Pharmaceutical News

Drug Firms Must Swallow Bitter Pill

It’s “crunch time” for the pharmaceutical sector and drug makers are worried sick.

Representatives from the sector descended upon London this week to discuss the industry’s ailments. All were stunned by the bleak outlook.

Big Pharma got fat and complacent during many years of reaping huge profits from blockbuster drugs and incremental “me too” uses of existing medicines. But those days are gone. Meanwhile, a converging flow of pressures is hitting the sector.

“This stark environment includes patent protection “cliffs”, lack of drug innovation, increasing pressures from payors on both sides of the Atlantic, and litigation, among other things,” explains GlaxoSmithKline’s chief strategy officer David Redfern.

The London conference, dubbed “Reinventing Pharma For A New Generation” was told the painful truth of the situation, and that time has run out.

Hakan Bjorklund, chief executive of privately-held Nycomed of Switzerland, said:

“This industry faces really significant challenges and it’s shrinking right now. It all has to do with R&D productivity. But it also has to do with the willingness of payers to pay, especially for innovation.”

The problem is compounded by the industry’s poor record of R&D productivity, high failure rate, rising costs and more stringent regulatory hurdles—all of which helped push the cost of bringing a new drug through R&D and on to market more than the $1 billion mark.

Such pain is causing large drug makers to retrench their R&D operations, most notably Pfizer, the world’s largest drug maker, which this month said it will close its major R&D center in southern England as part of a move to slash R&D costs by up to 23.5%.

“What we’re seeing is that the industry’s drug makers don’t believe the money it has spent on R&D over the last few years was money well spent, and that’s why we’re seeing these dramatic reductions in R&D, the obvious case being Pfizer,” said Bjorklund. “AstraZeneca announced the closure of two very large sites as well and. I don’t think we’ve seen the end of that. There will be more of it, definitely.”

So what’s the answer?

Glaxo’s Redfern says focused strategy and its execution will be key. It’s also up to the big pharmaceutical companies to lead the way in a proactive, deliberate way, in partnership with their many stakeholders, if the industry wants to repair its reputation.

Redfern said:

“We’ve gone from terrible to average, but there is an opportunity to respond to society and be proactive in taking the trust agenda forward and that means being attuned with a very broad group of stakeholders.”

He cite actively working to reduce pollution generated through the processes of drug making as an example.

Nycomed’s Bjorklund agrees.

“We need to work on our credibility. And then of course we need to focus on products that make a difference, and not just making a difference from an economic point of view, but also from a medical point of view.

“That may mean scientists having to spend more money. But the whole society out there needs to realize that R&D is very expensive. And if you’re not willing to pay for the R&D, there’s going to be very few products coming out. That’s the sad truth.”

Industry accepts decision not to raise drug prices

The Health minister’s decision not to award any increase in the single exit price of drugs this year was in line with the agreed methodology and came as no surprise to the industry, pharmaceutical companies said yesterday.

Aaron Motsoaledi, the Minister of Health, told the industry two months ago that there would be a zero percent rise for medicines this year.

Yesterday Anban Pillay, the director for pharmaceutical economic evaluations in the Department of Health, said that after applying the formula that took into account inflation (70 percent) and the exchange rate (30 percent), it was clear firms could not be allowed to hike prices as the strong rand outweighed mild inflation.

“The industry would have had to decrease the prices, but it was proposed that there should instead be a zero percent increase. This was communicated with the industry,” said Pillay.

Drug makers are vulnerable to the exchange rate because they import all the active pharmaceutical ingredients. This includes the firms that manufacture drugs locally.

Paul Anley, the managing director of Pharma Dynamics, said Motsoaledi’s decision was fair if one took into account the fact that the rand strengthened considerably last year.

“We call on the minister to consistently apply this formula as it is in years when he should grant an increase. We managed our cost base well because of the strong rand, but with the rand weakening, the opposite will happen this year,” said Anley.

Last year Motsoaledi approved a 7.4 percent increase. Stavros Nicolaou, a senior executive at Aspen Pharmacare, said the firm welcomed the decision as it was in accordance with the methodology that the industry and the government had agreed on. “It works out to a neutral position for us as we all have a currency exposure,” said Nicolaou.

In Quest For A Female Viagra, Many An Odd Twist

As demonstrated by the box-office belly-flop of Love and Other Drugs, Viagra and its competitors now rate a shrug. A mere 12 years after the first erectile dysfunction drug was introduced, audiences were barely titillated by the tale of a Viagra salesman and his romance-spurning sex partner.

But FSD — female sexual dysfunction — remains a hot topic. While a pharmaceutical solution for feminine erotic discontents could be a huge money-maker, such treatments have proved much more difficult to develop than Viagra. Orgasm Inc. provides an overview of the struggle — and makes it plain it isn’t simply a battle to bring a new product to market. Director Liz Canner’s saga of medical overreaching lacks major revelations, but it’s smartly constructed, briskly edited and sometimes very funny.

There are many approaches to FSD, including to deny that it even exists. Unlike ED, it isn’t a simple matter of hydraulics. Companies seeking a female counterpart to Viagra seek to “cure” not only lack of desire and failure to reach orgasm, but also failure to reach orgasm the “right” way. The condition’s causes are diverse, and range from the physical (a hysterectomy) to the inexplicable.

In short, no one knows what FSD is. But as Canner shows in a humorous montage, TV talkers from local news anchors all the way up to Oprah Winfrey were prepared to tell their viewers that 43% of women have it. (That number, Canner indicates, came from a vague, unscientific survey.)

Canner entered this world as an eroto-industrial filmmaker, editing pornography that would be screened for women enlisted in clinical trials run by a California company. Vivus, which had lost the ED market to Pfizer, saw its stock price spike when word got around that it was developing the female Viagra. But its product never outperformed a placebo.

Through her editing gig, Canner met Kim Airs, who sells products that bring satisfaction to some women: vibrators and female-oriented porn. She’s so certain of her merchandise’s value that she attempts to show them at a pharmaceutical convention. (Barred from the display area, she sets up in a nearby hotel suite.)

The movie’s other voices include Ray Moynihan, an Australian critic of “medicalizing” every human complaint, and Leonore Tiefer, an NYU psychologist who keeps a close eye on the Food and Drug Administration. So far, the FDA has not approved a “pink Viagra,” although a testosterone patch for unfulfilled women has been approved by European Union regulators.

On the other side are advocates for new FSD drugs who don’t reveal their ties to the drug industry, flacks for the growing and potentially dangerous “vaginoplasty” business, and a guy who’s testing an Orgasmatron. (Apparently, the one in Sleeper worked better.)

Orgasm Inc. also takes a brief foray into the 19th century, where women suffered “hysteria” rather than FSD, and quickly surveys some of the other conditions that Big Pharma has turned into diseases. If the industry can treat “restless leg syndrome,” why not erotic dissatisfaction? Some of the issues Canner raises, such as the way doctors are encouraged to prescribe drugs for non-approved uses, are much broader than her film’s focus.

Following one of the current documentary vogues, the director punctuates the movie with animated sequences, which are both overly cutesy and entirely unnecessary. Canner’s eye-opening, entertaining account of the search for the little pill that supplies the Big O is loony-toons enough without the cartoon asides.

Big Pharma shows willingness to pool HIV and Aids drug patents

HIV and Aids may be slipping off the news agenda – see the Kaiser Family Foundation report on global health journalism, which is here – but the determined bunch of people who have got the patent pool for Aids drugs up and running are not only quietly working away, but getting results.

Not long ago there were those who doubted whether the Geneva-based Medicines Patent Pool would manage to persuade any of the big pharmaceutical companies that it was a reasonable idea to allow their patents on Aids drugs to be “pooled”. Unitaid, which works to improve access to medicines in developing countries and set it up, argued long and hard that the pool was necessary. It would allow generic manufacturers in countries like India and China to make legitimate cheap combinations of some of today’s advanced HIV medicines. Cheap new combinations are going to be vital in the fight to keep millions alive in the developing world as HIV inevitably develops resistance to the basic drugs now available in poor countries.

But today, two months after sending out letters inviting the major makers of Aids drugs to get involved, the patent pool announced that it is in negotiations or preparing to enter negotiations with F. Hoffman-La Roche, Gilead Sciences, Sequoia Pharmaceuticals, and ViiV Healthcare (a joint venture of GlaxoSmithKline and Pfizer). The big surprise for the sceptics is Viiv. GSK (which has far more Aids drugs than Pfizer) had appeared uninterested in the concept. Its chief executive Andrew Witty, while committed to improving access to its medicines in poor countries, said they were taking other routes.

Obviously an interest in negotiations is not the same thing as agreeing to licence your drugs for pooling purposes, but Viiv has taken the first step. The patent pool has listed all the companies it has approached on its website here, and in a nice touch, has put up the letters from those that are, shall we say, less than enthusiastic. The table will be updated every quarter. It will be worth watching.

