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All that M&A activity in the pharmaceutical industry is making some people greedy. Consider Brent Bankosky. The former senior director at Takeda Pharmaceuticals has agreed to pay more than $136,000 to settle charges that he traded on inside information about various business alliances and acquisitions, according to the US Securities and Exchange Commission.

Bankosky, who worked at US headquarters in Deerfield, Illinois, garnered more than $63,000 in profits, which amounted to a 169 percent gain, by trading on non-public information about two deals in 2008. One was was a strategic alliance with Cell Genesys and the other was the acquisition of Millennium Pharmaceuticals, which known at Takeda by their code names: Project Ceres and Project Mercury.

This is only the latest instance in which pharma stocks were too tempting for some. Last October, former FDA chemist Cheng Yi Liang pleaded guilty today to charges that he used confidential information about upcoming announcements of 27 different FDA approval decisions involving 19 publicly traded companies and generated more than $3.6 million in illegal profits for himself (back story).

Last year, Massachusetts regulators faccused a hedge fund of making profits on two drugs stocks by using insider information, underscoring concern about the interplay between academic researchers and the pharmaceutical industry, as well as the extent to which privileged research data is being conveyed improperly (read here).

As for Bankosky, almost immediately after joining Takeda in January 2008, the 41-year-old began placing trades in his personal brokerage account based on inside info about the proposed strategic alliance with Cell Genesys, which was announced two months later. Then, he began making more trades based on the Millenium deal, which was announced in April 2008.

But there was more, according to the SEC. In subsequent years, he bought out-of-the-money call options in Arena Pharmaceutical and AMAG Pharmaceutical because Takeda was holding confidential talks with both drugmakers. However, the agency says Bankosky did not realize any profit on either occassion (here is the SEC complaint).

As important trade talks begin tomorrow between the European Union and India, a growing chorus of patient advocacy groups and non-governmental organizations are imploring Indian officials to reject proposals that they claim were initiated at the behest of the pharmaceutical industry and would inhibit access to various life-savings medicines, notably treatments for HIV.

At issue are provisions in a draft agreement that would commit India to extend liability to third parties involved in making or distributing generics; allow global drugmakers to seek arbitration to resolve intellectual property disputes, which may affect public policy and pricing, and adopt data exclusivity, which would set a strict timetable for determining when generic copies can be made.

India produces “high-quality products and have made remarkable efforts to make them patient-friendly at guaranteed low prices,” UNITAID executive director Denis Broun says in a statement. “We are extremely concerned that attempts to restrict India’s ability to produce such medicines quickly and cheaply will have tragic consequences for global health programs worldwide.”

The concerns come several months after India promised not to link a trade deal with the EU to any limits on making generic AIDS drugs, according to a joint statement from India’s Commerce Minister Anand Sharma and the Joint United Nations Programme on HIV/AIDS last summer. They were responding to criticism that pharma was pushing provisions that would limit availability of AIDS meds (see here).

Which provisions concern the advocacy groups and NGOs? For instance, the draft agreement would require India to widen border enforcement so that legitimate medicines, which allegedly infringe on a trademark, could be detained or destroyed when being exported because labeling appears similar to the brand-name product.

In a letter to Indian Prime Minister Manmohan Singh, Medicines Sans Frontieres writes that this approach is justified by protecting the public from counterfeits, but has been used in Europe recently to prevent transport of legitimate generics from India en route to other nations where patient access to various treatments is limited.

The controversy over repeated seizures boiled over last year as infuriated Indian generic drugmakers complained that exporters would be forced to find alternative routes to send shipments, which would increase costs and hurt competitiveness (back story). MSF maintains this provision goes beyond the existing Trade Related Aspects of Intellectual Property Rights international agreement reached in 1994.

Another provision that has drawn protest would extend liability to third parties, which means that any number of different entities could be ensnared by an alleged trade violation, including suppliers of active pharmaceutical ingredients used for making generics; distributors and pharmacies and NGOs that provide treatment. “This could act as a significant deterrent to anyone involved in the production, sale or distribution of affordable generic medicines,” MSF argues.

Last September, Warner Chilcott attempted a novel tactic to thwart generic competition for its Doryx acne pill. The drugmaker added a so-called score, or line, across the tablet and then filed a citizen petition with the FDA in hopes the agency would force generic rivals to rework their own versions, which would delay approval of competitive products (back story).

The Doryx tablets had one score, which generic rivals planned to sell last fall. By adding scores, patients would presumably find it easier to divide a tablet into thirds. The drugmaker argued to the FDA that doctors might write a prescription for Doryx and instruct patients to divide its 150mg tablet into thirds, but patients would find it difficult to obtain the correct dose from a tablet with one score.

This may seem like so much inside baseball, but Warner Chilcott argued that a larger issue was actually at stake - the potential for medication errors. And the drugmaker maintained that the FDA should grant its request because approving a generic with just one score would raise “public health concerns” (here is the citizen petition). The gambit was apparently the first of its kind and generated considerable interest.

The FDA, however, is not buying the argument. Yesterday, the agency denied the citizen petition and made a point of contending that public health concerns would not be raised. In fact, the agency also approved a generic version of Doryx from Mylan Laboratories, although existing patent litigation - specifically, a temporary restraining order - prevents the copycat from being sold for now.

Why did the FDA make this decision? As one might imagine, there are several technical reasons. For one thing, though, Warner Chilcott argued against causing confusion in the marketplace, but the agency noted that the drugmaker planned to simultaneously sell both versions of its own Doryx tablet - single and dual-scored. This also held the potential for causing consumer confusion, the FDA wrote.

The FDA also pointed out that, “unlike medications for certain other chronic diseases where patients may need to use a scored tablet to titrate their dose of medication based on changing disease state or changing response to therapy over time, doxycycline dosage would rarely be adjusted in this manner. ..It is unlikely that the patient will have to determine how to use the score for a subsequent unanticipated dosage adjustment because for these products, doses are not typically adjusted based on a patient’s response after the initial prescription.”

In other words, the scenario envisioned by Warner Chilcott did not raise the specter of patients becoming confused and taking incorrect dosages, at least as far as FDA officials were concerned. You can read the rest of the FDA letter, which was signed by Janet Woodcock, who heads the agency’s Center for Drug Evaluation and Research, to Warner Chilcott here.

