Pharmaceuticals

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Pharmaceuticals

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Pharmaceutical Industry News
Feb 07, 2012 09:01AM

http://www.fiercepharma.com/news/frontpage

Feb 06, 2012 10:17AM

NICE eyes NHS formularies for excluded drugs

The U.K.'s cost-effectiveness watchdog doesn't want its advice to go unheeded. The National Institute for Health and Clinical Excellence will review National Health Service formularies, which vary from locale to locale, to see not only how they're put together, but to iron out differences that may withhold drugs from patients in some areas while providing them in others.

NICE reviews new drugs for cost-effectiveness, and approval is not known as an easy mark. Still, NICE-approved meds aren't always found on local formularies, most often because officials in those areas are trying to cut costs, InPharm reports. The NHS is tasked with cutting almost $570 million from drug spending this fiscal year, and some local trusts are recommending against new and pricey drugs, even when those drugs have been cleared by NICE.

The variance in drug availability--known as "postcode prescribing"--has drawn fire from patient groups, but also from drug companies that have managed to get their products through the NICE process. The Department of Health has officially come out against postcode prescribing, InPharm notes, and that's why NICE has embarked on the formulary review.

"NICE-approved drugs should not be excluded from local formularies on the grounds of cost," NICE's deputy chief executive, Dr. Gillian Leng, said (as quoted by InPharm). "We want all patients to have access to medicines that we consider to be effective."

- get the InPharm coverage

Feb 06, 2012 09:57AM

Is Sanofi destined to be 'small player' in MS?

Sanofi ($SNY) CEO Chris Viehbacher (photo) is talking up trial results on his multiple sclerosis hopeful Lemtrada, acquired in his buyout of Genzyme. But advances by other companies are making it difficult for Sanofi to impress analysts with its own prospects. Report

Feb 06, 2012 09:54AM

Medicaid proposal would let states figure base prices

Medicaid drug pricing has long been a complicated, murky area. So murky, in fact, that drugmakers found themselves party to dozens of lawsuits alleging that they'd inflated wholesale prices reported to the government program, collecting millions more for drugs than the pricing rules allowed.

Now, a new Centers for Medicare and Medicaid Services rule would unhook Medicaid reimbursements from companies' self-reported wholesale prices. States will be allowed to collect their own wholesale-pricing information from pharmacies, and base their reimbursements on those figures instead. As the Boston Herald reports, the feds project savings of $17.7 billion from the change, along with new, higher rebates over the next 5 years.

The proposed rule, issued to comply with the Affordable Care Act, was inspired by a program used in Alabama. Medicaid officials there rounded up wholesale prices from pharmacies to figure their own averages based on bills those pharmacies actually paid. The state estimates it saved $30 million in one year from the change. Three other states imitated Alabama's efforts, and now, the federal government wants to make it easier for all states do the same thing--and to help the states collect their pricing data by setting up a nationwide database.

The rules proposal also specifies new rebate increases for Medicaid, to 13% from 11% on generics and to 23.1% from 15.1% on branded meds, as specified by the healthcare reform law. The CMS is seeking comment on the rule proposals through next month, with final rules coming in 2013.

- read the Herald piece
- get more from PharmaTimes

Feb 06, 2012 09:32AM

Lilly hunkers down for lean years with salary freeze

Eli Lilly ($LLY), languishing in the doldrums of its long-expected "Years YZ," has frozen the salaries of many of its staffers, including those of top management. As Pharmalot reports, the company disclosed in a recent Securities and Exchange Commission filing that employees in "most countries" around the globe "will not receive base pay increases in 2012." And for the third year in a row, CEO John Lechleiter (photo) has asked for no increase in salary or incentives for 2012.

The proxy statement attributes these moves to "the business challenges the company faces." These challenges aren't inconsiderable. Lilly's fourth quarter results showed that losing patent protection on its big-selling Zyprexa antipsychotic pill has hurt more than expected; sales already dropped by 44% to $749.6 million. Its Q4 profits fell by 27%, and earnings for 2012 are expected to take a big hit.

Lilly's patent-cliff "YZ" years were destined to be lean, but some R&D projects haven't panned out as hoped. The employees' hope for raises in 2013 could well depend on two ongoing trials of a potential Alzheimer's treatment. That data "is going to be the biggest thing they are going to report this year," Morningstar's Damien Conover told Bloomberg last week.

