Fierce Pharma

Johnson & Johnson recalls a lot of Imodium

Johnson & Johnson's ($JNJ) McNeil Consumer Healthcare, which has gotten accustomed to recalling products in large quantities, is retrieving a lot of Imodium--nearly 54,000 packages. There is no health threat, just a hole in some packages that, because of exposure, might reduce the diarrhea drug's effectiveness, The Wall Street Journal health blog reports. This is an old hat for the consumer health unit, which since December has had to recall over 12 million products, from children's Tylenol for a stopper problem to Motrin tablets with a dissolution issue. It is a reminder that new CEO Alex Gorsky has got to get manufacturing problems at the company under control or risk his own standing, particularly given that predecessor Bill Weldon was probably asked to retire early in the face of the constant march of recalls. Story | More

Reuters: Drugmakers crafting emergency plan for Greece

Drugmakers are putting together a plan for how to keep medications flowing to Greece if the economy collapses and payments become uncertain.

With the possibility of a financial default escalating there, drugmakers are working with European authorities to avoid a crisis, according to Reuters in an exclusive report. They are said to be studying the 2002 default in Argentina as a blueprint.

Because Greece is a small market, it is believed that most drugmakers can work with the country on delayed payment basis for awhile. But something has to be done, because the country has almost no domestic production, importing nearly everything and also buying mostly branded, not generics. As a result, its drug costs per capita are substantial, Reuters reports.

"There's a moral obligation to continue to supply," said Simon Friend, global pharmaceutical leader at PricewaterhouseCoopers. "Greece is not a big market, so most drug companies can absorb it … the reputational damage would, I think, more than outweigh the economic cost."

Novo Nordisk ($NVO) found that out last year, when it withheld insulin from the market for about a month after the government slashed its payment rate 25%. Still Novo got the government to settle for a smaller reduction. It is reportedly now on c.o.d. with the country's state-run hospitals. Others, like GlaxoSmithKline ($GSK), have not changed payment policies. Roche ($RHHBY), which makes most of the world's cancer drugs, requires payment upfront from slow-pay hospitals but does not require that for drugs like CellCept, or its HIV medication, a spokesman told Reuters.

Still, there have been some drug shortages in the market and drug manufacturers are reportedly owed about €1.21 billion ($1.5 billion), the story says. And in a country where bribery and corruption are prevalent, drugmakers worry that if they keep supplying on credit, drugs might get diverted and sold in markets that can afford full rates.

- read the Reuters exclusive

Even some domestic firms rail at India's price control plan

India's plan to again put price controls on the majority of the drugs in the country has become a flash point for companies there as well as Western drugmakers.

The proposal is being debated now and is drawing sharp responses from a spectrum of producers, as well as those who support the plan.

The potential for sales in India has made it a big draw for global companies who are finding emerging markets more attractive than more mature Western markets. Drug spending is projected to hit $17.5 billion by 2014 from $12 billion today, reports The Wall Street Journal. That is a 45% jump in two years.

An estimated 70% of health spending comes directly from the pockets of patients, since about two-thirds of India's 1.2 billion people lack health insurance. That has led to a pervasive idea that Western drug companies owe the country the responsibility of providing lifesaving medications at very low prices. That philosophy has also led to some nasty patent fights. A court recently ordered Germany's Bayer AG to give up its license on its kidney and liver cancer drug Nexavar to an Indian generic drug producer. But some of India's own drugmakers bristle at the plan for price caps.

"The market itself should determine the price," said Ajay Piramal, chairman of Piramal Healthcare. "The customer has the choice to get a cheaper alternative."

Some, like the head of operations in India for Novartis ($NVS), Ranjit Shahani, suggest that instead of artificially depressing drug prices, the government needs to provide better access to healthcare. "Access goes far beyond pricing," Shahani was quoted as saying in the media.

The government has yet to follow through with a promise to increase public healthcare spending to 2.5% of gross domestic product over the next 5 years from 0.9% currently to upgrade decrepit hospitals and educate more doctors.

Thirty years ago, India had price controls on about 350 drugs but reduced that to 74 in the 1990s as it moved toward market reforms. It sets a price for those drugs after calculating a manufacturing cost and putting a maximum markup on them. Those 74 represent about 20% of the drugs in the market. The proposal, which could become law this year, is looking to increase that to about 65% of drugs.

- read the WSJ story

Employers eye costs of specialty drugs

Employers have drug costs on their minds lately. Balancing the cost of drugs against care has swelled as the key consideration for companies evaluating drug plans in a survey by Express Scripts.