What happens next is unclear. But the rejection clarifies the agency position on such arguments. Whether Warner Chilcott attempts to challenge this decision and file a lawsuit against the FDA is not yet known. We have asked the drugmaker for a response and will update you accordingly. Meanwhile, the fate of a generic Doryx is also uncertain, as one Wall Street analyst points out.

“It may be premature to assume that a generic for Dorxy 150 is a foregone conclusion,” writes RBC Capital Market

Two months after US Department of Health & Human Secretary Kathleen Sebelius took the unprecedented step of overruling the FDA and thwarted a move to ease access to the Plan B pill, a coalition of reproductive rights advocates has asked a federal judge to reopen a 2005 lawsuit that challenged FDA access restrictions but was effectively ended by the HHS decision.

Led by the Center for Reproductive Rights, the advocates want a ruling that would end a decade-long battle and allow the emergency contraceptive, which is also known as the morning after pill, as well as generics to be immediately approved for unrestricted, over-the-counter sale. Currently, the pill is available only to women age 17 and older without a prescription, and only behind counters.

“The FDA has continually treated emergency contraception completely different than it has any other medication,” Suzanne Novak, senior staff attorney for the Center for Reproductive Rights, says in a statement. “We are asking the court to recognize that the FDA has failed to meet its obligation to the public and make decisions based on science, rather than politics.”

Here is the motion to reopen the lawsuit and add Sebelius as a defendant and the motion for summary judgment.

The move is likely to keep a highly controversial issue in the public eye. After Sebelius overruled the FDA, which had decided to approve wider access to younger teenagers, the Obama administration was accused of politicizing the agency, given that some believe the pill is akin to abortion and appealing to conservatives is a priority in an election year (read here and here).

The CRR, which leads a collection of reproductive rights groups and women’s health organizations, had originally filed a citizens petition in 2001 that sought over-the-counter status for the pill, and then filed the 2005 lawsuit. The following year, the FDA agreed to make the pill available without a prescription, but only to women older than 18 and only behind counters.

Fast forward to 2009: a federal judge ordered the FDA to reconsider its 2006 decision and chastised the agency for being “arbitrary and capricious,” making decisions in “bad faith” and being influenced by “impermissble political and ideological considerations” imposed by the Bush White House. The FDA responded by lowering the age threshold to 17, but the other restrictions have since remained intact.

After Sebelius overturned the FDA approval, however, the FDA explained that the application to approve greater access to girls 16 and younger without a prescription was denied because CRR and other health groups relied on older data for Plan B, not the newer Plan B One-Step for which Teva Pharmaceuticals was seeking approval. Such explanations were dismissed as bureaucratic backtracking.

“In our opinion, the secretary’s decision to retain behind-the-counter status for Plan B One-Step was based on politics rather than science. It cannot be based on issues of safety, since a 12-year-old can purchase a lethal dose of acetaminophen in any pharmacy for about $11, no questions asked,” three physicians wrote in an editorial in The New England Journal of Medicine last month.

“The only documented adverse effects of a $50 dose of levonorgestrel are nausea and delay of menses by several days. Any objective review makes it clear that Plan B is more dangerous to politicians than to adolescent girls.” The editorial also noted that the study data reviewed by the FDA indicated teenage girls as young as 15 years old could use the pill properly.

As in the past, the issue could very well languish still more in the federal courthouse in Brooklyn. On the other hand, the decision by Sebelius to overrule the FDA has not only generated renewed attention, but also thrust the White House into a politically charged situation that Obama campaign strategists would most likely prefer to avoid. What do you think?

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THIS ITEM WAS MOVED UP FOR THOSE WHO DID NOT SEE THIS LATE YESTERDAY. In the midst of ongoing negative publicity and controversy over ties between the medical community and the pharmaceutical industry, a majority of physicians who were surveyed in 2009 reported that they completely agreed with the idea that financial relationships with drugmakers should be disclosed. To be specific, nearly 65 percent endorsed transparency.

However, there were some interesting wrinkles within this group. Physicians who attended med school in the US were significantly more likely than doctors who attended international medical schools to say that such relationships should be disclosed. Physicians who were in practice for the longest stretches also agreed with the notion and women were more likely than men to provide responses indicating disclosure should be made, according to a study published in Health Affairs (here is the abstract).

“The majority of American physicians, however, agree this information should be made public to patients. And so doctors who don’t completely agree are considered different than the norm of the majority of people in clinical practice,” Eric Campbell, an associate professor of medicine at Harvard Medical School and one of the study co-authors, tells us. “As far as I can tell, there’s no huge groundswell among physicians not to make the information public.”

Their responses came amid a widening scandal over undisclosed ties between doctors and drugmakers, an issue that prompted a long-running Senate probe that looked specifically at federal grants given to academic researchers who were investigating drugs while simultaneously accepting grants or assorted fees from industry. The issue subsequently prompted legislation.

And this legislation, known as the Sunshine Act, was incorporated into health care reform. Next year, drugmakers are required to post payments exceeding $10 to physicians on their web sites (back story), although several have already done so either voluntarily or as a result of settlements with the federal government arising from investigations and lawsuits surrounding illegal marketing or defrauding healthcare programs (read more here and here).

The survey was conducted in order to look at the extent to which physicians are candid with their patients, a hallmark of the Charter on Medical Professionalism (read here). For instance, the study found 34 percent did not completely agree with disclosing serious medical errors and 17 percent did not completely agree they should never tell a patient something untrue. In the year before the survey was conducted, 55 percent described a prognosis in a more positive manner than was warranted.

Among the tenets of the charter is the principle that physicians should not exploit patients for financial gain, and they should manage conflicts of interest to retain patient trust. But despite endorsements by numerous professional medical associations, the study authors noted that it is not known how widely the provisions are actually followed by physicians.

And so, they queried 1,891 doctors in primary care - internal medicine, family practice and pediatrics - as well as four other specialties - cardiology, general surgery, psychiatry and anesthesiology. Each was given a $20 incentive, by the way. Response rates varied: at the high end, nearly 73 percent of pediatricians answered questions, while at the low end, only 51 percent of cardiologists did so.

Some tidbits: Of those who attended US med schools, 66 percent were significantly more likely than those who attended international schools to say financial relationships should be disclosed completely. “The implication is that as medicine continues to incorporate more international graduates, we will see less agreement in the future about disclosures,” says Campbell.

