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$5.4M Paid to Settle Drug Cover-up Claims

(AP) Drugmakers Merck & Co. and Schering-Plough Corp. said Wednesday they will pay $5.4 million to settle civil claims that the companies covered up test results that cast doubt on the effectiveness of two blockbuster cholesterol drugs.

The companies settled with attorneys general from 35 states and the District of Columbia. The investigation centered on claims the companies kept the results from unfavorable studies quiet, violating consumer protection laws. Merck, Whitehouse Station, N.J., and Schering-Plough, Kenilworth, N.J., will pay back the costs of the investigation, but don't have to make other payments or admit wrongdoing or liability.

In January 2008, the companies released studies showing Vytorin and Zetia, sold by the Merck/Schering-Plough Pharmaceuticals joint venture, were not more effective than an older drug at reducing plaque buildup in the blood vessels of the neck. The testing was finished in 2006 and the companies faced criticism for not releasing the results sooner.

The testing compared Zetia and Vytorin to Zocor, a drug that is one of Vytorin's ingredients. Zocor is now available as a low-cost generic drug. Later studies raised additional concerns about safety and effectiveness.

Kentucky Attorney General Jack Conway said the companies agreed to get advance FDA approval for all TV advertisements aimed at consumers and comply with FDA suggestions to modify that advertising. Additionally, the companies will register clinical trials and report results and agreed to comply with rules barring the deceptive use of those trials, avoid ghost writing of articles by physicians, and reduce conflicts of interest on boards monitoring clinical trials.

The state of Kentucky will receive $100,000 in the settlement.

Merck and Schering-Plough said they will continue to comply with laws requiring the truthful and non-misleading marketing of their drugs.

The 35 states involved in the settlement are Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, and Wisconsin.

Merck is in the process of buying Schering-Plough for $41.1 billion. In afternoon trading, Merck shares rose 33 cents to $27.49. Schering-Plough stock added 26 cents to $25.18.

http://www.cbsnews.com/stories/2009/07/15/health/main5162126.shtml

EU probes firms over drug delays

The European Commission says it has launched anti-trust investigations into drugs firms over costly delays in introducing cheaper generic drugs.

Among them is the French pharmaceutical firm Servier, suspected of colluding with several makers of generic drugs.

The Commission says it has found a gap of more than seven months between patents expiring and the appearance of generic drugs on the market.

The delays push up healthcare costs in the EU, the Commission says.

“We must have more competition and less red tape in pharmaceuticals,” EU Competition Commissioner Neelie Kroes said on Wednesday.

Her team has produced a report on generic medicines, which says drugs firms are using “a variety of instruments to extend the commercial life of their products without generic entry for as long as possible”.

The Commission says the delays matter because generic drugs are generally 40% cheaper, two years after market entry, than the original patented drugs.

Plea for EU patents

Drugs firms defend their actions by pointing to their considerable investments in research and development - necessary to test the reliability of new drugs.

France's Servier makes the cardiovascular medicine perindopril. The commission suspects it struck a deal with several generics firms: Krka, Lupin, Matrix, Niche Generics and Teva.

The EU report also stressed “an urgent need” for an EU-wide patent system and “unified specialised patent litigation” in Europe.

It criticised the wasteful duplication of patent court cases in EU member states, noting that in 11% of such cases national courts “reach conflicting judgements”.

Generic drug companies - which sell cheaper versions of drugs once the patent has expired - have long complained that it is difficult to get their drugs to market in Europe.

The Commission can impose large fines on drug companies if they engage in anti-competitive practices.

In 2005, AstraZeneca was fined 60m euros for blocking cheaper rivals to Losec, its heartburn and ulcer pill.

The Commission says it is also examining why there is “a decline of novel medicines reaching the market”.

The British Generic Manufacturers Association (BGMA) welcomed the EU findings, saying the delays “increase NHS [National Health Service] costs without any benefit to patients and limit access to medicines”.

Generics account for 64% of all medicines dispensed by the NHS, yet they cost only 29% of the NHS drugs bill, the BGMA says.

The average cost to the NHS of a generic drug is £4.62 (5.3 euros; $7.5), compared with £20 for a branded medicine, the BGMA adds.

http://news.bbc.co.uk/2/hi/europe/8141076.stm

Japan approves first generic biotech drug

Reuters - Japanese regulators approved a human growth hormone from Novartis AG, the first green light in Japan for a biosimilar or generic version of a biotech drug, the Swiss drugmaker said on Thursday.

Biosimilars are viewed as a promising new market, given the pent-up demand for cheaper versions of extremely expensive biotech drugs, some of which are coming to the end of their patent life.

Somatropin, made by Novartis' generics unit Sandoz, is for treatment of growth hormone deficiency in children and growth disturbance associated with Turner's syndrome or chronic renal insufficiency, the group said.

The approval is for the same range of diseases as the reference product, Pfizer Inc's Genotropin, Novartis said. The drug is already approved in Europe and the United States as Omnitrope.

Biotech drugs, used to treat everything from cancer to autoimmune diseases such as rheumatoid arthritis, tend to be more expensive and complex than traditional chemical medicines because they are made from living cells.