Pharmacists ‘should be trained for industry changes’

Those employed in pharmacy jobs should be trained to deal with the changes in the industry, one expert maintains.

Rob Darracott, chief executive of Pharmacy Voice, said that with the immigration caps coming into play, the supply and demand of pharmacists will change.

He added that the evolving services community pharmacists will be expected to provide mean that the graduate skills required will continue to change over time.

“It is important that the whole pharmacy team – not just the pharmacist – receives appropriate training to enable them to keep pace with the changes and challenges in the industry.”

This comes after news that those employed in pharmacy jobs at Boots stores in the UK could soon be responsible for administering crucial services previously provided through the NHS.

According to the Daily Mail, the NHS is engaged in discussions with the high street chain to establish whether some services could be offered in store.

UK Pharmaceutical industry concerned about immigration cap

According to an pharmaceutical industry advocate group, there has been a significant reduction in the number of non-EU pharmacists working in the UK due to the recent immigration cap imposed by the Government.
“[The immigration cap] affected non-EU overseas pharmacy students who have just completed their UK degree and who have had offers of pre-registration training jeopardised by the ruling,” said Rob Darracott, chief executive of Pharmacy Voice said.

The UK Government imposed a temporary cap on immigration in 2010 that will become permanent in April of 2011. In addition to the cap, the popular Tier 1 (General) highly skilled immigration route will be replaced by an ‘exceptional talent’ visa which will be extremely difficult to obtain.

The UK is likely to axe the Tier 1 (Post Study Work) visa which allows foreign graduates of UK universities to work in the UK after their studies.

The pharmaceutical industry isn’t the only sector worried about the immigration cap and further changes to the immigration laws. The education industry in the UK is likely to suffer after the expected tightening of the student immigration rules take place.

Prime Therapeutics President and CEO Eric Elliott Presents Keynote Address at 2011 PCMA Managed Markets Educational Forum

Attendees at the 2011 Pharmaceutical Care Management Association (PCMA)’s Managed Markets Educational Forum today heard Prime Therapeutics’ President and CEO Eric Elliott speak about the critical changes facing pharmaceutical companies and pharmacy benefit managers as health care reform is implemented, industry consolidation increases, a greater number of generics enter the market and the pipeline of new treatments shrinks. Prime Therapeutics is a pharmacy benefit management (PBM) company dedicated to providing innovative, clinically-based, cost-effective pharmacy solutions for clients and members.

“In this time of great change, the industry needs to address the three key areas of cost, quality and access. We need to work together to help patients safely navigate these changes, so that we may continue to deliver the right drugs, at the right time, at affordable prices,” Elliott told attendees.

In his keynote address, Elliott spoke about how the industry has evolved and delivered improvements to patient health over the past several decades. In the coming years as more than 30 million patients join the health system, there will be a greater focus on providing higher quality care for patients while increasing value.

“While we may not all agree on each provision of the health care reform law, there are many provisions encouraging better outcomes and better cost management for our patients and clients,” said Elliott. “There is an enormous potential to close gaps in care in our country. Whether the potential is realized will depend to a significant degree on how well we do helping patients access and stick to their medications, while managing costs.”

Delivered to an audience of pharmaceutical manufacturers and other industry experts, Elliott’s speech was the meeting’s opening keynote address. The first-annual Managed Markets Educational Forum brings together leaders in the pharmaceutical and pharmacy benefits industries to discuss essential PBM, specialty pharmacy and payer issues.

Prime Therapeutics is a pharmacy benefit management company dedicated to providing innovative, clinically-based, cost-effective pharmacy solutions for clients and members. Providing pharmacy benefit services nationwide to nearly 17 million covered lives, its client base includes Blue Cross and Blue Shield Plans, employer and union groups, and third-party administrators. Headquartered in St. Paul, Minnesota, Prime Therapeutics is collectively owned by 12 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those Plans.

FDA issues warning letter to makers of ‘Viagra coffee’

Magic Power Coffee has come under government scrutiny for claiming its product, which is only sold online, is a “100% natural” dietary supplement that can enhance sexual performance.

However, a Food and Drug Administration laboratory test found that at least one batch of the coffee product also contained hydroxythiohomosildenafil, a compound similar to the drug sildenafil, the active ingredient in Pfizer’s Viagra.

This undisclosed inclusion of a pharmaceutical component prompted the FDA to warn consumers last June to avoid the product and to report any adverse health effects to the agency.

Despite the manufacturer’s mass voluntary recall of all Magic Power Coffee made before May 8, 2010, the FDA then sent the company a letter Aug. 23 warning that the marketing and distribution methods for Magic Power Coffee violate the federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301.

Why did the FDA issue a warning letter?

Since 2004, the FDA has monitored the online marketing of so-called dietary supplements that claim to treat erectile dysfunction and enhance sexual performance. The agency has found that some of these unapproved products, despite being presented as all-natural alternatives to prescription drugs like Viagra, Levitra and Cialis, actually contain undisclosed amounts of the same pharmaceutical ingredients in those FDA-approved drugs.

FDA approval is required for these types of drugs because they pose serious health risks to certain classes of consumers. Specifically, these drugs (known as PDE 5 inhibitors) may interact with nitrates, commonly taken by consumers with diabetes, high blood pressure, high cholesterol or heart disease, to cause blood pressure to drop to unsafe levels.

The FDA’s concern is that consumers who are unable to obtain prescriptions for Viagra, Levitra or Cialis may be using alternative products such as Magic Power Coffee, unaware of the serious risks and consequences that they pose.

According to the FDA’s warning letter, the inclusion of hydroxythiohomosildenafil in Magic Power Coffee meant that the product could not be properly marketed either as a dietary supplement or as a conventional food, as its labeling suggested.

The drug’s presence, along with claims such as “Serving Passion One Cup at a Time” and “For best results, use approximately 30-45 minutes prior to engaging in sexual intercourse,” led the FDA to find that Magic Power Coffee qualified as a “drug” under the Food, Drug and Cosmetic Act as the product was intended to affect the structure or function of the body.

More specifically, the agency found that the product constituted a “new drug” under the FDCA because it was “not generally recognized as safe and effective for use under the conditions proscribed, recommended or suggested in the labeling thereof.” The introduction and delivery of a new drug into interstate commerce without an FDA-approved application violates FDCA Sections 301(d) and 505(a).

The warning letter further states that Magic Power Coffee was misbranded under the FDCA in three respects.

• The product was misbranded under Section 502(f)(1) because it failed to bear adequate directions for its intended use. Magic Power Coffee is a prescription drug because, like all other PDE 5 inhibitors the FDA has approved, its potentially harmful effects render it unsafe for use except under the supervision of a licensed practitioner. Because prescription drugs can only be used safely under the supervision of a licensed practitioner, it is impossible to write adequate directions for consumer use only.

• The undisclosed presence of hydroxythiohomosildenafil caused Magic Power Coffee to be misbranded under Sections 502(a) and 502(f)(2). A drug is misbranded under Section 502(a) if “its labeling is false or misleading in any particular” and under Section 502(f)(2) if its labeling lacks adequate warnings for the protection of users based on the risks associated with the consumption of the product. As noted, the product’s labeling did not warn consumers of the presence of hydroxythiohomosildenafil or of its potentially dangerous side effects.

• The introduction and delivery of the misbranded Magic Power Coffee into interstate commerce violated Section 301(a).

What is an FDA warning letter?

Initially, it is important to note that ongoing or promised corrective action, such as the manufacturer’s voluntary recall of Magic Power Coffee, will not necessarily preclude the issuance of a warning letter.

An FDA warning letter is an informal and advisory correspondence that notifies companies and individuals that their products, practices, processes or other activities violate the Food, Drug and Cosmetic Act. The FDA regulatory procedures manual describes the warning letter as the “agency’s principal means of achieving prompt voluntary compliance” with the FDCA.

Despite having no obligation to issue warning letters to violators of the law, the FDA does so with the expectation that these companies and individuals will promptly and voluntarily come into compliance once notified.

Warning letters are issued only for violations of regulatory significance, i.e., those violations that may ultimately lead to enforcement action if not promptly and adequately corrected. In this sense, they serve to ensure that the seriousness and scope of the observed violations are understood by top management so that the appropriate response can be made by the affected industry in order to correct violations and to prevent recurrence.

Are warning letters legally binding?

Despite the serious nature of the warning letter, they are not binding upon either the affected industry or the FDA. They serve the purpose of communicating the FDA’s position on a very specific matter, but they do not commit the agency to take any further enforcement action against the industry. As such, the FDA does not consider the warning letter to constitute final action upon which the agency can be sued.

