So-called pay-for-delay settlements involving generic and branded drug makers are becoming more common and costing consumers $3.5 billion each year, according to FTC Chairman John Liebowitz, who testified before Congress that he wanted to eliminate such agreements altogether.

These deals allow branded drug makers to sell their expensive products without generic competition for a period longer than the duration of the patents they hold on their drugs.

In the first 9 months of fiscal 2010, drug makers entered into 21 patent litigation settlements.  That’s more than the entire previous year.

“That’s almost an epidemic,” Leibowitz told BurrillReport. “Every single FTC Commissioner, going back through the Bush and Clinton administrations, has supported stopping these unconscionable agreements.”

The FTC supports legislation designed to halt pay-for-delay settlements. At the moment, this legislation is tucked into a Senate spending bill.

Both branded and generic drug companies would prefer to leave things just as they are. “The FTC’s testimony fails to present the whole story regarding patent settlements,” according to a statement released by the Generic Pharmaceutical Association. “Over the past 10 years, patent settlements have enabled dozens of first-time generics to come to market many months before patents on the counterpart brand drugs expired.”

The Pharmaceutical Research and Manufacturers of America, which represents branded drug makers, agreed. “A blanket ban could decrease the value of patents, remove an important option for a patent-holder’s defense of intellectual property, and reduce the incentives for future innovation of new medicines,” it said.

A Senate panel has already recommended banning pay-for-delay deals, but narrowly. Pennsylvania Democrat Arlen Specter introduced an amendment to remove the ban from the spending bill, but that amendment did not pass. The ban must pass the full Senate and House before becoming law.

An FDA advisory panel has voted to allow ongoing sales of the diabetes drug Avandia despite the fact that Glaxo’s former blockbuster poses a “significant safety” concern by increasing the risk of cardiovascular events.

The FDA is not required to follow the recommendations of its panels, although it usually does.

Nearly one-third of the 33-member panel voted to ban Avandia. Most panelists who voted to keep the drug on the market called for increased restrictions on its use, and said it should be used only as a second- or third-line drug for the treatment of diabetes.

For example, David Oakes, a statistics professor at the University of Rochester, told the Wall Street Journal that his vote for continued sales of Avandia should not be construed a “vote of confidence,” but rather that he was concerned about the quality of studies which link Avandia to heart attack risk.

Janet Woodcock, who heads-up the FDA’s drug division, said her agency will decide on the matter within the next few weeks.

Avandia sales have plummeted since a 2007 article in the New England Journal of Medicine reported a 43% bump in heart attack risk with the drug. Q1, 2010 world-wide sales of Avandia were reported to be $245 million, off 10% year-over-year.

The FDA panel also concluded that Avandia posed a greater heart attack risk than Actos, a rival drug made by Takeda. Both drugs were approved in 1999 for blood-glucose control in patients with Type 2 diabetes.

In the wake of the panel’s announcement, Glaxo’s Chief Medical Officer Ellen Strahlman defended the safety record of Avandia. She said the drug would remain on the market pending the FDA’s decision.

In an innovative effort to find new uses for existing drugs, pharmaceutical giant Pfizer has struck a deal with the Washington University School of Medicine enabling the University’s scientists to access information regarding over 500 pharmaceutical compounds in Pfizer’s archives.

The 5-year agreement also calls for Pfizer to contribute $22.5 million to the University. Proprietary information will be shared for drugs that are currently on the market and those that failed during  testing. The deal is believed to be the first of its kind in the industry.

The parties expect the partnership can reduce the time-to-market for drugs that are found to have new applications, because the time consuming, pre-clinical (safety) studies have already been performed on these compounds.

“There are two realities in drug discovery,” Don Frail told BurrillReport. The chief scientific officer of Pfizer’s Indications Discovery Unit explained that “the majority of candidates tested in development do not give the desired result, yet those drugs that do succeed typically have multiple uses. By harnessing the expertise at this academic medical center, the collaboration seeks to discover new uses for these compounds in areas of patient need that might otherwise be left undiscovered.”

To foster collaboration, Pfizer developed a web portal that permits Washington University scientists to access clinical and preclinical data regarding Pfizer’s proprietary compounds. An oversight committee composed of scientists from both organizations will evaluate research proposals that have been co-authored by researchers from the University and Pfizer.

Pfizer’s Indications Discovery Unit will move its laboratories closer to the Washington University campus to further promote idea exchange.

“This is a tremendous opportunity for both partners,” Jeffrey Gordon, director of the University’s Center for Genome Sciences told Burrill. “It leverages the complementary strengths and interests of both Washington University and Pfizer.”