And about 70 percent of physicians who were practicing more than 30 years agreed with the need to disclose financial relationships, but that fell to 58 percent of doctors who were practicing less than 10 years. “It’s counterintuitive,” says Campbell. “Given the recent focus on conflicts in medical education, you wouldn’t think that to be the case.” Indeed, more medical schools have been adopting policies about interactions with drugmakers (read more here and here).

However, once the Sunshine Act kicks in and more payments become publicized, the study authors suggest that physicians will increasingly encounter patients who may want to discuss financial relationships with the pharmaceutical industry. Of course, some may resist discussing the topic, and so they write that “monitoring the effects of the law on this aspect of physician-patient communication will be important.”

pic thx to jerome kassirer

Hello, everyone, and how are you today? Another terribly busy morning is unfolding here on the Pharmalot corporate campus, where the short people need extra prodding on their way to the local schoolhouses. Nonetheless, we will persevere - with help from a few cups of stimulation - and look forward to a productive day. We hope yours is equally rewarding. To help you along, here are a few tidbits. And now, off to the races…

Ernst & Young Fined $2M By Watchdog For Medicis Audits (The Seattle Times)

Watson Seeks A ‘Transformational’ Acquisition (Bloomberg News)

Docs Ignore Triptan Cardiac Warnings In One Of Four Patients (Pain Medicine News)

Rx Costs Declined, But Remain High For Many Families (Drug Store News)

Greece Announces Compromise On Pharma Spending (Pharma Times)

NGOs Ask WIPO To Postpone IP Summit In South Africa (Pharma Biz)

Glaxo Tests Cheaper Advair For Emerging Markets (Bloomberg News)

Glaxo Brings Some Work Back In-House (Outsourcing Pharma)

FDA Panel Nixes Expanded Use Of Amgen Cancer Drug (Bloomberg News)

EDITOR’S NOTE: Please check this post for update throughout the morning

sunrise pic thx to benimoto on flickr

The ongoing controversy over conflicts of interest has the potential to ensnare just about anyone. Consider Eugene Braunwald, a Harvard Medical School professor and decades-long leader in the field of cardiology, who has published hundreds of papers and chaired a committee that recommended limiting outside income that can be accepted by physicians at Harvard teaching hospitals (back story).

In a letter in the latest issue of the Journal of the American Medical Association, Braunwald writes to explain differences in his financial disclosures that appeared in two previous papers - a commentary and an editorial - he and another physician published in the journal. Basically, he listed relationships that were believed relevant, but not all relationships for the preceding three years.

Why? “These were not listed because I did not consider them to be relevant to these two articles. I did not understand that all financial interests, regardless of their perceived relevance, had to be disclosed. I now understand the requirements for financial disclosure,” Braunwald writes (see this). “I hope that this clears up any possible misunderstanding.”

As it turns out, some relationships were mistakenly omitted during the publication process, according to a reply written by the JAMA editors, who add that “we fully recognize that determining relevant financial relationships involves judgment and that reporting of financial disclosure information certainly is not an exact science” (read here).

As noted by Retraction Watch, which brought this to our attention, “the fact that Braunwald’s disclosures required corrections is perhaps a good indication that even people who’ve thought about this issue a lot can still get lost.” Just the same, the lesson to be learned in this era of relentless calls for transparency is that the thing to do is simply list all relationships all the time. And if Braunwald can do it, so can everyone else.

Hat tip to Retraction Watch

Here is a finding that will likely thrill drugmakers that argue consumers should avoid purchasing their meds over the Internet: a majority of web sites selling cholesterol pills lacked information about contraindications, key warnings and side effects. Moreover, risk information was presented in a “chaotic” fashion and one-third failed to describe side effects in layman’s language.

Specifically, general contraindications were missing in 92 percent and info about contraindicated medicines was absent in 47.3 percent. Warnings about symptoms associated with myopathy, liver disease, hypersensitivity and pancreatitis were absent in 37 percent; 48 percent; 91 percent, and 96 percent, respectively. Only 7 percent listed side effects compatible with current prescribing info.

“This has potentially serious implications for the safety of purchasers who may not be aware of the problems associated with ordering medicines online or the actual medication, which they receive. Direct to consumer advertising websites need tighter controls,” write the authors in the latest issue of Pharmacoepidemiology & Drug Safety.

The authors last fall reviewed 184 that sell atorvastatin (Lipitor), pravastatin (Pravachol), rosuvastatin (Crestor), and simvastatin (Zocor) and 24 for fluvastatin (Lescol). Three types of sites were reviewed: those offering statins for sale directly to consumers without a prescription; those offering promotional information but no sales info, and those containing purchase info that may or may not be linked to television ads. The location of 40 percent of the sites could not be determined.

What else did they find? Well, just 5 percent stated that one or more of the meds was prescription only and just 8 percent noted these were for adults. Moreover, only 46 percent mentioned that a consumer should speak with a physician if they were already taking other meds. Two-thirds lacked clear instructions on how and when to take the meds, as well as storage instructions.

And here is another interesting finding: 8 of the websites were running ads that offered free Viagra with the purchase of any cholesterol med. The amount offered was in proportion to the amount of the cholesterols pill that were purchased. No clinical diagnosis was offered. The authors note that erectile dysfunction meds are not contraindicated with cholesterol meds, they should be used cautiously by men with cardiovascular disease; those with hypercholesterolaemia are predisposed.

“These data imply that adverts are designed to hide information from patients to widen the number of people who think that they can safely take (cholesterol) medicines, thereby increasing sales, or lack of research during site development,” the authors conclude, adding that few sites prioritized the four most serious side effects associated with statins, even though these constitute medical emergencies.

The authors, by the way, disclosed there were no conflicts of interest. Here is the complete study.

[UPDATE: We asked Gabe Levitt of PharmacyChecker.com, an online site that does not sell prescription meds, for his thoughts. This is his response: “This study is helpful and thorough as it applies to online pharmacies that don’t seem to require a prescription for prescription-only medicines. It seems aimed at those consumers who are willing to self-diagnose and buy prescription drugs without a prescription, a practice that should be strongly discouraged. Still, the study may be helpful in shaping industry standards on what safety information should be required of prescription drug-selling websites, even for those that do require a prescription.

“…It’s also noteworthy that the United Kingdom, the host country of the study does not have the drug affordability crisis that is found in the United States, and its consumers are not seeking out affordable options online for critical maintenance medications as they are in the United States. For some perspective, according to the Commonwealth Fund, 48 million Americans did not fill a prescription dug in 2010 due to cost – that number is close to the entire population of England.”