Warning letters do, however, serve the additional purpose of being the FDA’s primary means of establishing prior notice. It is the agency’s policy to afford individuals and firms an opportunity to take voluntary corrective action prior to the initiation of an enforcement action.

However, if that voluntary action is not achieved to the FDA’s satisfaction, documentation of prior notice strengthens the agency’s position in future enforcement actions by establishing that responsible individuals continued violating the law despite having been previously warned.

What if you get a warning letter?

Generally, warning letters give the party in violation 15 days to respond, in writing, to inform the office issuing the letter of the specific steps that have been taken to correct the stated violations and to ensure that similar violations will not recur. As discussed, FDA warning letters are nonbinding, and compliance is purely voluntary. Further, the issuance thereof does not necessarily indicate that an enforcement action will follow.

However, the warning letter will serve as prior notice to the violator, which strengthens the agency’s position in any future enforcement action. Therefore, upon receipt of an FDA warning letter, the targeted individual or company should promptly respond within the allotted 15-day period.

The individual or company should first consult inside counsel and/or attorneys familiar with FDA compliance issues in order to establish a working plan to make an appropriate response.

The individual or company should contact the FDA if any aspect of the letter is unclear. It may also be appropriate in some circumstances to schedule a meeting with the agency.

A typical response should first acknowledge the company’s and or individual’s obligation to implement whatever measures are necessary to ensure that the products are in compliance with the law.

The response should then state what corrective action is being taken on the company’s behalf and what corrective action, if any, has already been taken. It should be as specific as possible in communicating to the FDA a relative timetable of when future corrective action will take place.

A thorough response letter should also refer to any changes that are being made in company practice/policy to keep abreast of changes in the law and to ensure future compliance with the FDCA.

A response letter could articulate any reasons that the company has for disagreeing with the FDA’s position on a particular matter, but again, the FDA uses the warning letter as a means of facilitating prompt and voluntary compliance with the FDCA and as its chief means of providing prior notice.

Failure to take corrective action despite being notified could subject affected individuals and companies to harsh FDA enforcement action, where the agency’s position would be strengthened by virtue of the prior notice that was established through the issuance of the warning letter.

Novartis Institute Tackles Unprofitable Drugs

Pharmaceutical companies get a bad rap for focusing their R&D efforts on diseases and ailments that impact people in wealthy countries. American men can choose between two hair loss drugs, and four for erectile dysfunction. Yet throughout the developing world, millions of people die from so-called “neglected diseases”—like malaria, leishmaniasis, lymphatic filariasis and Chagas disease—that kill them in horrifying ways.

Drug development is costly and unreliable. Only one in seven drugs make it to market, and drugs for neglected diseases can’t be sold at a price that would offset the cost of developing them—not to mention the six other drugs that fail.

The more I report on global public health, the more I see the need for creative approaches to drug development and distribution. I’ve reported on product development partnerships (PDPs)—such as DNDi and the Institute for OneWorld Health—which share the cost of drug development with pharmaceutical companies. And last week I spoke with Paul Herrling, the head of corporate research at Novartis, and chair of the drugmaker’s Institute for Tropical Diseases— a $200 million, ten year-old initiative that develops new drugs to treat dengue fever, tuberculosis and malaria. After discussing neglected diseases with NGOs and PDPs, I was curious to hear from the pharmaceutical sector.

Here’s my interview with Herrling, condensed and edited.

Why did Novartis decide to create the Institute for Tropical Diseases, and how does it work?

Ninety percent of drug development is generated by commercial pharmaceutical companies. I said “Why don’t we allocate a portion of our drug discovery budget to a number of diseases where we think we can make a big difference?” We did not pick HIV because there was already so much money being devoted to it. We selected tuberculosis and dengue fever.

Later, the Wellcome Trust [a health-focused foundation] came to us and said that they would like to partner to make a new anti-malarial drug. We had already been manufacturing the anti-malarial Coartem, and didn’t want to dilute our efforts with malaria and TB. They said that they are seeing resistance to artemisinin, the major compound in Coartem, and offered to finance our malaria efforts so that we wouldn’t have to dilute the resources that we devoted to dengue and TB. We hired some scientists and started a malaria project. It resulted in a compound that is now in clinical testing.

Our group includes 100 scientists and 30 students, and I have access to the resources of 6,000 Novartis scientists. We’ve since created a second institute for developing vaccines.

What do you say to people that $200 million is still a small percentage of Novartis’ $7.5 billion overall R&D budget?

We are a commercial organization and we are responsible to shareholders. We also believe that one of our missions is contributing new medicines to society, which is horrendously expensive. There is a limit to what we can do if we want to maintain profitability as a company. It cannot be a commercial organization’s responsibility to solve access to medicine problems where there is no market. We are trying to partner with PDPs [product development partnerships] and NGOs to work together to try to solve this problem. We would go out of business if we tried to address this problem on our own.

Tell me how your partnerships work. Who does what?

We have contracts with TB Alliance, MMV (Medicines for Malaria Venture) and DnDi (Drugs for Neglected Diseases Initiative). We have libraries where all of the compounds are in the public domain. They are available to all of our external partners, including universities and PDPs. In the public library we don’t own the IP.

We would give our partners an exclusive license for an indication that comes out of our work together. Once the utility has been shown, they can develop it with whomever they want— in India and elsewhere. Then they distribute it at the conditions they decide. They are the owners and can do whatever they want in that indication. We keep the rights for other indications.

For those compounds that are not in the public domain, we screen them ourselves. We select out the compounds that seem to be of interest. We publish and make those compounds available for the particular indication—like malaria, TB and dengue. If a lot of chemistry work has to be done later and what we put in development is not the original compound, then we take the IP in case the same molecule can be used in a commercial environment. For example, some compounds for dengue might also work for Hepatitis C, which is a blockbuster. We could give that IP to Novartis’ pharmaceutical department, which is a commercial organization.

We have committed to do all of the science and drug discovery and work to get to proof of concept, which is around Phase 2A. For dengue and TB, we will pay for FDA trials. For malaria, the Welcome Trust and MMV will pay.

In a perfect world, would the health ministries of endemic countries buy these drugs in bulk, thereby creating a real profit motive for drug companies?

If you define “demand” by medical need, then we’ve decided on the drugs with the biggest medical need. Coartem—a malaria drug— is one of Novartis’ biggest drugs in terms of the amount of the drug delivered. The problem is that in Africa, the drugs would never reach the patients if they were not delivered at the cost of goods so that patients would get it completely free. In some cases, medicines get hijacked somewhere along the distribution chain and get sold. Currently, because of the volume, we’ve been able to offer an adult dose of Coartem for 80 cents, and a pediatric dose at 50 cents, which is something that the system can absorb. We get no profit out of it.

There is no market where the market price of drugs would in any way compensate for the cost of developing them. For every one drug that makes it to market, seven or eight other drugs will fail, and they cost the same to manufacture. When you’re working in a rich country, your shareholders will bear this risk because if you have one drug that makes it, you recover the risk through sales.

Depending on how you calculate it, the direct cost of developing a drug equals everything that you actually spend on the drug that makes it, plus all of the costs of the drugs that failed. When you do that for each drug, you come up with a number of $1 billion per drug or more. It’s that order of magnitude. That is why pharmaceutical companies try to develop blockbuster drugs to offset the failures.

The FDA runs a Priority Review Voucher program, where a company that develops a drug for a neglected disease receives a voucher that it can use at another time, and which will allow it to expedite the testing process. You received a Priority Review Voucher for Coartem. What’s good about the vocuher program? What needs improvement?

We got the first and only Priority Review Voucher so far, for Coartem. The good part is that it’s a step in the right direction. The FDA offers an advantage to those people who actually take the risk to invest in an indication and are successful. That might be, to some extent, an incentive. It doesn’t guarantee that your review will be positive—just that the process will be faster.

The key downside is that it doesn’t take away the disincentive that any entity that works in this field is stuck with the risk of failure. If you fail to get your drug approved, you can’t apply for the voucher. The high rate of failure is a major disincentive for companies to invest in a drug where there is no normal commercial market: Only one out of seven drugs will make it.

Where we are now?

PDPs are a brilliant concept because involve collaboration with charities, NGOs, donors like the Wellcome Trust and the Gates Foundation, and the pharmaceutical industry. Over the last eight to ten years, PDPs have generated a portfolio of more than a 100 potential drugs, which is outstanding.

But today the PDPs are seeing a major problem looming on the horizon. Their funding allowed them to generate this pipeline, but it won’t sustain later stage trials. Neither the Gates Foundation nor the Wellcome Trust can allocate sufficient resources for the full development of these drugs. In some ways, PDPs are a victim of their own success.

Plan to curb prescription fraud questioned

Members of the Arizona State Board of Pharmacy are questioning the city of Peoria’s proposals to curb fraud in painkiller prescriptions.

City officials have proposed measures that include requiring pharmacists to take fingerprints before selling OxyContin and other addictive medicines.