Generic drugs saved the US health system $734 billion between 1999 and 2008. These low-cost alternatives to brand-name drugs account for 75% of all prescriptions filled in the US, a massive increase from the 47% share they held 10 years ago.

Teva, an Israeli company many have never heard of, is the 800 pound gorilla of generic drug makers. Last year, Teva products were used to fill 630 million prescriptions, or one out of every 6 prescriptions in the US. That’s more than Pfizer, Novartis and Merck combined.

Between 1999 and 2009, Teva’s revenues grew from $1.3 billion to $14 billion and its profits rose from $2 million to $135.5 million. Its market cap is now about $53 billion.

Generic companies like Teva can be profitable at lower price-points than pharmaceutical companies, because they don’t have to develop a medication from scratch. Instead, they use the active ingredients major pharmaceutical concerns have already created after their patent protections expire.

Teva entered the US market in 1985, shortly after Congress passed the Hatch-Waxman Act, which expedited federal approval for generic drugs.

Teva’s biggest challenge is maintaining quality control as it grows. Recently for example, the FDA called-out Teva for “serious manufacturing violations” at a facility in Irvine, California.

The issue was bacterial contamination in a generic form of propofol, the intravenous anesthetic made famous by Michael Jackson. Teva recalled thousands of vials of propofol, but officials indicated they weren’t sure the problem wouldn’t recur.

“Can they keep their finger on the pulse of every single smaller company they acquire, every generic maker and ingredient supplier?” Joe Graedon, the co-founder of a drug information Web site asked the New York Times. “We have seen missteps over the last few months.”

The jury in a Boston-based US District court case has found that Pfizer, the world’s largest drug maker, violated federal antiracketeering laws by promoting Neurontin for off-label uses. Neurontin is FDA-approved for the treatment of epilepsy, but the jury found Pfizer guilty of marketing it for migraine headaches and bipolar disorder.

The jury set damages at $47 million. This amount is tripled under the Racketeer Influenced and Corrupt Organizations Act, meaning that Pfizer must pay damages equaling $141 million.

The case was brought by Kaiser Foundation Health Plan and Kaiser Foundation Hospitals. Kaiser alleged that it overpaid for Neurontin as a result of Pfizer’s illegal marketing tactics.

Physicians are free to prescribe drugs for non-FDA approved uses, but drug makers cannot market their products for such purposes.

Kaiser said in a statement that “that justice has been achieved for our members and the physicians, pharmacists and staff who care for them.”

Pfizer claimed that Neurontin did work in some cases, and that Kaiser still allows its physicians to prescribe the drug off-label. “We are disappointed with the verdict and will pursue… an appeal,” said Pfizer spokesman Christopher Loder.

In an unrelated case in 2004, Pfizer plead guilty to similar charges and agreed to pay $430 million to settle the matter.

Two years ago, unsealed documents from yet another case revealed that Pfizer executives suppressed the results of a 1999 trial showing that Neurontin didn’t work for chronic nerve pain at the same time the company was promoting the drug for that purpose.

Pfizer’s Neurontin marketing campaign transformed the underperforming epilepsy drug into a $2 billion per year blockbuster before generic versions became available in 2004.

Men who buy erectile dysfunction drugs on the Internet risk ingesting hazardous contents and may miss out on treatment for associated conditions like cardiac disease and high blood pressure, according to a study in the International Journal of Clinical Practice.

To reach these conclusions, Graham Jackson and colleagues reviewed more than 50 studies of Internet drug purchasing behavior that had been published between 1995 and 2009.

ED drugs were the most commonly counterfeited product purchased over the Internet, presumably because of their high cost and the stigma associated with the underlying condition.  As many as 2.5 million men are using counterfeit Viagra in the European Union alone, according Jackson’s group.

As many as 2.3 million ED drugs are orderred online each month worldwide, and most of them are secured without a prescription. Approximately 44% of the Viagra purchased on line is counterfeit.

Counterfeit forms of other drugs are a problem as well, Jackson’s group found. In Argentina for example, 2 pregnant women died after receiving injections of a bogus iron preparation, and 51 children died of kidney failure in Bangladesh after swallowing a Tylenol-like syrup laced with antifreeze.

Jackson’s study also revealed examples of counterfeit contraceptives, antimalarials and antibiotics.

Global sales of counterfeit drugs will reach $75 billion this year, according to the Center for Medicine in the Public Interest. That’s up 92% in just 5 years. Nearly 90% of the bogus elixirs are sold on the Internet.

