory) to do extra things to expedite the drug," Phillips said.

Immunex Chief Executive Ed Fritzky touched on the ongoing shortage in a
speech at the University of Washington earlier this month. When Enbrel was
approved in November 1998, he said, it was aimed at a narrow population of
patients with the most severe forms of rheumatoid arthritis and sold for
about $1,000 a month.

"Everybody thought since it was used in such severe patients, and it was such
an expensive product, people would adapt to it very slowly," Fritzky said.
"But people started seeing dramatic responses, and word of mouth started
spreading among patients."

At the time, Fritzky said, Immunex calculated it could have $500 million in
annual Enbrel sales after three years. It was far off - Enbrel became the
fastest-selling biotech drug ever.

It soared to $652 million in sales in its second full year. Analysts said
Enbrel sales could have topped $1 billion in the third full year if there had
been unlimited supply - double Immunex's forecast.

The problem is, it takes three to four years and about $450 million to build
a biotech factory, industry experts say. To meet demand, Immunex would have
had to make that risky investment in 1997, before it knew whether the drug
would be approved by the Food and Drug Administration.

Biotech drugs like Enbrel are inherently more difficult and time-consuming to
make than traditional pills. Enbrel is a protein made through genetic
engineering and grown inside hamster cells. Scientists haven't figured out
ways to get around the months of tests needed to ensure the purity of such
drugs.

Clarence Braddock, a professor of medical history and ethics at the UW, said
shortages may become more common, especially for difficult-to-make biotech
drugs like Enbrel.

That can be expected, he said, under the current gene-patenting system, which
allows companies to seize the rewards of their discoveries but also forces
the health-care system to rely on a single source of a vital drug.

That, Braddock said, means companies like Immunex have a greater ethical
responsibility to provide their products than do businesses that make things
like cars or furniture - especially when patients have such limited choices.

"Their obligation is very strong to do everything they humanly can do to fix
this problem," Braddock said.

"If it means stopping other efforts going on in the company to redirect
efforts to do this, that's what they have to do."

Arthur Caplan, a bioethicist at the University of Pennsylvania, said Immunex
should set up a distribution system that gives patients an equal shot at
limited supplies - whether it's using a lottery, giving first supplies to
patients in most serious need, or setting up a first-come, first-served
system.

Enbrel patients say Immunex hasn't told them exactly how it's handling
prescription refills.

Ford and other patients say they just want to know when they'll get their
prescriptions filled so they can get their lives back.

Tina Underwood, a mother of two from Ohio who coordinates an online
arthritis-support group, said she's been getting 25 e-mails a day from
patients either running out, rationing their Enbrel, or panicking about
running out.

Sue Kurak, an Enbrel patient in suburban St. Paul, Minn., ran out April 9 and
is not satisfied with the company's answers about when she'll get it back.

"They said, 'We don't have that information,' " Kurak said."I need to know.
This is my life."

Immunex is obligated to tell patients exactly what happened, how it's being
fixed, and when the shortage will end, Caplan said.

"They should explain exactly what they're doing," Caplan said. "In a
shortage, the best thing to do is be transparent, be open and be clear on the
strategies they're using to take care of their current patients first. The
more open you are, the more people are willing to accept the situation."

Immunex officials haven't publicly addressed complaints about their openness.
They say only they are committed to getting the drug to patients as quickly
as possible.

Fritzky said if patients have questions or concerns about the shortage, they
can call him at 206-587-0430.

Meanwhile, Kurak is wondering whether she needs to cancel a summer trip to
Disneyland with her children.

She's thinking about switching to Remicade, a competing drug from Johnson &
Johnson, but hesitates to give up on Enbrel because it has worked so well.

Many patients don't take Remicade because it has more potential side effects,
has to be taken with chemotherapy and needs to be given intravenously by a
medical professional. Enbrel patients can give themselves the shots at home.

Because the demand has been so great, Immunex started requiring patients to
register and get an ID card to get Enbrel. The system was designed to prevent
hoarding and to maximize the number who can get the drug. Patients also say
it was implied, if not promised, that if they enrolled, it would ensure a
stable supply.

In the meantime, Ford has scrambled to find some relief. She's gone to a
chiropractor and a massage therapist and is taking a higher dose of
Prednisone, a steroid pain reliever that can have serious side effects. She
also skipped a family bike ride, and is staying home more often.

Rick Ytreeide, a pharmacist at Lakeside Drug in Redmond, said his pharmacy
has several patients who have run out, and they are edgy. He's been trying to
assure them Immunex says the shortage is temporary.

Dr. Philip Mease, a rheumatologist at Swedish Medical Center, said six of the
200 Enbrel patients in his practice have called, upset and worried. He said
he's reassuring them the shortage shouldn't last more than four weeks, and
that because Enbrel slowly disappears from the body, patients won't feel
their pain again for a couple weeks.

Even then, he said, it should be temporary because the shortage likely will
be over.

Still, he said, it's not easy to comfort patients.

"It has been such a dramatic drug that many patients now appreciate a new way
of life," Mease said. "They don't want to lose it."

Luke Timmerman can be reached at 206-515-5644 or ltimmerman@seattletimes.com.

Copyright © 2002 The Seattle Times Company

Hope this has been both timely and helpful.

Good Health to All

Jack Nicholas
Newsletter Editor
Cornishpro@aol.com
Issue 2002 4/30/2002 - 11