In 1997, a diligent vice president in the Bayer tax department named Paul Wright was reviewing a type of US tax credit the drug and chemical maker had taken in previous years for qualified research expenses and he decided that the US Internal Revenue Service had been incorrect to deny some or all these so-called QREs. And so, Bayer sought a $42.9 million refund.

Not surprisingly, the feds refused. In response, Bayer filed suit. And then the feds - guess what? - filed a counterclaim for federal income taxes for $80.3 million, plus accrued interest totaling $13.3 million, charging Bayer applied the credit too broadly (read the claim and counterclaim). But this is when the real haggling began. For nearly two years, Bayer and the feds have been sparring over the best way to streamline the case, which reaches back years and involves more than 1 billion documents.

Earlier this week, however, Bayer lost a crucial battle after a federal court judge ruled that its insistence on using samples of work from just a few of the dozens of US research centers was untenable. Why? The notion would not allow the feds to properly identify all of the business activities that were claimed as QRE credits. And so far, the IRS has refused to budge on the sampling proposal.

The dispute is far from over and, certainly, larger tax bills have been, and will be, the subject of acrimony between the IRS and corporations, including drugmakers. However, the spat may be instructive in that this offers an opportunity to view how QREs are handled when it comes to tax treatments and ensuing disagreements. QREs, by the way, are a subset of research expenses and are limited to salaries and wages, supplies and contract research performed by third parties.

In trying to fend off the $93 million tax bill - and win its hoped-for $42.9 million refund - Bayer argues that if the IRS would “conduct a detailed investigation of every one of the millions of expenditures, at every one of the 49 (Bayer research sites), for each of the more than 20 years at issue, discovery alone would require decades,” Bayer wrote in court documents.

How so? Bayer maintains that enormous expense has already been undertaken to ready documentation for the case, such as retrieving more than 1 billion pages of electronic records from four of the 49 sites. In other words, Bayer was hoping to minimize the extent to which the IRS would be able to fully vet all of the related activities for which these QREs were claimed.

Those four sites, by the way, are located in Berkeley, California; Kansas City, Missouri; Research Triangle Park in Raleigh, North Carolina, and Pittsburgh, Pennsylvania, where Bayer maintains US headquarters. Bayer maintains these sites were chosen for sampling since they purportedly comprise 49 percent of the total QRE credits claimed for the refund.

But US District Court Judge William Standish was having none of it. “Because identification of business components is critical to establishing Bayer’s entitlement to QRE credits for the credit years, a sampling plan that would not identify all of the business components underlying the claimed QRE credits is not acceptable in the absence of agreement by the government,” he wrote in a 49-page ruling earlier this week.

He went on to say that proposing a sampling technique was, essentially, a way to avoid complying with established requirements for producing documentation, and that the burden of rummaging through the equivalent of mountains of electronically stored documents was not an excuse that Bayer could use to avoid doing so. The judge also chastised Bayer for a bit of double speak.

“In fact, although Bayer represented in its objection to (a government filing) that more than 100,000 business components were produced during the credit years and Mr. Wright contends that identification of business components is ‘common sense,’ Bayer has refused for some unknown reason to identify a single business component supporting its refund claim in the almost two years this civil action has been pending,” he wrote (here is his ruling).

tax pic thx to donkeyhotey on flickr

Rise and shine, everyone. Another busy day is on the way. And you know what this means - a long list of meetings and deadlines awaits. In our case, we will also be conducting our own version of R&D: reading documents and studies and all sorts of provocative things. So no need to dilly dally. Grab a cup of stimulation and dig in. Hope your day goes well and, if you run across anything interesting, keep us in mind…

FDA Panel Nixes Expanded Use Of Amgen Cancer Med (Bloomberg News)

FDA Says Ulcer Drugs May Raise Diarrhea Risk (Reuters)

Apotex Pays $444M To Settle Plavix Litigation (Financial Times)

Roche Digs In For Long Fight As Illumina Rejects $5.7B Bid (Reuters)

Merck Bloodthinner Shows Bleeding Risk In Study (Associated Press)

Sanofi Sees 12 Percent Profit Drug From Generic Rivals In 2012 (Pharma Times)

Roche Breast Cancer Drug Gets FDA Priority Review (Reuters)

Pfizer Grapples With Superfund Site (Bridgewater Patch)

Glaxo Pulls Cash Out Of The Eurozone Over Crisis (The Guardian)

Merck Rotavirus Vaccine Not Linked To Bowel Problems In Study (Reuters)

Sanofi Loses Challenge To Generic Lovenox Approval (Bloomberg News)

Australia May Limit Chemical Supplies To Stop Terrorism (InPharma Technologist)

FDA Approves Sanofi Prescription Shampoo For Lice (Associated Press)

Judge Certifies Lawsuit Against Bayer Over Vitamin Claims (Nutra Ingredients)

Pfizer India To Sell Animal Health Unit (Dow Jones)

Uganda Drugmakers Starts Making AIDS Medicine (New Vision)

India And EU Free Trade Deal Hits A Roadblock (Live Mint)

EDITOR’S NOTE: Please check this post for updates throughout the morning

Fifteen years after the FDA greatly expanded direct-to-consumer advertising, the agency is proposing new rules that would require drugmakers to limit the happy-go-lucky images that - sometimes, incongruously - are used to promote meds for extremely serious and sobering illnesses. And, not surprisingly, the agency may revise current rules so side effect info is easier to digest.

The FDA proposed the change two years ago and then conducted a ‘Distraction Study,’ in which 75-second ads for a fictitious blood-pressure drug called Zintria were shown to 2,134 adults over the age of 40, half of whom were diagnosed with the affliction. The agency examined the presence or absence of superimposed text, the emotional (or affective) tone of visual images and the consistency of the visual images with the risk information.

How was this presented? Some participants heard a laundry list of side effects while watching images that were mildly positive, such as metal arches, colorful chairs and a stack of smooth rocks. But others got to see strongly positive images, such as a toddler frolicking with puppies, a baby’s hand and young girls at the beach. Some, but not all, side effects were displayed in superimposed.

