Quintiles’ Dennis Gillings Profiled in Forbes
There’s been lots of discussion in the blogosphere and Twittersphere this week about Matthew Herper’s excellent profile of CRO CEO, Dennis Gillings, entitled Money, Math, and Medicine, and a follow-up this morning on Gillings’ comments about China overtaking the US in biotech prominence.
The profile is planned for the November 22nd print issue of Forbes magazine but appeared online earlier this week.
Gillings is a local hero in the Research Triangle area as a former UNC-Chapel Hill professor who has developed a privately-held company that Herper says has “annual sales of $3 billion, $500 million in earnings before interest, taxes, depreciation and amortization, and $400 million in free cash flow.” Gillings and his wife, Joan, also gave a $50 million gift to UNC in 2007 – the largest ever in the 221-year history of the university – and are the namesakes of their highly-regarded Global School of Public Health (disclosure: my wife is a MPH student and preventive medicine resident there).
The buzz about Herper’s profile article is due partly because of how Quintiles and other CROs are viewed in academic medicine units that try to compete with these companies for pharma-sponsored clinical trials. Some critics, such as Robert Harrington of Duke’s Clinical Research Institute (DCRI), state that CROs lack appropriate distance from their corporate clients.
For a basic scientist, I’ve been thinking a fair bit about clinical trials ethics after I attended a talk last week by Ross McKinney, MD, head of Duke’s Trent Center for Humanities, Bioethics, and History of Medicine (I wrote about my impressions here for my monthly gig for the cooperative blog, Science-Based Medicine).
What struck me instead from Herper’s article is a revenue-sharing model set up in 2000 by Gillings, one that was first viewed by analysts as ill-advised but that turned out to be quite prescient. Again, from Herper:
Gillings’ solution is to help his clients by investing cash they can use to develop their medicines, in return for royalties if the drug makes it to market. . .
. . .Quintiles invested $110 million in [Eli Lilly’s antidepressant Cymbalta] and spent $300 million marketing it. It has fielded a third of the sales reps pitching the drug to internists. In return it got an 8.5% royalty on Cymbalta’s U.S. sales (now $2.6 billion a year) for the first five years the drug was on the market; it gets a 3% sales royalty through 2012.
It’s not clear to me whether Quintiles invests in drugs who trials they manage but regardless, this approach seems to represent a significant conflict of interest. Gillings emphasized to Herper that the company takes “a paranoid approach” to avoiding ethical breaches but this one seems to be one with great potential for such.
Granted, I am not a clinical trialist but the client investment model described in Herper’s article seems to have evaded discussion in the sci/med blogosphere.
Am I missing something?
UPDATE: Nov 6, 10:19 am – Yes, I was missing something: Herper put up a second blogpost elaborating more on this issue with further justification from Gillings that their model actually has less potential for COI than the current pharma model. Thank you, Matthew.
Matthew Herper. Money, Math, and Medicine. Forbes.com, 3 November 2010.
Matthew Herper. Could China Steal America’s Biotech Crown? Forbes.com blog, The Medicine Show, 5 November 2010.