Conventional drugs can lose up to 90 percent of their sales within a year once they face generic competition. But relatively few companies are now capable of making biosimilars.

Brand-name biotech companies such as Roche Holding AG's Genentech Inc and Amgen Inc say they need an adequate period without competition to encourage development of new medicines.

Novartis shares fell 1.0 percent to 45.04 Swiss francs by 0827 GMT (4:27 a.m. EDT), in line with the DJ Stoxx European healthcare index.

The first biosimilars have already been approved and are on the market in Europe. The United States, the world's biggest and most lucrative pharmaceuticals market, is still discussing a regulatory pathway for follow-on biotech treatments.

Drugs industry supplier Lonza Group Ltd believes it is tough to predict the size of the market because of uncertainty of how regulations will end up, its chief executive Stefan Borgas said earlier this month.

“I think common wisdom at the moment is that the global biologics market is something like $80-90 billion, and what the price reduction will be is a bit of a crystal ball discussion at the moment,” Borgas told Reuters.

“Even if the most optimistic forecast is too optimistic, it will be a significant market. In the billions and the 10s of billions.”

(Editing by Mike Nesbit and David Holmes)

Drug deals cost U.S. consumers $3.5 bln a year: FTC

Reuters - Consumers, insurance companies and the federal government spend an extra $3.5 billion for prescription drugs every year because brand-name companies pay generic producers to stay out of the market, the head of the U.S. Federal Trade Commission said on Tuesday.

FTC chief Jon Leibowitz urged Congress to pass legislation, now pending in the U.S. Congress that would ban deals in which brand-name drug makers pay generic companies to delay production of cheaper versions of popular drugs.

“Eliminating these deals is one of the Federal Trade Commission's highest priorities,” Leibowitz said at the Center for American Progress, a think tank.

While a member of the U.S. Senate, President Barack Obama co-sponsored an earlier version of the legislation.

The FTC estimated that the federal government pays about one-third of all prescription drug costs, so eliminating “pay for delay” settlements would save the government $1.2 billion annually.

The FTC has challenged the deals in court, saying patent settlements were sometimes used to disguise payoffs that kept generic versions of drugs off the market. The agency has had mixed results in the courts.

The first known “pay for delay” was in 1994 when Bristol-Myers Squibb Co paid $290 million to Schein Pharmaceutical to delay the sale of a generic version of Bristol's anxiety drug Buspar.

The FTC has calculated that consumers could save even more if generic companies were allowed to make copies of expensive biotechnology drugs, something the U.S. Food and Drug Administration does not now allow.

(Reporting by Julie Vorman and Diane Bartz; editing by John Wallace)

U.S. lawmakers tussle over generic biologic drugs

Reuters - U.S. lawmakers tussled on Thursday over how long makers of biotechnology drugs should have an exclusive license for the expensive medicines in a hearing called to discuss a Federal Trade Commission report on the issue.

The FTC, which specializes in antitrust and consumer welfare, had concluded that passing a law allowing generic medicines for biotechnology drugs would create some savings for consumers but not the huge amounts that patients save by buying generic versions of some antibiotics and other, simpler drugs.

Democratic Representative Henry Waxman, who sponsored the original legislation creating generic drugs and is sponsoring a bill to allow five years of exclusivity for original biotech products, took issue with drug industry arguments for longer periods without competition.

“The drug industry has been engaged in a massive and expensive lobbying campaign to convince the members of this committee that the supply of life-saving drugs will dry up if they don't get triple the monopoly protection available to all other drugs,” said Waxman, chairman of the Committee on Energy and Commerce.

He told the committee's health subcommittee that he had seen “little or no persuasive evidence” to support industry claims that biotech companies need 12 to 14 years of exclusivity to break even.

Representative Anna Eshoo, a Democrat, disagreed and objected to the hearing for failing to bring scientific experts in to discuss the safety and effectiveness of the generics. “I'm puzzled and somewhat disappointed by the subcommittee's approach,” said Eshoo, who was honored last July as the Biotechnology Industry Organization legislator of the year,

Biologic drugs — which are usually injectable — tend to be more complicated than traditional chemical medicines because they are made from living cells. Their generic versions will require a more complicated approval pathway than simpler chemical-based drugs.

Biologic medicines are used to treat everything from cancer to autoimmune diseases such as rheumatoid arthritis.

Representatives Marsha Blackburn, a Republican, and Tammy Baldwin, Democrat, expressed concern that the biotechnology companies in their districts would be unable to recoup the millions they invested in developing the complex drugs if generic versions came to market too soon.

“I will tell you I am very concerned about protecting the intellectual property of that industry,” said Blackburn.

Brand-name biotech companies such as Roche Holding's Genentech Inc and Amgen Inc say they need an adequate period without competition to encourage development of new medicines.

The generic drug industry is eager to begin producing cheaper copies of the medicines.

The FTC report, which the pharmaceutical groups roundly criticized, concluded that competitors would likely enter the market only for drugs that had more than $250 million of annual sales, and only two to three generic entrants would be expected for each drug.

This means prices would likely drop just 10 to 30 percent while the first manufacturers would likely retain 70 to 90 percent of their market share, the FTC said.

(Reporting by Diane Bartz; Editing by Steve Orlofsky)