Favorite flu fighters: Tamiflu or Relenza?

I can find no clinical evidence that Tamiflu--one of the two main pharmaceutical weapons against an epidemic or pandemic of Type A influenza--is substantially more effective than its competitor Relenza.

I can find abundant evidence, however, that Switzerland's Roche has much better packaging for Tamiflu, and that it is therefore (a lot) more expensive than GlaxoSmithKline's Relenza. If this isn't a business school case study in the importance of packaging, it surely will be.

British science journal The Lancet published an article on Aug. 12, 2005, that said Relenza was just as effective as Tamiflu and caused fewer side effects. Patients taking Relenza in The Lancet study showed no evidence of resistance to the drug, while 18 percent of those taking Tamiflu did show signs of resistance to that drug.

But Roche has run marketing circles around U.K.-headquartered GSK by emphasizing the convenience of swallowing a Tamiflu gelcap over the hassle of inhaling Relenza powder. The current frenzy to acquire emergency stockpiles of Roche's Tamiflu at ludicrously-inflated prices is simply a marketing triumph for Roche.

How big is a "triumph"?

My personal experience: I bought a course (10 capsules) of 75mg Tamiflu from the Walgreens pharmacy chain in the United States in October 2005 for US$85.00. I bought a Diskhaler and Rotadisk of the equivalent dosage of Relenza from my physician in Singapore in November 2005 for US$30.00.

So far, Roche has sold US$770 million worth of Tamiflu in 2006, according to their just-released first half results, up 62 percent over 2005. The financial report said demand was "driven by pandemic deliveries". That's a US$1.5 billion annual run-rate for a drug of which Roche sold US$345 million just three years ago (2003 sales at today's exchange rate). This is the same drug Roche had to recall in 2002 because of manufacturing problems.

On the other hand, GSK sold just US$13 million of Relenza in the first three months of this year. (GSK will announce its 2006 first half results this week on Jul. 26, 2006.)

Despite such disparate financial results, the scientific and commercial histories of the drugs are remarkably similar.

Both oseltamivir phosphate (Tamiflu) and zanamivir (Relenza) are neuraminidase inhibitors (NAIs). Neuraminidase is a protein on the surface of an influenza virus that enhances its ability to scatter scraps of virus to infect other cells. By inhibiting that action, NAIs proved more effective than their predecessors, M2-inhibitors amantadine and rimantadine hydrochlorides, at reducing the severity and duration of flu symptoms in humans.

Both drugs were invented by small biotech companies: oseltamivir phosphate by San Francisco-area Gilead Sciences, zanamivir by Melbourne, Australia-based Biota Holdings. Three Australian scientists shared the Australia Prize in 1996 for the invention of zanamivir, the first NAI.

Both companies licensed their products to pharmaceutical giants in order to fund expensive R&D. Biota licensed zanamivir to Glaxo Wellcome (which became GlaxoSmithKline in a 2000 merger with SmithKline Beecham) in 1990 for 10 percent royalties on sales in Australia and New Zealand, and 7 percent royalties on sales in the rest of the world. Zanamivir underwent five years of trials and was a "hit" when it was launched under the name Relenza in 1999. But in 2003-2004, GSK returned only a paltry AU$1 million (US$751,616) in royalties to Biota, even as "bird flu" fears began to sweep the globe.

Gilead licensed oseltamivir to F. Hoffmann-La Roche Ltd (known as "Roche" in the United States) in September 1996. In exchange for paying "all research and development costs", Roche obtained exclusive global rights to "GS 4104", now known as Tamiflu. Roche has worldwide commercial rights to Tamiflu, and Gilead receives royalties on product sales.

Both inventors have fought with their marketing partners over their anaemic marketing efforts (does this sound like Hollywood to you, too?). Biota sued Glaxo in May 2004, demanding back royalties they claim amount to at least AU$300 million (US$226 million) ; Glaxo responded, "We lost a lot of money promoting it... the demand wasn't there."

Biota was so unhappy it created a 5-page "backgrounder" on its Web site about the history of its relationship with GSK; if only the effort had been directed toward selling more Relenza... Mediation is scheduled for November 2006; stay tuned for a settlement.

Both GSK and Roche responded to their critics with the same defense, pointing out that doctors and patients prefer to prevent influenza infections with annual vaccinations rather than treating influenza by swallowing or inhaling antiviral drugs.

And then along came avian influenza, and suddenly..."ahhh...choo!"... billions of potential new consumers overnight.

Suddenly both companies are struggling to meet explosive global demand for their newly-trendy antivirals. In November 2005, Roche and Gilead Sciences made peace by sharing control of production and sales of oseltamivir.

And according to David Cyranoski writing in Nature Medicine magazine, "GlaxoSmithKiline is considering re-packaging Relenza as a shot or a nebulizer to increase sales."

What a difference a package and a little time can make.