The pharmacy board met last week with Peoria’s attorney and representatives of the pharmaceutical industry and the American Civil Liberties Union.

The board took no action, but called for more discussion.

ACLU attorney Dan Pochoda says Peoria would make pharmacies function as annexes to police stations to collect private information.

Peoria City Attorney Steve Kemp says fingerprinting was just one proposal.

He suggests the pharmacy board consider statewide mandates for pharmacists to require identification, report fraud cases and cooperate more with police.

Chinese National Faces Sentencing in Counterfeit Diet Drug Case

Shengyang Zhou, aka “Tom”, age 31, of Kunming, Yunnan, China, has entered a guilty plea to charges of trafficking in counterfeit versions of the pharmaceutical weight loss drug known as Alli.
Zhou entered the plea before U.S. District Judge Philip B. Brimmer. He is scheduled to be sentenced on May 6, 2011. A co-defendant, Qingming Hu, age 61 of Plano, Texas, pled guilty to distributing Sibutramine, a Schedule IV non-narcotic controlled substance. Hu is scheduled to be sentenced on April 28, 2011.

According to court documents, over the course of December 2008 through March of 2009, the U.S.

Food and Drug Administration (FDA) issued a series of alerts on its website concerning tainted weight loss pills and counterfeit drugs. Initial alerts focused on “Superslim,” “2 Day Diet,” and Meitzitang, among other purported weight loss products believed to having been imported from China and being marketed as dietary supplements or nutritional products.

The FDA warned in these initial alerts that the items posed a very serious health risk to consumers, because, based on analysis, they were found to be drugs that contained undeclared active pharmaceutical ingredients, including Sibutramine (a non-narcotic controlled substance).

The ingredient Sibutramine can cause high blood pressure, seizures, tachycardia, palpitations, heart attack or stroke. In later alerts, FDA warned the public about counterfeit versions of the brand name drug Alli, a popular over-the-counter weight loss drug manufactured by GlaxoSmithKlein.

over agents told Zhou that they had access to a private customs broker who would be willing to import the counterfeit Alli into the United States through air cargo shipments that would be mis-described.

As the investigation continued undercover agents and Zhou agreed to meet in Hawaii to discuss increasing the order for counterfeit Alli. At that meeting Zhou provided proof that he was capable of producing large quantities of Alli, and that he had cured certain imperfections. At the end of the meeting agents handed Zhou cash to complete the Alli order transaction. At that point, Zhou was arrested.

A number of consumers reported feeling an assortment of adverse physical effects from taking the counterfeit Alli that they had purchased from the defendant’s web page or through a re-distributor. One consumer, an emergency room doctor, suffered a mild stroke after ingesting the counterfeit Alli.

Zhou faces a maximum penalty of ten years imprisonment, a $250,000 fine, and restitution for the counterfeit goods offense to which he has pled guilty.

Hu faces maximum penalty of five years imprisonment and a $250,000 fine for the distribution offense to which she has pled guilty.

College of Pharmacy Named Top Partner by CVS Caremark

CVS Caremark, the largest pharmacy health care provider in the U.S., named WesternU’s College of Pharmacy as its 2010 Partner of the Year.

CVS officials surprised College of Pharmacy administration and faculty with the award and a $50,000 check at the college’s dedication ceremony for the CVS/Pharmacy Student Services Center on Thursday, Jan. 27, 2011.

“This is an amazing honor,” said College of Pharmacy Dean Daniel Robinson, PharmD. “We’re grateful to work so closely with CVS.”

CVS is a major employer of College of Pharmacy graduates, and the college has enjoyed a tremendous partnership with the company, Robinson said.

CVS Caremark recognizes one school partner each year that shares the same vision as CVS, said Papatya Tankut, RPh, CVS Caremark Vice President of Pharmacy Professional Services. Both organizations have a passion for community pharmacy, and the relationship is mutually beneficial. CVS hired 49 College of Pharmacy graduates in 2010 and has already recruited 22 students in 2011, she said.

CVS Caremark’s vision is improving the quality of human life through patient care and delivery of service. “The quality of students WesternU produces allows us to meet these standards,” Tankut said.

WesternU President Philip Pumerantz, PhD, thanked CVS officials for working with the university to produce highly skilled graduates who care for their patients.

“As a patient, it’s important to me when I deal with my health professional that I can trust them. That’s all based on the education provided here,” he said. “Thank you for your partnership, support and generosity.”

The announcement reinforced what was already a celebration of the partnership between CVS and the College of Pharmacy. CVS Caremark gave a $75,000 gift in April 2010 to create the new CVS/Pharmacy Student Services Center. Students will utilize the center to plan community outreach projects and other club activities.

“We need to provide infrastructure and support to allow students to do the amazing things we know they are capable of,” Robinson said.

About Western University of Health Sciences

Natco Pharma

Natco Pharma Ltd has informed BSE that:
” K & C Pharmacy, a general partnership firm based out of New Jersey, USA (of which the Hyderabad based NATCO Pharma Limited is a 75% partner) has sold its right, title and interest in a retail pharmacy outlet known as Nicks’ Drugs, based in Newark, New Jersey.

Nicks’ Drugs revenues were predominantly guided by the Medicaid reimbursements from the State of New Jersey. Of-late, however, owing to budgetary restrictions, there have been significant reductions in the reimbursements. However, this sale would not have any significant effect on the revenues and profitability of NATCO Pharma Limited.

With this sale, NATCO Pharma Limited now owns and operates only one retail pharma store -through its wholly owned subsidiary – NATCO Pharma Inc., – known as SaveMart Pharmacy, based in Lancaster, Pennsylvania, USA. This store is doing well and is not dependent on Medicaid reimbursements.

Endo Pharmaceuticals Announces Receipt of Paragraph IV Certification

CHADDS FORD, Pa., Jan. 31, 2011 /PRNewswire/ — Endo Pharmaceuticals (Nasdaq: ENDP) announced today that its partners, Teikoku Seiyaku Co., Ltd. and Teikoku Pharma USA, Inc., have received a Paragraph IV Certification Notice from Mylan Technologies Inc. advising of the filing of an Abbreviated New Drug Application (ANDA) for a generic version of LIDODERM® (lidocaine topical patch 5%).

The company is currently reviewing the details of this notice from Mylan. Endo intends to vigorously defend LIDODERM’s intellectual property rights and will pursue all available legal and regulatory pathways in defense of LIDODERM.

The Paragraph IV certification notice refers to U.S. Patent Nos. 5,741,510 and 5,827,529, which cover the formulation of LIDODERM, a topical patch to relieve the pain of postherpetic neuralgia launched in 1999. These patents are listed in the U.S. Food and Drug Administration’s (FDA) Orange Book and expire in March 2014 and October 2015, respectively.

Citizen Petition

With respect to Endo’s regulatory approach, the company submitted a Citizen Petition in 2006 in reaction to a proposal by FDA’s Office of Generic Drugs that would diverge from applicable regulations and standards of practice regarding bioequivalence. The company is requesting that the agency reconsider its departure from its longstanding general rule of requiring clinical endpoint bioequivalence studies for locally acting topical generic drug products, including those that reference LIDODERM. To ensure the safe and effective equivalence of any generic version to LIDODERM, which acts locally in the skin, Endo believes that FDA must return to its established standard of clinical endpoint bioequivalence studies.

About Endo

Endo Pharmaceuticals is a U.S.-based, specialty healthcare solutions company, focused on high-value branded products and specialty generics. Endo is redefining its position in the healthcare marketplace by anticipating and embracing the evolution of health decisions based on the need for high-quality and cost-effective care. We aim to be the premier partner to healthcare professionals and payment providers, delivering an innovative suite of complementary diagnostics, drugs, devices and clinical data to meet the needs of patients in areas such as pain, urology, oncology and endocrinology

