Some powerful people in the pharmaceutical industry would like to see Brian Overstreet and his startup fall flat. Big pharma companies, on a few occasions, have told him to stop his spiel immediately, because they were afraid they could be put in a legally and ethically dubious position by hearing one more word.
When I told a Bay Area venture capitalist about Overstreet’s startup concept last week, it triggered a gut reaction. “I’d like to put that one out of business!” the VC said (I think half-jokingly. I think).
All the nervousness is coming from a new company called AdverseEvents.com, a Healdsburg, CA-based startup that seeks to bring order to the notoriously sloppy world of reporting on adverse events, the bad reactions people have to prescription drugs. The company, which emerged from stealth mode yesterday at the Health 2.0 conference in San Francisco, has devised a 17-step “data refinement process” to help doctors and health officials gather meaningful insights from the FDA’s adverse event records database known as Medwatch.
The current system—in which doctors voluntarily fax or e-mail forms about bad reactions they suspect are drug-related—has numerous well-documented flaws. Only about 500,000 reports are sent to the FDA each year, about one-tenth of the estimated number of actual bad reactions. And once reports get entered, they are littered with misspellings, misclassifications, incomplete entries, and incompatible file formats that make it extremely difficult to search the database. Those barriers have made it tough for the FDA, or anyone else, to spot the early warning signs of a dangerous drug until millions of people have been exposed, creating front-page scandals and highly litigious cases like the ones with the pain reliever rofecoxib (Vioxx) and the diabetes drug rosiglitazone (Avandia).
If AdverseEvents.com can iron out the problems in the Medwatch database, and become an online repository for simpler side effect reporting, it’s conceivable this little startup could someday become an essential online resource for tracking side effects of $1 trillion worth of prescription meds sold around the world. It’s the kind of data source that could make or break multi-billion dollar products, and in some cases, entire companies.
“The FDA is making labeling decisions, product withdrawal decisions, post-market safety decisions based on raw data and it’s very clear there’s no way they can accurately do that,” Overstreet says. “It was a very scary moment when we realized that, but from an entrepreneurial standpoint, it’s a great opportunity.”
AdverseEvents.com, like a lot of health startups, got its founding inspiration from a personal experience. Overstreet, previously the co-founder and CEO of Sagient Research, became interested in the issue in January 2010 when a partner’s wife got sick from a bad drug reaction and ended up hospitalized. He and his partner did some basic Internet searches to find out data on rates and severity of side effects linked to the drug in question, and came up empty-handed. The only useful information came from the drug’s FDA-approved prescribing information, which is based on results from small, controlled clinical trials—not from real-world experience with the tens of thousands or even millions of people who may have been prescribed the drug.
The partner’s wife ended up recovering from her illness, but Overstreet and the other co-founders he had worked with at Sageint—Henry Duong and Robert Kyle—remained intrigued by this hard-core data problem.
The scope of this data problem is daunting. For example, the sleeping pill zolpidem tartrate (Ambien) is entered in the Medwatch database under 440 different names, Overstreet says. It confuses people because it comes in different formulations, the chemical names are tricky, and there are different names for the compound in different countries. Every time someone spells it differently in a Medwatch report, it looks like a different drug. And some of the reports come in hand-written by doctors, leaving some poor bureaucrat at the FDA responsible for transcribing the doctor’s intent as best he or she can.
Medwatch reports are public records, and it wasn’t long before Overstreet and his team found a way to tap into a FDA web portal to take a deeper look. Being in the data business, they figured it would take six months to set up a SQL database to make it so doctors, pharma companies, insurers, pharmacists could run smooth queries about, say, cases of sleepwalking in people on Ambien. It ended up being an “odyssey” of 18 months of cleaning up the FDA’s data, Overstreet says.
“We’ve had to apply some heavy duty data cleaning techniques to figure out what people are trying to say,” in the Medwatch reports, Overstreet says. “Every layer we peeled back in the data got worse and worse.”
AdverseEvents.com raised an undisclosed amount of angel financing in the spring of 2011 when it became more clear that it was making headway on this dataset, and it plans to raise a venture round later this year, Overstreet says. The business model is a straightforward subscription model. Pharmaceutical companies, pharmacy companies, insurers will have to pay to get premium access to the database, where they can run queries about side effects of specific drugs. Patients can get data for free, although AdverseEvents.com envisions a premium feature in which a patient who’s taking, say, a cholesterol-lowering drug can get an e-mail or text message alert when a worrisome pattern of adverse events starts showing up with that drug.
Patients are already using the web to report voluntarily on their side effects, outside the traditional bounds of Medwatch reports. There’s that little thing called Facebook with 800 million active users, plus websites like PatientsLikeMe which has become a highly interactive forum for patients with chronic diseases. But neither is set up to do what AdverseEvents.com is trying to do, Overstreet says. “Nobody else is trying to capture adverse events in a central database like us. PatientsLikeMe is a great service that creates communities around disease groups, and allows people to share treatment options and experiences, but translating that into useable stat data which can drive actual decision making in the future is a step beyond what they focus on,” Overstreet says.
It’s hard to overstate how disruptive something like this could be to the pharmaceutical business. Pharma companies have a legal duty to report adverse events on their own products to the FDA when they become aware of them—which Overstreet says creates a powerful incentive for them to stick their heads in the sand.
“Their initial reaction is something like ‘Whoa, I don’t want to know about that,’ because when they do, they have to report it,” Overstreet says. AdverseEvents.com, he says, wants to persuade pharma companies that it’s in their interest to embrace the data to help foster more efficient drug development, and better manage interactions with doctors and patients. “Some people get it, and want to jump right on it,” Overstreet says. “Others say ‘I can’t talk to you, I don’t want to know anything about you.’ My candid, somewhat polite response is ‘You need to understand the data is coming. And you’ll have to deal with it.'”
Overstreet says he hasn’t yet sat down to talk with the FDA about the implications of this new searchable database, and how the U.S. drug regulator can use it, but he says he plans to meet with the agency soon. The company has already submitted a brief analysis from its database for an upcoming advisory panel the FDA is holding on osteoporosis drugs. If the database is as good as he says, I can imagine the FDA will want unfettered access. Because the FDA has made clear over the years it doesn’t like getting blindsided by side effects of blockbuster marketed drugs, and getting hauled before Congress to explain the screw-up.
How much this business could be worth, and how big its market might be, is really anybody’s guess. The answer will depend on how good the database really is at sorting through the morass of FDA Medwatch reports, and ultimately, how good it is at enticing patients and doctors to start dumping all their new adverse event reports in its simple, modern web interface. If AdverseEvents.com can do that—and not get squashed by the big guys in Big Pharma, it’s conceivable that it could charge a lot for access to its data.
“No matter how you slice and dice it, proprietary data that impacts how the money flows in pharmaceuticals has potential to be very significant. We need to figure it out,” Overstreet says.
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