Then, the participants were asked whether images that were obviously positive - or upbeat - in tone affected their ability to comprehend risks associated with the medication, and if the positive images influenced how they felt about the drug. The FDA also wanted to know if side effect info that appeared in text and was super-imposed over the images altered their perception.

What did the FDA ultimately find? The tone of the visuals influenced the affect that Zintria could have, but not the understanding of risk. And visual consistency influenced the comprehension of benefits, but again, not the ability to understand side effect risks. Put another way, everyone understood the risk info, but those who saw the positive images viewed the drug more favorably.

“The study demonstrated that reinforcing audio-delivered risk information with consistent text during the major statement of an advertisement improves consumers’ risk comprehension and does not impede their comprehension of benefit,” the FDA wrote in a summary of the study last June (here is the study slide show and this is the summary). Major statement, by the way, refers to most important risk info.

Now, the FDA is seeking public comment on plans to implement standards for “clear, conspicuous and neutral” ads. The agency wants info that is presented in readily understandable language; audio info that is presented with appropriate volume, articulation and pacing; text that appears against a contrasting background for a sufficient amount of time and in a size and font style that can be easily read; and ads that do not include distracting representations (read more here).

Of course, drugmakers have regularly relied on feel-good - and sometimes, edgy - images to promote meds for serious ailments. Anyone remember the 2004 television ad for Viagra in which a man grew devil horns while walking past a lingerie store? The ads have also spawned countless spoofs, but what do you think?

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As the US Supreme Court gets ready to review the contentious debate about overtime pay for sales reps, the US Solicitor General has filed an amicus curiae, or friend of the court brief, and sided with pharma reps. The move is not surprising, given that the US Department of Labor has, several times, taken a similar step in federal courts around the country where cases were heard.

The review is expected to have far-reaching implications for the pharmaceutical industry, which has been fighting a growing number of cases nationwide over the past several years, but has had mixed results as the issue has continually divided the courts. At the same time, drugmakers have been laying off thousands of sales reps as they try to cut costs and alter their business models.

At issue is whether reps are exempt from overtime provisions of the Fair Labor Standards Act. The FLSA overtime compensation requirement does not apply to employees who work as outside salespeople, but the law does require employers to pay overtime for hours worked beyond 40 hours a week, unless a FLSA exemption applies.

What are those exemptions? If an employee’s primary duty is to obtain orders or contracts (as defined by the statute) and regularly does so away from the employer’s place of business. Drugmakers argue their reps are outside salespeople who close sales because the primary customer is the physician.

However, reps have argued that a direct sale doesn’t occur because medicines are actually purchased by patients and hospitals, which receive the drugs from wholesalers. The Supreme Court will review a case involving two GlaxoSmithKline reps Michael Christopher and Frank Buchanan, whose bid for overtime pay was denied last year by a federal appeals court. Arguments are scheduled for April 16.

In its brief, the Solicitor General maintains that “the FLSA’s ‘outside salesman’ exemption applies to employees who sell goods or services, not to employees who promote goods or services in order to facilitate sales by others.” The Solicitor General also maintains that the Supreme Court should give “judicial deference” to the interpretation of federal law by a federal agency (read the brief).

“We feel gratified that the United States Government has joined the reps in advocating that the outside sales exemption did not apply,” Eric Kingsley, an attorney for the Glaxo reps, tells us. “The Department of Labor, and now the Solicitor General has seen that the 9th Circuit ignored the proper degree of deference to give an agency interpreting its own regulations… We feel confident the Supreme Court will reverse this case.”

Just two weeks ago, Novartis agreed to a $99 million settlement after a different federal appeals court ruled that its sales reps are not exempt from overtime provisions of the Fair Labor Standards Act and, therefore, should be paid overtime (back story). This was the first time that a drugmaker had reached a settlement.

The US Solicitor General, by the way, was not the only one to file an amicus curaie with the Supreme Court this week. Two prominent physicians - Greg Curfman, who is the executive editor of The New England Journal of Medicine, and Howard Brody, who is the director for the Institute for Medical Humanities at the University of Texas Medical Branch - also filed a brief in support of the reps.

In their filing, they argue that “the decision to prescribe a drug incorporates a number of principal and controlling factors that leave little room for input from (reps). Physician prescribing decisions are governed by ethical considerations, the nature of which prohibits doctors from becoming mere buyers in a drug sales transaction.” They also maintain that “the medical profession has been pushing back against a sales transaction model of physicians’ interactions” with sales reps (read the brief here).

And two former sales reps - Dana Higgs, who worked at Pfizer, and Eugene Kuzinski, who worked at Schering-Plough, also filed a brief in which they say that the responsibilities and background of reps have changed substantially over the past half century; legislative and regulatory actions forced some of those changes; drugmakers have changed the role of sales reps as part of the voluntary industry code and often describe details in regulatory filings. They also maintain that employees in other industries with “similar promotional duties” will be hurt if pharma sales reps are denied overtime pay.

“When I first started, I was one of the few reps that weren’t pharmacists. There were a lot of reps who were pharmacists. And I had a business degree. Now, the reps don’t have business degrees, don’t have pharmacy degrees. Most of them, you know, they can have anything. They can have a degree in physical education and the doctors don’t feel, in general, rely upon the expertise of a drug rep,” Higgs states in the brief (read here).

“We aren’t considered someone that they value for information so much, you know, because the way that we present is not the way we used to before… But it’s not that way anymore. Now its, ‘this is the paragraph you’re going to read. You’re going to go in and your going to tell him this paragraph.’ And it’s going to be the same paragraph the rep before you read, and the rep before him.”

They say that beauty is in the eye of the beholder, but what about value? The same concept, of course, holds true. Take medicines. Drugmakers are scrambling to justify the worth of their medications to a variety of different groups, but not everyone agrees on value. As with so much else, perception depends on your station in life.

For instance, a new survey finds drastically different notions of value when decision makers at big pharma, health insurers, regulators, government payers, generic makers and service providers were asked about the extent to which improved efficacy, patient outcomes, unmet medical needs, comparative costs and quality of life would contribute to assessing value over the next three years.

For instance, 70 percent of regulators pointed to improved quality of life, while only 26 percent of biopharma execs say this offered value. Meanwhile, 42 percent of government payers cited patient longevity, but only 17 percent of drugmakers did the same, according to the survey, which was conducted for Quintiles, the contract research organization, and queried 399 senior execs.