Where 5 years ago only 41% of respondents said "balancing cost with care" was their main concern, now that number is 78%, reports Reuters. Meanwhile, where 57% said "providing the broadest coverage" was the most important measure 5 years ago, now only 14% of respondents think that is the main deal.

How companies and their benefit managers structure prescription drug benefits can have a big impact on the pharmaceutical industry. And they have been taking aggressive steps to keep on top of prices. A coalition of unions and a consumer group recently sued 8 of the largest companies, including Pfizer ($PFE), Merck ($MRK) and GlaxoSmithKline ($GSK), for using coupons to try to lure patients away from generics.

And companies are thinking hard about things like the cost of specialty drugs, the high-priced medications often used for the most serious conditions like cancer or rheumatoid arthritis. While only 36% of plan managers said specialty drugs are their key concern, the drugs are the primary concern for 58% of companies with more than 25,000 employees.

There is a reason specialty drug costs are on employers' minds, Tim Wentworth, Express Scripts' president of sales and account management, tells Reuters. While they make up less than 30% of what a company is spending on drugs, they are the fastest-growing segment in terms of cost. Last year, spending on medications grew 2.7% while spending on specialty drugs was up 17.1%, he said. It is the fastest-growing segment, "so they want to put things in place now," he says.

One way to do that is with step therapy, requiring plan members to try the low-cost drug before moving to another medication. Most companies expect to institute such a plan within two years, the survey found.

- read the Reuters story

Warner Chilcott sues Watson to stop generic contraceptive

In a bit of drug family planning, Warner Chilcott ($WCRX) has sued Watson Pharmaceuticals ($WPI) to prevent it from putting out a generic version of its oral contraceptive Lo Loestrin Fe.

It is a sensitive time for Warner Chilcott, which recently announced that it was exploring alternative strategies for the company, the buzzwords that indicate that it is probably putting itself on the market. It has said it is talking with potential suitors. By going to court, Warner freezes the FDA from approving the generic for 2½ years, reminds Bloomberg.

Warner Chilcott, in its federal court filing, claims that Watson, a large generic player, would violate two patents and seeks to hold it off until they expire in July 2014 and February 2029, reports Bloomberg.

Warner Chilcott had revenue of $2.7 billion last year, led in part by the Loestrin portfolio of drugs, but sales are predicted to fall 15% for the three years ending in 2014 as generics begin to attack the line. Meanwhile, production of its Ovcon 50 mg contraceptive has been interrupted because the plant in Puerto Rico where it is manufactured is laboring under an FDA warning letter.

- read the Bloomberg story

Generic floodgates open for Plavix in U.S.

Plavix is a blood thinner from Bristol-Myers Squibb ($BMY). Generic Plavix is a Bristol-Myers profits thinner that is going to be produced by just about everybody and their brother.

The FDA on Thursday approved a long list of companies that supply clopidogrel, the generic version of the megablockbuster drug that last year brought in about $6.8 billion in the U.S. for BMS and its partner Sanofi ($SNY).

In an effort to hold onto as much of that revenue as they can, the pair said they will be offering current patients a special program that would bring the monthly cost of Plavix down to $37 from the expected $100, reports The Wall Street Journal. It is a tactic used to little success by Pfizer ($PFE) in the face of the generic onslaught on Lipitor. Lipitor last year was the only drug that outsold Plavix in the U.S., but it has seen such erosion of market share that Pfizer has quietly given up marketing it.

BMS executives acknowledge that in a generic Plavix world, sales gains are going to be more difficult to cultivate. Plavix last year accounted for 33% of its revenue. They were encouraged by growing sales of some new drugs in the first quarter, including cancer drug Yervoy, hepatitis B drug Baraclude, and Sprycel, a drug for chronic myeloid leukemia, which posted a 34% gain to $231 million.

So who gets to sell generic Plavix in the U.S.? The 75-milligram dose will be sold by Mylan Pharmaceuticals ($MYL), Teva Pharmaceutical Industries ($TEVA), Apotex, Aurobindo Pharma, Roxane Laboratories, Sun Pharmaceutical Industries and Torrent Pharmaceuticals, the WSJ says.

Teva, Mylan, Dr. Reddy's Laboratories and Gate Pharmaceuticals, get to sell a 300-milligram dose of clopidogrel, with Mylan getting an 180-day exclusivity for being first across the approval finish line. Mylan apparently has its clopidogrel ducks all lined up because it says it is shipping its products immediately.