- see the SEC filing
- get the Pharmalot post

Feb 06, 2012 09:25AM

Drugmakers aim to dampen risks in slow-paying countries

At first, the mere fact that troubled European countries were deep in debt to drugmakers was news. Then, it was the mounting size of those pharma debts and that Greece, at least, was paying its drug bills with bonds worth far less than their face value. Now, the slow payments and forced discounts are a fact of life--and pharma companies have developed a variety of strategies for making the best of the situation.

As the Financial Times reports, estimates for unpaid pharma debts in Europe's troubled markets top €12 billion, or more than $15 billion. The payments problem has hurt small, regional companies more than Big Pharma, but companies of all sizes are getting creative about managing the risks. Germany's Merck KGaA has started a cash-on-delivery payment program, pharma chief Stefan Oschmann told the FT. The company is also "looking at how much we will, in future, invest in commercial infrastructure," Oschmann said.

Meanwhile, AstraZeneca ($AZN) CFO Simon Lowth said drugmakers are negotiating to offset government price cuts against their unpaid debts to reduce the losses. Novartis ($NVS) CEO Joe Jimenez (photo) says his company has changed its compensation plans to incentivize cash collections, not just sales. Smaller companies have used factoring to turn unpaid debts into cash. Some have obtained bank loans secured by those unpaid bills.

Other companies--including Novo Nordisk ($NVO) and Sanofi ($SNY)--have shifted their product offerings. Rather than supplying the newest, priciest drugs to countries that are slow to pay, they're offering older and cheaper medicines, the FT reports. Another strategic shift: supplying drugs not to the facilities slowest to pay, such as government-funded hospitals, but to faster-paying individual pharmacies. Cutting inventory is another approach, Bayer HealthCare chief Jörg Reinhardt said.

- read the FT roundup

Feb 06, 2012 07:59AM

Amgen's Xgeva faces doubters on new indication

The FDA isn't convinced that Amgen ($AMGN) needs another bone-metastasis indication for its new drug Xgeva. The drug is already approved to treat skeletal side effects in cancer patients, but Amgen is asking to market it as a preventive tool for men with advanced prostate cancer. The idea is that earlier use of Xgeva might stave off--or at least delay--development of bone metastases in those men. The other idea, of course, is that marketing the drug for that use could increase sales.

Since the data on preventive Xgeva use came in, though, analysts haven't been very upbeat about those sales prospects. The drug didn't prolong patient's lives, and though it did appear to delay bone metastases, the average increase in "bone metastasis-free survival" was just 4.2 months.

FDA reviewers raised similar questions about the data in documents released in advance of Wednesday's advisory committee meeting. And they cited a 5% increase in cases of jawbone deterioration in Xgeva patients. The agency staffers questioned whether the metastasis-free survival time of just over four months was "meaningful," considering that Xgeva is already approved to prevent bone-related side effects in patients whose cancer has moved into the bone.

"Does early treatment ... add to the benefit provided to patients when denosumab is administered in the metastasis setting?" the agency asked. And the reviewers went on to cite a Lancet editorial that took issue with the proposed new indication. "The reported findings support its use as an alternative to zoledronic acid [Novartis' bone drug Zometa], but do not support its broad use as a preventive agent for bone metastases in prostate cancer," the editorial stated.

As EvaluatePharma notes, an argument could be made for approval based on patients' quality of life--bone tumors are exceedingly painful--but that may not wash with the FDA's expert panel. "With an overall survival benefit, there would have been little doubt Xgeva would gain the prevention indication," the market research firm notes. "As it stands, it will need sympathetic panelists who see the benefit in delaying the onset of the painful bone metastases and, given how Xgeva divides opinion, that outcome seems unlikely."

Advisory committees have surprised observers before, however, so the vote may yet go Amgen's way. And the argument won't be completely over until FDA makes its own decision, expected in late April.

- get the FDA documents
- read the EvaluatePharma analysis
- see the story at The Street

Feb 03, 2012 07:33AM

Astellas scores highest in Japanese M&A bout

Japan’s biggest pharma players have been roaming the world in recent years in a restless search for new acquisitions. They've been looking for deals to put an extra oomph into their earnings. Now The Wall Street Journal is reviewing the biggest buyers and seeing who scored the juiciest gains, and who harvested bitter losses.

Astellas Pharma, which acquired OSI Pharmaceuticals in 2010, comes out on top. A big reason is OSI's cancer drug Tarceva, which racked up a 55% increase in sales for the 9 months through December. The biggest loser: Daiichi Sankyo, which has been wrestling with a major league headache after its deal to acquire a majority of Ranbaxy left it with a mountain of manufacturing woes. Its $500 million provision to settle the issue is driving a 79% plunge in annual net profit.