When asked if improved efficacy over an existing product would increase value, 49 percent of biopharma execs said yes, compared with 19 percent of government payers and 26 percent of regulators. Meanwhile, 36 percent of drugmakers pointed to a medication that meets an unmet medical need as justifying value, but only 21 percent of health insurers responded similarly.

Overall, the survey found that, for drugmakers, the biggest barriers in demonstrating value are the differences in the understanding of the term. For instance, 56 percent of biopharma execs responded that different stakeholder groups assign different meanings to value and 36 percent reported that value varied depending upon medical condition.

“A significant gap in understanding between payers and the industry still exists. I don’t think it will close. To some extent it is natural and healthy, but it is, alas, a consequence of being in a fundamentally different business with different incentives,” says Adrian Thomas, vice president for Market Access at the Janssen unit of Johnson & Johnson, who was interviewed for the survey.

Not surprisingly, the survey found that 64 percent of the respondents from biopharma, generic makers and service providers say that demonstrating value is a significant challenge and, as a result, 85 percent have made at least one change to their business model - 82 percent altered R&D strategy and 78 percent monkeyed with their commercial strategy.

Meanwhile, only 56 percent of all respondents are confident or very confident that pharma will develop meds with more value than existing drugs in the next three years. And only 39 percent believe that pharma is more than just somewhat effective at creating such drugs. This sobering finding falls to 24 percent among those working in clinical development at drugmakers.

So what has pharma tried to demonstrate value? Well, 45 percent of the pharma execs say they have shared more info on new drugs with medical professionals, 33 percent have published different or more complete data on efficacy, 29 percent gathered more extensive info on efficacy once a drug reaches the market, and 27 percent shared more info on new meds with patients and patient groups.

You can read the complete survey here.

sale pic thx to steelcityhobbies on flickr

Good morning, everyone, and nice to see you today. A clear, crisp day is emerging over the Pharmalot corporate campus, where we are engaging in our regular ritual of hustling assorted short people to their school houses. This marathon calls, of course, for a nice cup of stimulation and a bottle of water. We are two-fisted drinkers today. Meanwhile, there is much to be done. So let us begin. Here are some tidbits to start the day. Hope yours goes well and stay in touch…

Glaxo Insists R&D Returns Will Continue To Rise (Reuters)

Pfizer And Ranbaxy Sued For Anti-Competitive Lipitor Scheme (Bloomberg News)

Dogs May Hold Clues To Cures For Cancer (Wall Street Journal)

HIV Drugs Not Linked To Child Psychiatric Problems (Reuters)

Glaxo Halts Trials For Urinary Tract Infection Antibiotic (Pharma Times)

US DEA Raids Two Pharmacies In Drug Abuse Probe (Reuters)

Glaxo Earmarks $60M For Australian Plant (InPharm)

Merck Will Seek FDA OK For Insomnia Drug (Dow Jones)

Grocery Trade Group Criticizes Express Scripts-Medco Deal (Reuters)

Pfizer Breast Cancer Med Worsens Bone Loss In Older Women (Bloomberg News)

Daiichi Sankyo Eyes Acquiring Three Drugmakers (Economic Times)

For the past few years, an effort has been under way by a pair of academics to retract a study about the Paxil antidepressant in the Journal of the American Academy of Child and Adolescent Psychiatry that concluded the GlaxoSmithKline pill was “generally well tolerated and effective for major depression in adolescents.” Why? Since then, the 2001 paper has been discredited amid charges that primary and secondary outcomes were conflated, selective results were reported and ghostwriting was involved (see this).

The details became known more three years ago as documents emerged from investigations (look here) and lawsuits charging Glaxo hid various risks. By then, the FDA required Glaxo to place a Black Box warning about suicidality in youngsters and UK regulators recommended the drug not be given to those under 18 years of age. But by 2010, the paper had been cited in more than 200 other articles, many of which continued to point to the study as evidence that Paxil is effective in treating adolescent depression, according to BMJ.

The listed lead author of the paper, which was also known as study 329, was Martin Keller, a psychiatrist at Brown University (pictured to the right; background here). He was also among more than two dozen academics who were investigated by the Senate Finance Committee over alleged failures to properly disclose of federal grants to research drugs at the same time these professors had accepted payments from drugmakers (look here). Consequently, a pair of academics asked the JACAAP to issue a retraction, but were rebuffed. The editor told BMJ the paper does not contain any inaccuracies and negative findings are included in a results table and, as a result, there are no grounds for withdrawal (read here).

And so last October, the same two academics - Jon Jureidini, associate professor of psychiatry at the University of Adelaide, and Leemon McHenry, a lecturer in philosophy at California State University - were joined by two dozen others and wrote to Brown University officials to request that they seek a retraction (read the letter), but they were again rebuffed.

Last month, they received a letter from Ed Wing, who is the dean of the medical school, to say the university would not write the JACAAP to seek a retraction (here is the Wing letter). No explanation was given and he did not respond to a request for comment or The Brown Daily Herald, which first reported the official rejection (see here).

The controversy raised questions about if and when a journal article should be retracted. As BMJ noted in its coverage last year, the Committee on Publication Ethics expanded its own view and recommended retraction if journals “have clear evidence that the findings are unreliable.” The point is to “correct the literature and ensure its integrity” rather than to punish authors (here are the guidlines). And the International Committee of Medical Journal Editors urge retraction in the event of scientific fraud or if an error is “so serious as to vitiate the entire body of work (read here).

The Paxil study also underscored the ongoing dispute over ghostwriting, which has embroiled several drugmakers in scandal. The issue has become so contentious that, several months ago, a pair of University of Toronto academics suggested two legal remedies - pursuing class action lawsuits based on the Racketeer Influenced and Corrupt Organizations Act, or RICO, and filing claims of ‘fraud on the court’ against a drugmaker that uses ghostwritten articles in litigation (read here). And two other academics recently published a paper in which they suggested that all authors should be required to sign a statement guaranteeing that no ghostwriters participated in writing a submitted paper and that all medical writers should be listed as authors on the byline (see this).

However, the failure of universities to investigate instances where their professors may have engaged in ghostwriting has also generated criticism. Last year, Dalhouse University declined to examine allegations of ghostwriting and the involvement of psychiatry professor Stan Kutcher, who was listed as a co-author on Paxil study 329 (read here). “I find it very disturbing that a university that is suppose to be standing up for the highest academic values is unwilling to take any action when its faculty members violate those values,” Joel Lexchin, a professor of health policy at York University in Toronto and one of the academics who signed the letter to Brown University concerning a retraction, writes us.