Forward-Looking Statements

This press release contains forward-looking statements regarding, among other things, Endo’s financial position, results of operations, market position, product development and business strategy, as well as estimates of Endo’s future total revenues, future expenses, future net income and future earnings per share. Statements including words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plan,” “will,” “may” “intend,” “guidance” or similar expressions are forward-looking statements. Because these statements reflect our current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors could affect the business combination of the companies, future financial results and could cause actual results to differ materially from those expressed in forward-looking statements contained in this press release. These factors include, but are not limited to: Endo’s ability to successfully develop, commercialize and market new products; timing and results of pre-clinical or clinical trials on new products; Endo’s ability to obtain regulatory approval of any of its pipeline products; competition for the business of Endo’s branded and generic products, and in connection with its acquisition of rights to intellectual property assets; market acceptance of our future products; government regulation of the pharmaceutical industry; Endo’s dependence on a small number of products; Endo’s dependence on outside manufacturers for the manufacture of a majority of its products; Endo’s dependence on third parties to supply raw materials and to provide services for certain core aspects of its business; new regulatory action or lawsuits relating to Endo’s use of narcotics in many of its core products; Endo’s exposure to product liability claims, market withdrawals and product recalls and the possibility that Endo may not be able to adequately insure itself; the successful efforts of manufacturers of branded pharmaceuticals to use litigation and legislative and regulatory efforts to limit the use of generics and certain other products; Endo’s ability to successfully implement its acquisition and in-licensing strategy; regulatory or other limits on the availability of controlled substances that constitute the active ingredients of some of its products and products in development; the availability of third-party reimbursement for our products; the outcome of any pending or future litigation or claims by third parties or the government, and the performance of indemnitors with respect to claims for which we have been indemnified; our dependence on sales to a limited number of large pharmacy chains and wholesale drug distributors for a large portion of its total revenues; a determination by a regulatory agency that Endo is engaging or has engaged in inappropriate sales or marketing activities, including promoting the “off-label” use of its products, the risk that demand for and acceptance of our products or services may be reduced; the risk of changes in governmental regulations; the impact of economic conditions; the impact of competition and pricing and other risks and uncertainties, including those detailed from time to time in Endo’s periodic reports filed with the Securities and Exchange Commission, including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “RISK FACTORS” in our periodic and current reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

Watson Confirms Pataday™ Patent Challenge

Watson Pharmaceuticals, Inc. (NYSE: WPI) today confirmed that its subsidiary, Watson Laboratories, Inc., filed an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration (FDA) seeking approval to market Olopatadine Hydrochloride Ophthalmic Solution USP, 0.2%. Watson’s Olopatadine Hydrochloride Ophthalmic Solution USP, 0.2% is a generic version of Alcon, Inc.’s Pataday™ (olopatadine hydrochloride ophthalmic solution) 0.2%, which is indicated for the treatment of ocular itching associated with allergic conjunctivitis.

Alcon Research, Ltd., Alcon Pharmaceuticals, Ltd., and Kyowa Hakko Kirin Co., Ltd. filed suit against Watson on June 9, 2011 in the United States District Court for the Southern District of Indiana seeking to prevent Watson from commercializing its product prior to the expiration of U.S. Patent Nos. 5,641,805, 6,995,186, and 7,402,609. Alcon’s lawsuit was filed under the provisions of the Hatch-Waxman Act, resulting in a stay of final FDA approval of Watson’s ANDA until October 29, 2013, or until final resolution of the matter before the court, whichever occurs sooner, subject to any other exclusivities.

For the twelve months ending April 30, 2011, Pataday had total U.S. sales of approximately $224 million according to IMS Health data.

About Watson Pharmaceuticals, Inc.

Watson Pharmaceuticals, Inc. is an integrated global specialty pharmaceutical company. The Company is engaged in the development, manufacturing, marketing and distribution of generic pharmaceuticals and specialized branded pharmaceutical products focused on Urology and Women’s Health. Watson has operations in many of the world’s established and growing international markets.

Forward-Looking Statement

Statements contained in this press release that refer to non-historical facts are forward-looking statements that reflect Watson’s current perspective of existing information as of the date of this release. It is important to note that Watson’s goals and expectations are not predictions of actual performance. Actual results may differ materially from Watson’s current expectations depending upon a number of factors, risks and uncertainties affecting Watson’s business. These factors include, among others, the difficulty of predicting the timing or outcome of product development efforts, including FDA and other regulatory agency approvals and actions, if any; the difficulty of predicting the timing and outcome of the pending patent litigation; the impact of competitive products and pricing; the timing and success of product launches; difficulties or delays in manufacturing; the availability and pricing of third party sourced products and materials; successful compliance with FDA and other governmental regulations applicable to Watson and its third party manufacturers’ facilities, products and/or businesses; changes in the laws and regulations, including Medicare and Medicaid, affecting among other things, pricing and reimbursement of pharmaceutical products; and such other risks and uncertainties detailed in Watson’s periodic public filings with the Securities and Exchange Commission, including but not limited to Watson’s quarterly report on form 10-Q for the quarter ended March 31, 2011 and Watson’s annual report on Form 10-K for the year ended December 31, 2010. Except as expressly required by law, Watson disclaims any intent or obligation to update these forward-looking statements.

Pfizer goes to court to protect exclusive rights to sell Viagra

Patent protection and product pipelines are top priorities for every pharmaceutical manufacturer, which is why Pfizer Inc. and Teva Pharmaceuticals International Ltd. will be in federal court in Norfolk, Va., starting Wednesday as Pfizer fights to keep exclusive rights to Viagra through 2019.

Pfizer sells about $1 billion worth of the little blue pills per year in the United States to help men with erectile dysfunction, amounting to about 2 1/2 percent of the company’s sales.

Along with other pharmaceutical companies, Pfizer has been fretting because some top-selling drugs are nearing the dates at which generic-pharmaceutical firms can produce and sell similar products for less money. The pipelines are connected because pharmaceutical leaders worry that few blockbusters are coming along to replace the older moneymakers.

Pfizer, based in New York, has operations in the Philadelphia suburbs. Israel-based Teva, the world’s leader in generic-pharmaceutical sales, has its North American headquarters in North Wales.

In this case, Pfizer hopes U.S. District Judge Rebecca Beach Smith will enforce the second of two patents it holds on sildenafil, which became the trade-named product Viagra. The first patent for sildenafil is not in dispute.

“We believe our patent is valid and infringed, and are enforcing our rights under the patent,” Pfizer said in a statement. “Furthermore, many of Teva’s arguments had been previously considered and rejected by the U.S. Patent and Trademark Office, both during a six-year examination by the USPTO of Pfizer’s patent and again during a seven-year reexamination by the USPTO.”

A Teva USA spokeswoman said via e-mail that the company had no comment.

Pfizer sued in the Eastern District of Virginia because the district has a reputation for speedy decisions and patent cases can take months to resolve. This one might not be settled until next year, and Teva hopes that Pfizer’s exclusive rights will expire March 27, 2012.

In the 1990s, Pfizer won its original patent for sildenafil as a compound to treat high blood pressure and other heart problems. But during clinical trials, a high percentage of men taking the medication immediately had erections.

Rarely is such serendipity so lucrative. Pfizer has fought in court for years to protect the market born of that research. A suit against Eli Lilly was eventually settled; Lilly sells Cialis for treatment of the same condition. In March 2010, Pfizer settled an eight-year suit with GlaxoSmithKline and Bayer, which had combined to sell Levitra.

Erectile dysfunction, also known as ED, was not invented with the now-ubiquitous TV ads – there was just no easy way to treat the problem. But Viagra’s launch changed that, and Pfizer was eventually granted a second patent in 2002 that is due to expire in 2019.

Teva is arguing that the second patent is invalid, and that anyone schooled in drug research would have figured out that the compound would help with erectile dysfunction. Pfizer argues that if any such people were so smart, why didn’t they invent it, file for a patent, and make billions before Pfizer did?

“Viagra has received more media attention and entered the pop culture to an extent greater than any other drug,” Pfizer attorney Daniel P. DiNapoli said during a recent court hearing, the transcript shows. “Part of the reason for that, no doubt, is the subject matter to which Viagra relates – sex. But there were ED treatments before Viagra, and none of those received anywhere near the attention that Viagra has received.

“And what distances Viagra from these other ED treatments was that Viagra was an effective oral treatment for erectile dysfunction, an ED pill. Pfizer’s success with Viagra was the end result of a long research and development project.”

Pacira Pharmaceuticals, Inc. Announces FDA Extension of EXPAREL™ PDUFA Target Date by Three Months

Pacira Pharmaceuticals, Inc., (Nasdaq: PCRX), an emerging specialty pharmaceutical company, today announced that the U.S. Food and Drug Administration (FDA) has extended the Prescription Drug User Fee Act (PDUFA) goal date for its review of the New Drug Application (NDA) for EXPAREL™ (Bupivacaine Extended-Release Liposome Injection) by three months. The new PDUFA goal date is October 28, 2011.

The FDA requested additional information from Pacira, which the company has submitted. The FDA determined that this information constituted a major amendment. The agency has the option to extend the PDUFA goal date when a sponsor submits a major amendment to an NDA within three months of the PDUFA goal date to provide the FDA time to complete the review.

About Pacira

Pacira Pharmaceuticals, Inc. is an emerging specialty pharmaceutical company focused on the development, manufacture and commercialization of novel pharmaceutical products, based on its proprietary DepoFoam drug delivery technology, for use in hospitals and ambulatory surgery centers. In December 2010, Pacira announced that its New Drug Application (NDA) for EXPAREL, the company’s most advanced investigational product candidate, had been accepted for filing by the U.S. Food and Drug Administration (FDA). The FDA has assigned a Prescription Drug User Fee Act (PDUFA) goal date of October 28, 2011 for the review of the EXPAREL NDA. EXPAREL is a bupivacaine-based product and has completed extensive Phase 3 clinical development for postoperative analgesia by infiltration. EXPAREL consists of bupivacaine encapsulated in DepoFoam, which is designed to address the limitations of widely used medications by enhancing their dosing and/or administration profile.