Takeda Pharmaceutical is slated for the next big test after completing the $13.7 billion deal for Nycomed. As the WSJ notes, Takeda is pushing through a rapid streamlining effort to bring down some hefty costs. But it's also seen a big jump in emerging market sales--a key criterion for success in the Big Pharma world.

- see the story in the WSJ

Feb 03, 2012 07:30AM

Mediator probe rolls on with searches at Afssaps, executives' homes

The Mediator scandal in France continues as investigators searched the offices of healthcare regulators Afssaps and the homes of several of its executives. The agency faced a public outcry over its decision to keep the weight-loss drug on the market years after it was pulled in other countries. Report

Feb 03, 2012 07:13AM

FDA talks, but doctors don't necessarily listen

Poor FDA. It takes flak every time a drug spawns unexpected side effects. But when it tries to warn doctors about those side effects--and offers advice for preventing them--few physicians are listening. As AMedNews reports, researchers looked at 16 drugs that got new label warnings or were mentioned in "Dear Doctor" letters from 1990 to 2010. And they found that doctors' behavior often changed very little after those cautionary tales were told.

When the FDA recommended that patients using atypical antipsychotics--such as Eli Lilly's ($LLY) Zyprexa and AstraZeneca's ($AZN) Seroquel--be monitored for signs of diabetes, rates of blood-sugar testing in those patients didn't increase, AMedNews reports. When the agency repeatedly warned against combining the acid-reflux remedy Propulsid with the blood-pressure pill Atacand, prescribing habits didn't change for 18 months.

In other cases, the study found, warnings did change behavior--but not in the way FDA intended. Warnings against antipsychotic use in dementia patients ended up affecting prescription levels for on-label use in psychiatric patients.

The FDA's red flags were most effective when the messages were clear and communicated repeatedly, the study found. That conclusion prompted co-author G. Caleb Alexander to suggest borrowing from Big Pharma's marketing playbook. "The agency might learn a thing or two from the pharmaceutical firms that it regulates with respect to risk communication," Alexander told AMedNews. "They should be using principles of market segmentation to identify high-volume prescribers and then disseminating or conducting messaging of drug risks to those specific physicians."

- see the AMedNews story
- get more from HealthWorks Collective

Feb 03, 2012 06:49AM

Gloom for the pharma industry, yes. Doom? No

AstraZeneca's ($AZN) layoffs announcement yesterday touched off more than its share of hand-wringing. It may be a straw-that-broke-the-camel's-back case; this shedding of 7,300 jobs follows a spate of payroll-cutting news from Novartis ($NVS), Sanofi ($SNY), Teva Pharmaceutical Industries ($TEVA), Takeda Pharmaceutical, and more. And it adds to AstraZeneca's already daunting total of 21,000-plus since 2007.

Still, so many government officials and media outlets have been aflutter about the news that the Association of the British Pharmaceutical Industry felt the need to issue a statement: No, AstraZeneca's job cuts don't signal doom for the U.K. pharma industry. The company's restructuring, ABPI helpfully points out, is global. WBB Securities analyst Steve Brozak went so far as to tell the AP that the industry's situation is "suicidal."

Just take a look at this quarter's pharma earnings for more evidence on that score. The majority of drugmakers are expecting a lackluster year at best, with slight to no sales growth. Some expect revenues to drop. Others predict earnings increases, but only on the back of cost-cutting. AstraZeneca is just one company that announced another round of dividend increases and share buybacks to keep investors interested.

The problems are familiar to anyone who's been following pharma. Patent expirations on the industry's biggest-selling drugs. Pricing pressures from austerity-minded European governments. New Medicare rebates in the U.S. Ever-more-challenging R&D, with higher costs and fewer successes. "It's just an immensely challenging time for big pharmaceutical companies," EvaluatePharma CEO Jonathan de Pass told the BBC. "Their whole business model is under huge strain--the whole research model is under pressure."

Thing is, though, that the industry has been preparing for this ugly scenario for years. Knowing they would lose billions in sales to generic competition, companies have either diversified into related businesses--eye care, consumer health--or broadened their geographic reach, or brought in promising new products, or all of the above. Those who haven't moved into other businesses have focused more tightly on their cores. Most have put more effort into specialty drugs, even meds targeted at very small, genetically selected populations.

Some drugmakers have been more successful than others. Some will no doubt disappoint their stockholders. But others are sloughing their way through this year on their way to upward-facing sales trends. It's deciding which is which that's the real challenge.

- see the ABPI statement
- read the Guardian story
- get more from the BBC
- check out the AP piece