The Department of Health & Human Services, by the way, was also reluctant to pursue the matter. In a letter last November to Jureidini, John Dahlberg, the director of the Division of Investigation Oversight in the Office of Research Integrity at the HHS, noted that Paxil effectiveness was “apparently exaggerated.” But he went on to say that his office was unable to pursue an investigation due to the statute of limitations.

Due to the statute, “…allegations of falsification, fabrication or plagiarism must be made within six years of the alleged misconduct… Further, given the significant lapse of time between the time the study was conducted and concerns raised, the likelihood of being able to conduct a fair and objective review, given the inevitable difficulties in locating records and relying on memories of events well over 10 years ago, seems remote” (here is the letter). Say Jureidini: “We are a bit stuck about where to take it from here.”

In a ruling that has repercussions for the pharmaceutical industry, the Supreme Court of Canada late last week issued what is being called a landmark ruling on what constitutes a corporate trade secret under the Access to Information Act. The decision involved a decade-old dispute between Merck and Health Canada over the release of information about the Singular asthma drug.

The 6-to-3 decision is seen as a victory for advocates of open government and is expected to stiffen requirements for companies that rely on exemptions to the law in order to block the release of documents they argue contain confidential or sensitive business information, otherwise known as trade secrets, The Globe and Mail notes.

In explaining its ruling, the court determined that Merck Frosst, the Canadian arm of the drugmaker, failed to make a case that certain documents should not have been disclosed. Merck provided manufacturing info and clinical studies as part of the compliance process. The dispute arose, however, when a rival drugmaker sought the info and Health Canada decided the request was not subject to law.

And so the regulator released some info that was not considered confidential or believed to be in the public domain, and would not put Merck at a disadvantage. Then, Health Canada also informed Merck of plans to disclose still more documents, The Vancouver Sun writes. At that point, Merck went to court and won its argument, which Health Canada subsequently appealed and won last week.

The Supreme Court decision, by the way, was also the first time that the court has ruled on the exemptions in the law. And in writing for the majority, Justice Thomas Cromwell made a point of noting that there are implications for the pharmaceutical industry, notably when arguing that, by releasing some documents, the public could have been given an inaccurate perception of drug safety, as Merck had done in bringing its case against Health Canada.

“The courts have often - and rightly - been skeptical about claims that the public misunderstanding of disclosed information will inflict harm on the third party. If taken too far, refusing to disclose for fear of public misunderstanding would undermine the fundamental purpose of access to information legislation. The point is to give the public access to information so that they can evaluate it for themselves, not to protect them from having it. In my view, it would be quite an unusual case in which this sort of claim for exemption could succeed,” he wrote (here is the ruling).

“It is particularly important to allow broad access to this sort of information in the context of the pharmaceutical industry. As the respondent points out, Health Canada systematically posts on its website reports about undesirable effects of all drugs sold in Canada. In addition, the Food and Drug Regulations require pharmaceutical companies to report adverse reactions of their drugs to Health Canada. Information about those reactions is publicly available. It is therefore difficult to see how release of such reports through an access to information request could result in harm to the third party.”

Beset by patent expirations on best sellers and struggling to rebuild its pipeline, Eli Lilly had decided that employees in most countries around the world, including its executive team, will not receive base pay increases this year, according to a filing made late last week with the US Securities and Exchange Commission (see page 38).

At the same time, Lilly ceo John Lechleiter (pictured to the left) requested that he not receive an increase in his $1.5 million base salary or incentives “in light of the business challenges the company faces.” This is the third year in a row he has taken this step. Nonetheless, his bonus target is 140 percent of his base salary (see page 30 of the SEC filing) and his total compensation was valued at $16.4 million (see page 39).

During his tenure, the 58-year-old Lechleiter has tried to adopt a decidedly different posture from some of his peers. Besides his approach toward compensation, he emphasizes his background as a scientist and has repeatedly rejected suggestions that Lilly should solve its pipeline woes by seeking a big merger. Meanwhile, he continues to bet on risky Alzheimer’s meds under development.

Two years ago, Lilly had to halt two studies of its gamma-secretase drug, called semagacestat, after worsening dementia symptoms in late-stage clinical trials. Key study results for another med, called solanezumab, are due by mid year. “If the (Alzheimer’s) opportunity fails, we believe Lilly may be forced to reconsider its business strategies in the next year. On the flip side, a clearly positive outcome for solanezumab would significantly improve Lilly’s long-term growth outlook,” Deutsche Bank analyst Barbara Ryan wrote in an investor note last week.

The urgency behind her prediction was underscored when Lillly last week reported 2012 forecasts that missed analyst estimates and lower-than-expected revenue for its Zyprexa antipsychotic - sales fell faster than forecast due to generic competition. How much lower? Sales for the pill dropped 44 percent in the fourth-quarter to $749.6 million.

Good morning, everyone, and how are you today? Was the weekend relaxing? We hope so. Now, though, the time has come to resume that routine of meetings and deadlines. It never ends, does it? So to cope, yes, are we brewing our mandatory cup of stimulation and invite you to join us. Or grab a bottle of water, if you prefer. This promises to be a busy week so there is no need to tally. Here are some tidbits to get you going. Hope your day goes well and stay in touch…

FDA Skeptical Of Amgen Drug Ahead Of Panel Meeting (The Street)

Orexigen And FDA Agree On Trial Design For Diet Drug (Reuters)

Supermarket Chains Object To Express Scripts-Medco Deal (Reuters)

FDA Wants More Power To Adopt Nationwide ePedigree (InPharma Technologist)

Sanofi Faces Uphill Battle In Multiple Sclerosis Market (Reuters)

Novartis Resumes Shipping Animal Meds Made In Nebraska (Veterinary Practice News)

Glaxo To Reveal Results Of Research Funding Competition (The Telegraph)

Five Years After HPV Vaccine Mandate, Virginia Remains Split (Virginian Pilot)

Allegan To Rely Less On US For Sales (Reuters)

Whistleblower Program Yields Payoffs In Korea (Korea Times)

Venezuela Will Nationalize Companies Over Price Controls (Bloomberg News)

Medicaid Rule Change Could Slash State Rx Bills (Boston Herald)

NY Seniors Struggle After Changes To Rx Program (Ithaca Journal)

DEA Suspends Cardinal Health Facility (Lakeland Ledger)

Poland Halts Ratification Of ACTA (Washington Post)

EDITOR’S NOTE: Please check this post for updates throughout the morning

Coffee pix thx to chichcacha flickr creative commons

In the wake of the massive job cuts proposed by AstraZeneca, a pair of unions in the UK that represent employees at two facilities are vowing to fight the layoffs. The drugmaker, you may recall, announced plans earlier this week to eliminate 7,300 jobs in from facilites in various locations and divisions, including 2,200 from research and development (back story).

