Academic journal article Entrepreneurship: Theory and Practice

Opt-E-Scrip, Inc

Academic journal article Entrepreneurship: Theory and Practice

Opt-E-Scrip, Inc

Article excerpt

Opt-e-scrip, Inc., has developed a patented test for determining the efficacy of drugs in individual patients so that doctors can prescribe the drug that really works for each person. In addition, test results show that older, less expensive drugs are often as or more efficacious than the newer, expensive drugs pushed by manufacturers. It, thus, benefits physicians, patients, and drug benefit payers. However, the company has had difficulty entering the market, given its complexity and their lack of resources. The test remains a product in search of an application and a customer willing to pay for its usage.

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Pop!! Fred Huser poured the champagne and raised his glass in a toast: "Here's to Opt-e-scrip! It's been a crazy ride of ups and downs. We've hit a few roadblocks, made some detours, but I am confident that we will make our way to the finish line." It was New Year's Eve 2004, and Huser, the CEO, was excited to toast the coming year. It had been almost 5 years since he and his partner, Dr. Donald Reitberg, President, Scientific Affairs, had started Opt-e-scrip, Inc. (OES). They had just received commitments for $1 million in financing, and Huser was eager to try a new strategy for getting their product, a personalized medicine test (PMT), into the pharmaceutical market. He was seriously weighing two options: transforming the company into a health insurer or a manager of drug benefit plans. He had considered but dismissed a third option, essentially "calling it quits," as he remained optimistic that the PMT was the magic pill, so to speak, that would eventually transform the way chronic-care drugs were prescribed and sold.

Overview

Huser and Reitberg came from the pharmaceutical industry: Huser from marketing, and Reitberg from R&D. Both were convinced that the industry could give, and its customers should be getting, better value from prescription drug therapy.

To be approved by the U.S. Food and Drug Administration (FDA), a new drug had to be proved safe and effective through studies in which one group of patients received the test drug while a second group usually received a placebo. (1) The patient groups used in the testing were typically homogeneous (usually younger, healthy, white, and, historically, male)--ignoring the fact that drug response could be very idiosyncratic, varying widely among different patients. To prove efficacy, the test group's response to the test drug was required to be statistically higher than the placebo group's response to the placebo for these homogeneous test groups (S. Toker, MD, personal communication, May 17, 2007). The testing did not prove that the test drug was more effective than competing (perhaps cheaper) drugs (Meier, 2004, p. C1). Nor did it prove that that the test drug would work in any one particular patient, or even that it would work in a majority of patients. Hence, when a doctor prescribed a drug, there was no certainty that this was the best medication for that patient.

Opt-e-scrip, Inc. sought to measure a person's response to a drug by utilizing an individual test that would compare a test drug and a control drug; the patient would take both, and the results would show the patient's own drug reaction. The objective was to help physicians and patients find the best drug therapy and, at the same time, steer patients away from expensive new therapies if they were not beneficial.

Product, Potential, Pricing, and Primary Benefits

The personalized medicine test (PMT) typically contained two competing prescription medications--a name brand drug and a less expensive therapeutic substitute (a generic version of an older name brand drug that treated the same condition but had gone off patent). The medications were only for chronic ailments--requiring long-term, perhaps life-long, therapy. The PMT could also pair a drug and a placebo or different doses of the same drug.

The drugs were blinded (encapsulated so that the patient did not know what he or she was taking), and their order in the kits was randomized to preclude any order bias. …

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