About EXPAREL™

EXPAREL is Pacira’s proprietary drug candidate consisting of bupivacaine encapsulated in DepoFoam®, both of which are currently used separately in FDA-approved products. Bupivacaine is a well-characterized anesthetic/analgesic that has an established safety profile with more than 20 years of use in the United States. Market data indicate that there is an unmet medical need for a longer-acting anesthetic/analgesic for postsurgical pain management. Several Phase 2 and Phase 3 clinical trials have been completed for EXPAREL and suggest statistically significant reduction of pain in soft tissue and orthopedic surgery in different surgical models. Clinical data from Phase 3 trial 316 suggest that EXPAREL provides analgesia for up to 72 hours post-surgery, the primary endpoint for the trial. The safety of EXPAREL was evaluated in 10 randomized, double-blind, local administration into the surgical wound clinical studies involving 823 patients; the most common adverse events following EXPAREL administration were nausea, constipation, and vomiting.

Forward Looking Statements

Any statements in this press release about our future expectations, plans and prospects, including statements about EXPAREL’s potential, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to: the timing of, and our ability to obtain regulatory approval of EXPAREL; the timing of our anticipated commercial launch of EXPAREL; the rate and degree of market acceptance of EXPAREL; the size and growth of the potential markets for EXPAREL and our ability to serve those markets; our commercialization and marketing capabilities; and other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2010, and in other filings that we periodically make with the SEC. In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

On 13 Local Patent Applications In Pharmaceuticals Last Year

Only 13 local patent applications in pharmaceuticals was received last year as compared to 403 from foreign countries.

Domestic Trade, Cooperatives and Consumerism Minister, Datuk Seri Ismail Sabri Yaakob said the number reflected that the level of awareness on copyright among the people was still low.

He said the intellectual property protection system in Malaysia was in line with international practises and fulfilled the requirements of the TRIPs (trade-related aspects of intellectual property rights) Agreement.

A total of 6,380 patent applications were received last year, an increase of 11 per cent from 5,676 applications in 2009, he said in his speech at the opening of a seminar on “1 Malaysia Medicines: The Way Forward In Intellectual Property” here.

The text of the speech was read by his deputy, Datuk Rohani Abdul Karim.

Ismail Sabri said those involved in pharmaceuticals played an important role in research.

“The outcome of the research should be registered as intellectual property,” he added.

He said there were had more than 1,300 health-based products from natural resources registered with the Health Ministry.

The seminar, organised by the Malaysian Pharmaceutical Association, with the cooperation of the Intellectual Property Corporation of Malaysia (MyIPO), is attended by 120 participants.

Cancer Drug Developers Considering ImmunoGen’s Tap Technology

Something to think about: The fact that using ImmunoGen’s (IMGN) TAP technology makes targeted cancer drugs beat their own efficacy. This reality seems to be increasingly considered by cancer drug developers. Using ImmunoGen’s technology enables approved, or investigational targeted cancer drugs developed by pharmaceutical companies to gain extra-efficacy as first line treatments, in addition to overcoming cancer resistance in case of recurrences. The oncology drug developers would love to see their same products bring better safety and efficacy, cover more patients and succeed if recurrences occur.

Yesterday, after the end of the market session, ImmunoGen announced it has earned a $2 million milestone payment after Bayer HealthCare Pharmaceuticals, submitted an investigational new drug application for its cancer drug BAY 94-9343 in development using Immunogen’s technology. The drug is a promising therapeutic for mesothelin-expressing cancers. Daniel Junius, ImmunoGen President and CEO said, “In addition to BAY 94-9343, we expect five other TAP compounds to advance into clinical testing in the next twelve months – two developed and wholly owned by ImmunoGen and three through our collaborations with other companies. Overall, we anticipate that there will be twelve TAP compounds in the clinic by this time next year.”

Mesothelin is highly expressed on mesotheliomas and on many ovarian and pancreatic carcinomas. BAY 94-9343 consists of a Bayer HealthCare antibody that targets mesothelin with ImmunoGen’s DM4 cancer-cell killing agent attached, using one of ImmunoGen’s engineered linkers. In preclinical testing, BAY 94-9343 demonstrated potent, targeted anticancer activity against mesothelin-expressing tumors.

ImmunoGen has granted Bayer HealthCare exclusive rights to use ImmunoGen’s maytansinoid TAP technology to develop anticancer treatments that target mesothelin. ImmunoGen is entitled to receive milestone payments potentially totaling up to $170.5 million for each resulting product, plus royalties on sales.

This is not all. More agreements are expected to be signed with other firms following the validation of ImmunoGen’s technological capability. The validation emanated from previously announced results, especially, with T-DM1, with Roche’s drug Herceptin incorporated into the TAP drug for HER2 breast cancer. The technology is being validated in preclinical experimentation as with Bayers’ drug BAY 94-9343 and five other TAP compounds that are advancing into clinical testing.

These new products add to ImmunoGen’s pipeline products that are already in mid- and late- clinical trials. Two of the newly comer drugs will be added to the products that are wholly owned by ImmunoGen.

APP Pharma to Plug $38M into Expanding NY Manufacturing Site

APP Pharmaceuticals plans on investing $38 million to exapnd a manufacturing facility in Grand Island, NY, to increase its production of injectable genetic drugs. It will thus add 90 jobs to its existing workforce of 580 at the plant.

APP, a wholly owned subsidiary of Fresenius Kabi Pharmaceuticals Holding, will expand its production site by 13,000 square feet and add six new production lines for injectable products. The expansion is anticipated to begin this month and take two years to complete.

At Grand Island, APP manufactures a variety of injectable pharmaceutical products for the North America market. The products encompass four therapeutic areas: anti-infectives, critical care, analgesia/anesthesia, and oncology.

“Through the expansion, the site will significantly contribute to the continuous local supply of high-quality injectable generics for the U.S. and Canada,” states Michael Schönhofen, president, science, production, and technology for Fresenius Kabi.

Based on its promise of the new and retained jobs, APP has won nearly $1.2 million in tax credits over five years through New York state’s Excelsior Jobs Program; 2,000 kW of lower-cost power through the state Power Authority; and local property tax, sales tax, and mortgage tax abatements through the Erie County Economic Development Corp.

Listed pharmaceutical firms welcome BEE rules for state tenders

Listed drug firms will soon benefit if they are empowered when bidding for state tenders.

This is because health-care procurement has been aligned to all the elements of broad-based black economic empowerment (BEE) following the publication of regulations of the Preferential Procurement Policy Framework Act by the National Treasury last week.

Previously, these companies’ empowerment credentials did not matter because procurement was linked only to equity, which is one element of the BEE scorecard.

While these public firms have empowerment shareholders, the government did not consider these as it was felt that shareholding changed hands regularly on the stock exchange.

But the regulations that are expected to come into effect by December say the points scored by a tenderer in respect of BEE contribution must be added to the points scored for price.

Bidding firms will have to submit their broad-based BEE status level verification certificate or a certified copy thereof, substantiating their rating, except for those that are exempted. In the event that two or more tenders have scored equal total points, the successful tender must be the one scoring the highest number of preference points.

Stavros Nicolaou, Aspen Pharmacare’s senior executive for strategic trade, said it was a major policy shift that the industry had been waiting for.

“Previously they looked at equity ownership and listed companies always scored zero. It didn’t matter where you were on a BEE rating. You could have been a level two, which is highly empowered, going up against a level five; your empowerment credential did not help,” Nicolaou said. “The more empowered you are, the more the benefit on your pricing.”

Recently, Adcock Ingram had a gripe with the Treasury after the results of the latest antiretroviral tender were released because it felt that its BEE status had not been considered properly. The firm concluded a R1.3 billion empowerment equity transaction in which it sold 13 percent of the company to black investors last year.

Jonathan Louw, the chief executive at Adcock, has previously said the group’s BEE partners were locked in for 10 years, meaning that Adcock’s shareholding would not change for at least a decade even though it was listed.

Both companies are level four broad-based BEE contributors. Yesterday, Adcock said it welcomed the regulations.

“This is a significant development for us and a good outcome for our tender business,” Adcock said in a statement.

Nicolaou, who is also the chairman of Pharmaceuticals Made in South Africa, said the company was also excited by the regulations because there were now going to be products set aside for local producers.

“They would take into account the imported element. The devil is in the detail because they have to work out which products should be designated. It is important to work out if you have capacity and capability, for example, it would be pointless to designate certain oncology products because you couldn’t make them in this country.