“This is a blow to Britain’s R&D base and Unite will be doing everything possible to minimize compulsory redundancies at Alderley Park,” one of two UK facilities that is likely to be effected, Linda McCulloch, Unite national officer, tells The Manchester Evening News. “If the company can afford a 10 per cent hike in its dividends, then it can afford to retain these roles.”

To what extent the unions can succeed is, of course, unclear. But they may be emboldened by events in Switzerland, where Novartis recently agreed to rollback some of the 1,100 layoffs planned at various facilities. After three months of sustained pressure, the drugmaker abandoned plans to close one plant and will eliminate fewer jobs than planned at another. Tax incentives played a part in the reversal (read here).

Protesting job cuts, in fact, has become a recent industry trend. Two weeks ago, Roche employees in Poland demonstrated against hiring practices (read this). And last fall, a coalition of community groups, labor unions and activists held a vigil outside a Pfizer R&D facility in Connecticut to protest decisions to close various operations after receiving government subsidies (look here).

Nonetheless, the AstraZeneca employees face an uphill battle as the drugmaker braces for patent expirations on some of its biggest-selling medicines: the Crestor cholesterol pill, the Nexium acid reflux med and the Seroquel antipsychotic. The drugmaker also warned that profits may fall up to 18 percent this year. At the same time, AstraZeneca will buyback $4.5 billion in stock to appease investors.

The latest cuts, which brings to more than 30,000 jobs spread over three restructurings announced in the last few years, are expected to save $1.6 billion annually by 2014. And while investors dumped AstraZeneca stock after the news was announced, Wall Street likes where the cash is headed. “The (AstraZeneca) board continues to support a ‘progressive’ dividend policy, and we continue to be impressed by its commitment to returning cash to shareholders,” Leerink Swann analyst Seamus Fernandez wrote in a note to investors.

In 2002, the National Institutes of Mental Health finalized a contract with the University of Texas Southwest Medical Center to run a 4,000-patient study of antidepressants at a cost of $35 million. The principal investigator chosen to run the year-long study was John Rush, a controversial figure who, at the time, was the professor and vice chair in the Department of Clinical Services (pictured to the left).

However, a recently unsealed whistleblower lawsuit charges that Rush, who is now the vice dean for clinical services at Duke-NUS Graduate Medical School Singapore (see this), also had financial ties to Forest Laboratories, which sells the Celexa antidepressant (see here). And as a result, he allegedly designed the protocol to favor Forest and received kickbacks, according to the lawsuit, which was filed by psychologist H. Edmund Pigott.

Pigott has previously published papers claiming the comparative study, which was called STAR*D, was biased (read this and this). And his lawsuit claims the conflict of interest was the reason that Celexa was chosen as the only antidepressant used in the first part of the study, which gave Forest a significant marketing advantage and led to increased sales.

Moreover, he also alleges that the study was falsified and overstated the effectiveness of the Forest drug, which he maintains should prompt regulators and the medical community to conduct a reevaluation of the use of antidepressants for treating depression. And he charges that the study results prompted state and federal healthcare programs to overpay for Celexa.

In his lawsuit, Pigott notes Celexa was supposedly chosen as the first antidepressant given to patients because the pill was prescribed less often than similar drugs, which meant patients would have had less exposure to the Forest pill. Another rationale was that Celexa caused fewer discontinuation symptoms, which meant switching to another drug later in the trial would not be as problematic. And Celexa presumably caused fewer interactions with other drugs.

However, Pigott argues that such logic used to justify the protocol was unfounded. In his view, if Celexa was scientifically superior, doctors would have prescribed the pill more often. But by choosing the Forest drug as the only antidepressant in the first part of the study, Forest would benefit as long as success rates were the same or better than previously documented trials, the lawsuit maintains.

Meanwhile, Pigott goes on to argue that published STAR*D results that were positive and supported the effectiveness of antidepresssants, only 108 of the 4,041 patients, or 2.7 percent, had an acute-care remission and neither relapsed nor dropped out during the 12 months of continuing care that followed. He also cites his own paper in which he maintains that STAR*D changed outcome measures and analyses, and inflated the Celexa remission rates by 44.9 percent.

Finally, Pigott notes that four years after STAR*D findings were published, along with more than 70 peer-reviewed articles about the results, none of the articles published by the STAR*D authors have reported outcomes of any of the 12 pre-specified measures of the study. Other STAR*D researchers, by the way, also had alleged ties to Forest, according to the lawsuit (which you can read here).

Forest, you may recall, pleaded guilty to obstruction of justice, distributing an unapproved drug and illegally promoting two other meds, including Celexa, in 2010. The drugmaker paid $313 million, which included $164 in criminal penalties (back story with the plea agreement can be read here). Forest was charged with promoting Celexa for pediatric use, when the drug was approved only for adults.

We have asked both Forest Labs and Rush for a response and will update you accordingly. [UPDATE: A Forest Labs spokeswoman sends us this statement: "These claims are meritless. STAR*D was an NIMH-sponsored study involving a number of prominent researchers. We note that the federal government and the states have reviewed the plaintiff's claims and elected not to intervene in the lawsuit." END OF UPDATE]

As for Rush, he was cited by US Senator Chuck Grassley during a probe of academics who received NIH grants to study medicines while simultaneously failing to properly disclose financial ties to the drugmakers that sold those same medications. One such relationship involved Eli Lilly (you can read more here). Shortly after the disclosure, Rush left for Singapore (see this).

Rush also once headed a controversial program called TMAP, or Texas Medication Algorithm Project, which was allegedly orchestrated by Johnson & Johnson to boost the use of its Risperdal antipsychotic in the public sector throughout the country. TMAP relied on various state officials and academics to develop and sell the program as a policy tool, according to a recently settled lawsuit (read here and here).