Flu Drug Ban Has Glaxo in a Sweat; Industry Chiefs Take Stock as Treatment Fails Cost-Effectiveness Test

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Dismayed: Sir R ichar d Sykes h ad big hopes f or Relenza FOR a wonder drug that is supposed to treat flu, Relenza has given its creator Glaxo Wellcome a thumping headache.

On Friday the worst fears of Glaxo chairman Sir Richard Sykes were confirmed when Health Secretary Frank Dobson banned the new drug on the NHS because it was not 'cost-effective'.

Glaxo claims that Relenza will shorten the duration of flu by up to two days, but it costs [pounds sterling]25 for a five-day course.

The government has decided that this is not worth the money, even though flu claims about 4,000 lives each year. Instead it wants to encourage more people to have flu jabs, which are cheaper.

The decision, which came despite a last-ditch meeting on Friday morning between Sykes and Dob-son, has major implications for Glaxo and the drugs industry.

The first signs that Relenza's prospects were in doubt emerged from a fax to the group's regulatory affairs department at Stockley Park near Heathrow airport on September 29.

The fax from the National Institute for Clinical Excellence, a recently formed panel of experts set up by the government, warned Glaxo that it would advise ministers to ban Relenza from being prescribed on the NHS even though it had been cleared for sale by drugs authorities worldwide, including Britain's.

For a letter that contained a landmark ruling with global implications, it was brief. Nor could its no-nonsense tone have helped an already tense atmosphere at Glaxo's head office in Greenford, Middlesex, where a 3,400 worldwide redundancy programme was being finalised.

Sir Richard, on a business trip to Glaxo's nerve centre in north Carolina, was told the news by the group's UK managing director Douglas Hurt, in charge of Relenza's UK introduction.

The institute had dashed Glaxo's plans for its expected launch this winter, giving the company just 24 hours to prepare an appeal. That was also rejected, sparking a major controversy about NHS rationing and an unprecedented rebellion by the entire pharmaceuticals industry.

By the time Sir Richard flew back on Concorde to his smart new office overlooking Horsden Hill, news of Relenza's rejection had begun circulating at the Labour conference in Bournemouth.

Reading the news in the daily papers the next day, the mood blackened markedly within Glaxo.

But its 30-strong lobbying and public relations machine wasted little time springing into action as Sir Richard took charge.

BY LATE on Friday, October 1, an enraged Sir Richard had fired off a letter to Dob-son, and copied it to Tony Blair, threatening to move Glaxo overseas unless the decision was overturned.

He claimed that the decision would damage the British drugs industry and discourage future spending on research and innovation in the UK. The move struck a chord across the industry as the decision has ushered in a so-called 'fourth hurdle' before drugs can be made available to patients. …