“The products that must be set aside are the ones that are strategic to the country and high in volumes. Everyone focuses on HIV but there are a lot of other epidemics in this country, the non-communicable diseases, diabetes, blood pressure. They must also have export potential, especially to sub-Saharan Africa,” Nicolaou said.

Cipla Medpro South Africa said it was still analysing the regulations so it could not comment yet. – Business Report

New Hepatitis C Drug Wins FDA Approval

Vertex Pharmaceutical’s hepatitis C drug, telprevir, received Food and Drug Administration (FDA) approval Monday not long after the agency cleared a competing medicine by Merck.

Telprevir, which will be marketed under the brand name Incivek, is approved for use with interferon therapy, the FDA said.

The drug was approved on clinical data that showed about 79 percent of patients receiving Incivek with older drugs had no signs of the virus 24 weeks after stopping treatment.
Merck recently enlisted the aid of rival Roche to promote its drug, Victrelis.

Clinical data has suggested that Incivek has superior efficacy to Victrelis and may capture more of what is expected to be a multi-billion-dollar market.

The FDA approved Victrelis May 13, based on clinical data showing that about two-thirds of patients receiving Victrelis in combination with the older drugs had no signs of the virus 24 weeks after stopping treatment.

Transcept Pharmaceuticals Inc. Stock Upgraded (TSPT)

Transcept Pharmaceuticals (Nasdaq:TSPT) has been upgraded by TheStreet Ratings from sell to hold. The company’s strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we find that the growth in the company’s net income has been quite unimpressive.

Highlights from the ratings report include:
The change in net income from the same quarter one year ago has exceeded that of the Biotechnology industry average, but is less than that of the S&P 500. The net income has decreased by 5.3% when compared to the same quarter one year ago, dropping from -$1.84 million to -$1.94 million.
Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Biotechnology industry and the overall market, TRANSCEPT PHARMACEUTICALS’s return on equity significantly trails that of both the industry average and the S&P 500.
Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
Despite the stagnant revenue growth, the company outperformed against the industry average of 6.9%. Since the same quarter one year prior, revenues have remained constant. Both the company’s revenue growth and earnings per share have remained constant.
TRANSCEPT PHARMACEUTICALS reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRANSCEPT PHARMACEUTICALS continued to lose money by earning -$0.70 versus -$1.66 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus -$0.70).

Transcept Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of proprietary products that address therapeutic needs in neuroscience. Transcept has a market cap of $134.7 million and is part of the health care sector and drugs industry. Shares are up 38.9% year to date as of the close of trading on Friday.

Par Pharma to Buy India-Based Generic Drug Maker

Par Pharmaceutical Cos. will acquire India-based generic drug maker Edict Pharmaceuticals for up to $37.6 million.

The company expects the deal to close by the end of the year and add to earnings in 2013.

Par, itself a maker of generic drugs, has also been moving into the branded pharmaceutical market by developing updated versions of off-patent drugs.

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Privately held Edict develops and manufactures solid oral dosage generic drugs with a focus on niche first-to-file, first-to-market formulations. The company has eight abbreviated new drug applications awaiting approval from the U.S. Food and Drug Administration, one application filed in the name of a development partner and 14 products in development.

Par President Paul V. Campanelli said the drug maker has a long-standing relationship with Edict Chief Executive Muthusamy Shanmugan after the two companies collaborated on numerous current Par products.

Labor Will Be Less of a Drag on Drugstores

Pharmacist-wage inflation has been a meaningful earnings headwind for drugstores over the past decade, but structural changes in the labor market should provide significant relief going forward.

Our proprietary analysis suggests that pharmacy-wage growth should sharply decelerate and could flatline in the near future, allowing the drugstores to better leverage selling, general and administrative costs (SG&A) and accelerate earnings growth. We believe this benefit is largely underappreciated by the market and represents another reason to be positive on the group. We maintain our Outperform rating on Walgreen (ticker: WAG) and CVS Caremark (CVS).

Pharmacy-labor inflation has been a large earnings drag for drugstores. We estimate that mid-single-digit inflation in pharmacist wages over the last decade has stolen 5% to 7% of earnings growth annually from the drugstore industry, including a 2010 earnings-per-share hit of 13 cents (6%) at Walgreen, seven cents (3%) at CVS, and 10% to Rite Aid’s (RAD) earnings before interest, taxes, depreciation and amortization (Ebitda). Investors may be surprised to learn that pharmacy labor represents the largest operating expense for a drugstore at 35% to 40% of SG&A. Rapid inflation in wages has been driven by a shortage of qualified pharmacists, a period of aggressive pharmacy-counter expansion, and historically strong script growth.

The supply/demand dynamic of the pharmacist labor market is undergoing a major change, in our view, as the number of graduates is poised to sharply accelerate as pharmacy-counter growth slows and companies roll out productivity initiatives. We believe pharmacy labor-cost inflation will decelerate and could even flatline in the near future through various cost-containment initiatives, which should result in a deceleration in overall expense growth and a higher incremental margin on sales growth.

We believe the drugstore industry currently represents one of the most compelling sectors in the consumer landscape. It has a unique industry catalyst in the generic wave, positive leverage to product-cost inflation due to the channel’s price inelasticity, insulation from rising gas prices, and now an improving labor-cost outlook. Company-specific turnarounds at Walgreen and CVS provide additional upside opportunity.

We are raising target prices for Walgreen and CVS. We believe both stocks still have 15%-plus upside despite recent appreciation. We raised our target price to $51 from $46 on Walgreen and to $44 from $42 on CVS.

Research-Based Pharmaceutical Industry Presentation in Geneva

As one of the 189 nongovernmental organizations (NGOs) in official relations with the World Health Organization (WHO), and in line with WHO principles governing relations with NGOs, representatives of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) will be present to listen to the proceedings of the 64th World Health Assembly (WHA).

The IFPMA will follow with particular interest decisions made by member governments on global health challenges directly involving the research-based pharmaceutical industry, such as pandemic influenza preparedness and fake medical products. The IFPMA will be taking particular note of the outcome of the World Health Assembly’s discussions on the health related Millennium Development Goals (MDGs) and non communicable diseases (NCDs); as both demonstrate the need for global leadership and partnerships. The federation will also be interested in discussions on specific disease areas such as HIV/AIDS, malaria, and cholera.

The World Health Assembly agenda includes a review of the report of the WHO Open-Ended Working Group of Member States on Pandemic Influenza Preparedness (OEWG/PIP) which scopes out a global system to prepare for future pandemics. Recognizing a shared responsibility to help secure the world against future pandemic influenza outbreaks, the research-based pharmaceutical industry has engaged constructively in the OEWG/PIP process and stands by the collaborative commitments it has made to address this challenge. The Assembly will also consider the report by an external panel to review the “Implementation of the International Health Regulations (2005)” and the response to the 2009 H1N1 pandemic. The findings of the report and its recommendations together with the OEWG report represent an important basis to prepare and fight future pandemics and underscore the essential need for close collaboration between many different stakeholders.

The issue of substandard/spurious/falsely-labelled/falsified/counterfeit medical products is on the WHA agenda. The WHO has a crucial leadership role to play in helping to ensure that medicines everywhere are of high quality, safe and efficacious, and that they are also what they purport to be. The IFPMA supports the global effort to secure high quality medicines, and also hopes there will soon be consensus around priorities on fake medical products. The IFPMA’s “Ten Principles on Counterfeit Medicines” are based on the belief that the production and distribution of deliberately falsified medicines are an important threat to patients’ health and a serious global crime which calls for a global course of action to be taken.

The IFPMA believes this 64th WHA is an important milestone in shaping the global approach that seeks to address the millions of deaths that are caused every year by non communicable diseases — 14 million of which are premature and could be averted or delayed. Given the sheer enormity of the challenge, in particular in low income and emerging countries, the approach needs to involve not only governments but also the private sector, nongovernmental organizations and each of us as individuals. Governments can have a direct impact by introducing or reinforcing fiscal and legislative measures to discourage, for example, the use of tobacco, by imposing restrictions and bans. At the same time, awareness-raising and communications campaigns are a key factor for prevention.

The Assembly will also review the health-related Millennium Development Goals (MDGs). In this area, IFPMA member companies have a strong track record with over 200 long-term partnership programs through which the research-based pharmaceutical industry works to improve health in low and middle income countries and make a tangible contribution to the health related MDGs, tackling HIV/AIDS and other communicable diseases such as cholera, and malaria. At the half way point of the MDGs, in 2007, IFPMA members had made available nearly USD 10 billion dollars’ worth of health assistance for access and capacity building in low and middle income countries, and over 1.3 billion public health interventions. The scale of their efforts is set to continue to achieve the MDGs in 2015. In addition, the IFPMA’s member companies have been supporting the WHO in the fight against neglected tropical diseases through major research and development investments and donations for many years, but more recently there has been a stepping up of the industry’s efforts in response to WHO’s call for help. In 2010 there were five new major donation announcements, and the number of tropical disease-related research and development projects is higher than ever before.