“In some cases producing counterfeit medicine can be 10 times as profitable per kilogram as heroin, yet in the UK someone can face greater legal sanctions if they produce a counterfeit T-shirt,” Jackson, a London cardiologist told BurrillReport.

 “What is clear is that we need much greater public awareness of the risks of buying counterfeit drugs, as lives are at risk.”

Billy Tauzin, Big Pharma’s top lobbyist,  is calling it quits amid growing uncertainty regarding the national effort to reform health care, an effort he supported.

Tauzin reigned for 5 years as president of the Pharmaceutical Research and Manufacturers of America.

Last June, he bet health reform would happen and decided to cozy-up to the Democrats.

In particular, he cut a deal in which drug makers agreed to contribute $80 billion in savings over 10 years by reducing the prices of certain drugs and closing the “donut-hole” coverage gap for Medicare beneficiaries.

Soon after that, the Big O stopped advocating for the importation of cheap drugs from Canada and stopped saying the feds should negotiate Medicare drug prices directly with drug makers. He had held these positions during the presidential campaign.

The Democrats’ health reform bill also guaranteed 12 years of sales exclusivity for BioTech drugs, which is longer than many Democrats and the generic industry preferred.

Of course, all this is in limbo right now.

Tauzin’s deals with the Obama administration drew fire from business representatives and Republicans. Notably, House minority leader John Boehner called his White House deal a “short-sighted” bargain with “Big Government.”

According to Thomas Donohue, president of the Chamber of Commerce, Tauzin improved his industry’s image during his reign. When he took over, Big Pharma was reeling from drug recalls and problems with popular drugs linked to death, diseases and suicide. “Billy stabilized the drug industry,” Donohue told the Wall Street Journal.

Tauzin, a former congressman from Louisiana, collected a $2 million salary from PhRMA. His last day is June 30.

An expert panel has advised the Food and Drug Administration to green light Crestor, AstraZeneca’s cholesterol-buster, for a wider role in the prevention of cardiovascular disease. FDA acceptance of the panel’s recommendations could markedly increase utilization of Crestor and drugs like it.

The recommendation follows release of data from the so-called Jupiter trial, which was sponsored by AZ. In Jupiter, Crestor reduced the risk of heart attacks in apparently healthy adults with no prior history of cardiac disease and normal cholesterol levels.

Participants in Jupiter did have elevated levels of C-reactive protein (CRP), a non-specific marker for inflammation that identifies people at risk for cardiac events regardless of their cholesterol levels.

Jupiter participants who took Crestor experienced a 54% reduction in the risk of heart attack and a 48% reduction in the risk of stroke. They were 46% less likely to require angioplasty or coronary bypass surgery and had 20% lower mortality from all causes.

In reaching its decision, the expert panel noted that Crestor patients developed diabetes at a higher rate than the placebo group, and experienced more deaths due to GI disease and more episodes of mental confusion. But the panel felt these events were due to chance rather than Crestor itself.

AZ wants the FDA to authorize a discussion of the Jupiter study on Crestor’s label, since this would permit the company to market Crestor to a much wider patient population.

Crestor already generates $3.6 billion in annual revenues for AZ, which is good for 9% of the US market. Pfizer’s Lipitor (27%) and generic statins (49%) have the lion’s share of this market.

Both Lipitor and the generic simvastatin have been shown to lower CRP levels. It is estimated that the label modifications would apply to about 6 million US patients.

Sanofi-Aventis has announced plans to acquire Chattem, maker of popular consumer products like Icy Hot pain reliever and Selsun Blue dandruff shampoo.

The $1.9 billion buy would be the second consumer-focused company purchased by the Paris-based drug giant in less than a year. The other one was France’s Laboratoire Oenobiol, which makes health and beauty supplements and nutritional products.

The moves should help Sanofi diversify beyond prescription drug revenue, which seems like a good idea since its 4 big drugs, Lovenox, Plavix, Ambien CR and Eloxatine will all face generic competition soon.

To accelerate its move into consumer health, Sanofi plans to release an OTC version of Allegra, its allergy drug, which has begun losing market share to Teva’s generic competitor. 
 
Even before the acquisition of Chattem and with little presence in the US consumer products market, Sanofi  managed to generate about $2 billion per year in world-wide OTC sales.
 
“The acquisition of Chattem (gives us) the ideal platform in the US consumer healthcare market,” Chris Viehbacher, CEO of Sanofi told BurrillReport. “Our ability to convert prescription medicines to OTC products will be enhanced by Chattem’s sales, marketing and distribution channels.”
 