- here's the WSJ story
- read the FDA release

HGS puts 'poison pill' in its arsenal against GSK

Human Genome Sciences ($HGSI) has added a poison pill to its portfolio as it tries to fend off the hostile takeover by its longtime partner GlaxoSmithKline ($GSK).

The company says the shareholder-rights plan is for one year and gives all shareholders the right to acquire additional shares if one gets a 15% stake in the drugmaker, reports Dow Jones. These kinds of shareholder-rights plans are called "poison pills" because they are intended to kill off unwanted takeovers by diluting the value of shares and making a takeover more expensive.

Poisonous is probably the right descriptor for the atmosphere around the two companies that have worked together for 20 years and share the rights to HGS' lupus drug Benlysta, the first new drug for the condition in 50 years. HGS last month turned up its nose at GSK's $13-a-share, $2.6 billion buyout offer, saying it was not nearly enough given its own potential. Its shares are now trading above $14 a share. In response, GSK said it would forget playing nice and go directly to shareholders with an offer, which the HGS board hopes they will ignore while it figures out a way to get them more for their investment.

HGS says the rights plan will not prevent it from accepting any deals but will provide a buffer so its board can explore all of its options. It has already hired a couple of investment banks to help it parse through "strategic alternatives," including a possible sale.

- read the Dow Jones story
- get more from the AP

Study links Z-Pak with risk of sudden death

The commonly used Pfizer ($PFE) antibiotic Zithromax, also known as Z-Pak, may increase the risk of sudden death in adults, particularly adults with heart disease or at high risk of heart disease, a new study finds. Report | More

SEC probes Dendreon amid shareholder lawsuits

Dendreon ($DNDN) is under investigation by the Securities and Exchange Commission. As Dow Jones reports, the company disclosed the SEC probe in its quarterly filing, along with information about shareholder lawsuits that accuse the company of misleading investors about its prostate cancer therapy Provenge.

The lawsuits, now consolidated in federal court in Washington, claim that Dendreon and some executives and former executives made false or misleading public statements about the Provenge launch. Some allege that officials misappropriated company information and engaged in insider trading, the news service reports.

In the SEC filing, Dow Jones says, Dendreon says the lawsuits are without merit and that it intends to fight them. The SEC wouldn't comment.

The much-anticipated Provenge was approved by the FDA in April 2010. Early uptake of the drug proceeded slowly, but the company reminded investors that production limitations--and the drug's personalized nature--put natural limitations on the launch. As production expanded and more doctors gained familiarity with the drug, that was expected to change.

As Dow Jones reports, Dendreon revealed in August last year that doctors' adoption of the drug had slowed because of reimbursement issues. The company slashed its revenue forecast and the stock plummeted. Since then, the company has hired a new CEO, and it says Provenge is gaining.

- read the Dow Jones story

J&J's Zytiga may be useful in early prostate cancer, too

Johnson & Johnson's ($JNJ) Zytiga is FDA-approved for men with advanced prostate cancer. But a new study suggests it may be effective in early-stage disease, too. The small trial--it involved only 58 patients with localized, high-risk cancer--found that Zytiga wiped out or nearly wiped out tumors in one-third of them.

Zytiga was administered to these patients before surgery, in so-called neoadjuvant therapy. As The New York Times reports, patients with some other types of cancer live longer when their tumors are wiped out before the knife. And as lead researcher Mary-Ellen Taplin told the newspaper, high-risk prostate cancers aren't often cured by surgery, so successful neoadjuvant treatment could be big.

In this study, the abstract of which was released late yesterday in advance of the American Society of Clinical Oncology meeting next month, patients took Zytiga along with standard drug therapy for either 12 weeks or 24 weeks. In 10% of the men who took it for 24 weeks, tumors were undetectable after surgery, and in 24%, only a small amount of tumor remained. Among the men with 12 weeks of therapy, similar responses were seen in 4% and 11%, respectively.

Taplin cautioned that the results need confirmation before doctors start altering their treatment strategies. "This is a 58-patient trial and with a very, very expensive drug," she told the Times. "So I don't think anyone is going to be encouraging this type of treatment without more data." Zytiga is priced at about $5,000 per month.

More Zytiga data will be forthcoming at the ASCO meeting: A larger study of Zytiga in men with advanced prostate cancer, used before chemo, is due for unveiling then.

- read the NYT piece