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Top Medical Services Picks by Fund Gurus Concentrated in the Sector

What do the top hedge fund and mutual fund gurus like in the medical services industry? This article, the 30th in a series, identifies through a research of the latest available institutional 13-F filings the gurus that are most invested in the medical services industry and the specific stocks within that industry that they prefer to hold in their portfolios. Please note that I have also included in this group managed care providers such as HMOs, pharmacy benefit management companies, clinical research outsourcing companies and operators of medical services facilities such as hospitals as well as home health care providers.

Also, please note that this article will be among the last in this series, as the latest March 2011 quarter 13-F Institutional filings are now beginning to come out. About 40% were out as of this weekendand most should be filed by the end of this week. As such, once 13-F filings are complete for all guru funds, in the next series starting the end of this week to the beginning of next week, I will bring to you the “Top New and Added Picks” of guru funds by industry/sector detailing this time not the top holdings, but more importantly what new positions they took and what existing positions they added to in the latest March 2011 quarter. Please check my article page for previous articles in this series.

A guru is defined as someone who is regarded as having great knowledge, wisdom and authority in a certain area. When it comes to hedge funds, there are a number of ways to anoint leading managers as gurus including long-term performance, low portfolio volatility and an elite reputation in the investment community.

Many of us are familiar with leading investors and hedge fund managers such as Warren Buffet, George Soros, Carl Icahn and Julian Robertson, but the hedge fund community alone includes over 9,000 funds; add in mutual funds, ETFs and other investment entities and the number is likely to be at least two to three times that number. While there is no official list of gurus, less than one percent or between 100 to 200 fund managers are commonly believed by the larger investment community to have earned the distinction of being called gurus.

The study of the investing habits of gurus can be informative as these are very savvy, well-respected investors with high personal net worth deploying large sums of capital from their funds on a regular basis. They have a long-term track record of successand while one can easily just ride their coattails, the savvy investor may want to use these lists as a starting point to conduct their own due diligence.

The total capitalization of the U.S. equity markets is somewhere in the $15 trillion rangeand the total market capitalization of medical services companies is $310 billion or 2.1% of the overall market. The table lists the top seven investment gurus whose funds have invested at least 6.3% or three times the average. The following is a list of the top medical services company picks of guru funds over-concentrated in that sector:
Managed care providers UnitedHealth Group Inc. (UNH), a provider of managed healthcare services through HMO and government contracts to over 75 million members in the U.S.; Wellpoint Inc. (WLP), a provider of managed healthcare services through PPO, HMO and POS, indemnity and other hybrid plans to 33.3 million members; Cigna Corp. (CI), a provider of managed healthcare services through HMO, PPO, POS and indemnity plans to 12.47 million member; Humana Inc. (HUM), a provider of managed healthcare services through HMO, PPO and government contracts to about 10.2 million members in the U.S.; and Health Net Inc. (HNT), a provider of managed health care services through HMO, PPO, POS and indemnity plans to 6.0 million members across the Country.
Pharmacy benefit management providers Medco Health Solutions (MHS), a provider of pharmacy benefit management services to employers, health plans, unions, government agencies and individuals; and Omnicare Inc. (OCR), a provider of pharmacy distribution and consulting services to long-term care centers and hospitals in 47 states and D.C.
Clinical Research Outsourcing Companies or CROs Charles River Labs International (CRL), a provider of outsourced preclinical and Phase I services, animal research models and associated services; and Laboratory Corporation of America (LH), a provider of clinical testing services via a national network of 51 primary laboratories and over 1,700 service sites.
Hospital companies Lifepoint Hospitals Inc. (LPNT), an operator of 52 general acute care hospitals providing medical and surgical services in 17 states; and Rehabcare Group Inc. (RHB), a provider of rehabilitation program management in over 1,250 hospitals, nursing homes and other long-term care facilities, being acquired by rival Kindred Healthcare Inc. (KND), an operator of 89 long-term acute care hospitals in 24 states and 226 skilled nursing center in 28 states.
Outpatient and Home medical services providers Lincare Holdings Inc. (LNCR), a provider of oxygen and other respiratory therapy to patients at home through 1,090 operating centers in 48 states; and Amedisys Inc. (AMED), a provider of home nursing services through 486 home health agencies and 67 hospice offices in 45 states.
Davita Inc. (DVA), a provider of dialysis services to patients with end stage renal disease via 1,612 outpatient dialysis centers in 42 states.

Obama Suggests US Should Be Able To Negotiate Drug Prices

WASHINGTON -(Dow Jones)- President Barack Obama on Thursday said prescription drug costs should be lower, and suggested giving the government power to directly negotiate drug prices and allowing medicines to be imported from abroad would be ways to lower prices.

The pharmaceutical industry has vehemently opposed both ideas, saying they would hamper innovation, harm the industry’s business model and expose Americans to unsafe drugs. Obama, during a live interview that aired on the video-sharing website YouTube, said the government should “look at” the two ideas.

His answer was prompted by a man who said his U.S.-made diabetes medicine is cheaper to purchase abroad. “Why does the same medication that I use cost so much less in Mexico or Canada, even though it’s being made right here in the United States?” the man said. He added, “We as a country need to fix this problem.”

The president said other countries can negotiate drug prices -the U.S. can’t. “We still don’t do that,” Obama said. He added, “I actually think it’s something we should do.”

The president’s health care law doesn’t include either option. The pharmaceutical industry, which favored the health law, wouldn’t have supported the overhaul if either were included.

The question about prescription-drug costs come as Republicans are working to repeal Obama’s overhaul of the health-care system. The law was aimed at expanding health-insurance coverage and lowering costs, though Republicans charge it will increase costs. Obama said he is open to ideas that will help make the health-care delivery system more efficient.

It’s unclear whether the Obama administration is seriously considering either of the ideas. The White House didn’t immediately respond to requests for comment.

Obama noted that drug costs for some senior citizens have fallen in part because the pharmaceutical industry agreed to spend billions discounting the cost of drugs for seniors.

Wes Metheny, a senior vice president for public affairs at PhRMA, the main lobby for the pharmaceutical industry, said the industry still opposes allowing the government to negotiate drug prices and letting people import drugs from abroad. He said there is “no guarantee” that either would lower costs.

Allowing drug to be imported from abroad is something health officials from both Republican and Democratic administrations have opposed. The person Obama tapped to head the U.S. Food and Drug Administration, Margaret Hamburg, said allowing drugs to be imported from abroad would endanger the medicine supply.

Pharma exports may touch a record Rs 50,000 cr in 2010-11

ports had registered near-muted growth in value terms during 2009-10.

The export revenue of the Indian pharmaceutical industry may touch Rs 50,000 crore for the first time ever, thanks to an estimated 20 per cent growth during 2010-11 over last year’s annual sales of Rs 42,092 crore.

The growth estimates turn significant as the medicine exports from India had registered near-muted growth in value terms during 2009-10, an indirect effect of the global economic slowdown that saw companies exhausting their inventories instead of making fresh orders the previous year, says Pharmaceutical Export Promotion Council (Pharmexcil) officials.

The expected growth is primarily linked to the fresh contracts from key export markets in North America and Europe.

“Pharmaceutical exports had grown only 4.13 per cent in 2009-10 as drug exporters were the last to be affected by the global economic slowdown. Things have changed and drugs worth Rs 15,161 crore were exported during the April-July period in 2010-11,” Pharmexcil Executive Director P V Appaji said. The revenues during the April-July period was 14.16 per cent higher than Rs 13,280 crore recorded during the same period a year before.

According to Appaji, the current growth percentage is about 20.

Incidentally, US market had shown strong growth trends even when the overall growth dipped to 4.13 in 2009-10. The fall was primarily led by decline in revenues from the European Union, which is India’s second-biggest medicine export market after the US. Africa, Latin American countries and countries that were part of the former Soviet Union had also showed decline in growth during this period.

US government seeks pharma feedback on cargo screening

The US Transportation Security Administration is seeking pharmaceutical industry comment on plans to bring forward 100 per cent screening of cargo carried by inbound international aircraft.

The TSA already mandates screening for domestic and international passenger aircraft originating in the USA, as well as high-risk inbound cargo, under measures introduced last year. Now however it has brought forward the 2013 deadline for screening 100 per cent of all inbound international cargo to December 31, 2011.

The new measures were announced in the wake of the incident last year in which two bombs disguised as toner cartridges were intercepted en route to the USA from Yemen.

Airlines, freight forwarders and cargo carriers have up to 45 days to comment on the new inbound requirement, and the TSA also wants to make sure that the requirements will not have a deleterious effect on access to medicines.