Sanofi’s offered Chattem $93.50 per share, a 34% premium. The companies said the transaction should close in Q1, 2010. The deal would make Sanofi the fifth-largest consumer healthcare company in the world as measured by product revenues.
 
Sanofi was notably acquisitive in 2009. In addition to the purchase of Laboratoire Oenobiol, it bought BiPar Sciences and Fovea Pharmaceuticals, and a majority stake in a Russian insulin maker. Sanofi also acquired rights to an anti-MRSA vaccine produced by Syntiron and formed a research alliance with Cal Tech.

Pfizer, the world’s largest drugmaker, has announced plans to pursue aggressive sales growth and market-share targets in China. In doing so, it hopes to take advantage of the nation’s unmet needs for health care which have been prompted by an economic boom and an associated increase in diabetes and hypertension.

In a recent interview with the Wall Street Journal, Pfizer’s Regional President of North Asia Allan Gabor said the company wants to increase sales in China by 25% per year.

“When you look at where we are in China today, even though our growth rate is high, the market share is relatively low. And that’s a function of … the nature of the competition here, and the fact that patent law wasn’t really established until 1993,” Gabor told the Journal.

Pfizer is well positioned in the cardiovascular disease market with the blockbusters Lipitor (for cholesterol) and Norvasc (for high blood pressure). Last month, Pfizer rounded out this portfolio by announcing a deal to help Takeda Pharmaceuticals market Actos, a drug for type 2 diabetes, in China.

Pfizer is already the largest foreign pharmaceutical company on the mainland, yet it controls only 2% of the market. The Chinese pharmaceutical market is remarkably fragmented, with thousands of local players in the mix.

The market for pharmaceuticals in China rose 27% last year, and most forecasters believe it will grow by at least 20% per year in the foreseeable future.

Pfizer’s recent acquisition of Wyeth will help. The latter’s pneumococcal vaccine, Prevnar, was “one of the most successful product launches in China history,” Gabor said. Wyeth also adds the popular vitamin supplement Centrum, and baby formula which became popular after last year’s melamine scare.

Pfizer’s move comes about 2 months after Swiss pharmaceutical giant Novartis announced it will invest $1 billion into an R&D facility in Shanghai.

Most people have assumed that direct-to-consumer advertising has helped drive up the cost of drugs, but there really hadn’t been much proof of that. Until now, that is.

The proof comes in the form of a study published in the Archives of Internal Medicine.

In the study, Michael Law of the University of British Columbia and others looked at US sales of Plavix, the $4 billion clot-busting blockbuster co-marketed by BMS and Sanofi-Aventis for the prevention of recurrent heart attacks and strokes, and thrombotic complications following stent placement.

Plavix was introduced to the US market in 1998. DTC advertising for the drug began 3 years later, and exceeded $350 million dollars over the next 4 years.

Law’s group queried pharmacy data from 27 Medicaid programs from 1999 through 2005 to analyze changes in Plavix prescription volume, the cost per unit dispensed, and total pharmacy expenditures before and after DTC advertising was introduced.

The scientists detected no change in the preexisting trend in the number of Plavix prescriptions written after DTC advertising was introduced.

They did, however, detect a sudden, sustained increase in cost per unit of the drug, of $0.40 per unit dispensed which coincided with the introduction of DTC advertising.

This resulted in an incremental cost of $40.58 per 1000 Medicaid enrollees per quarter, or an additional $207 million in total pharmacy expenditures.

“The key issue is whether advertising to consumers, which has risen 330% in the last 10 years in the US, contributes to the significant cost increases in publicly funded health insurance programs such as Medicaid,” Stephen Soumerai told BurrillReport.

For the second time this year, a clinical trial has shown that the cholesterol-lowering drug Zetia does not prevent heart disease.  

The first trial appeared last January. That trial compared Vytorin—a blockbuster drug that combines  the active ingredient in Zetia with a generic cholesterol-buster known as simvastatin—against simvastatin alone in patients with a genetic condition causing them to have very high levels of LDL (bad) cholesterol and premature cardiovascular disease.

In that trial, Vytorin reduced LDL cholesterol levels much more than simvastatin alone but surprisingly, atherosclerotic plaques actually grew faster in the coronary arteries of the patients taking Vytorin.

The news was greeted with a precipitous fall in prescription volume for both Zetia and Vytorin.

The second study was published last week in the New England Journal of Medicine. This study compared Zetia to Niaspan, a drug that raises blood levels of HDL (good) cholesterol.

In the second study, Allen Taylor of the Walter Reed Army Medical Center and colleagues enrolled 363 people with coronary artery disease that had been taking statins for many years. 

Taylor’s group found that Niaspan shrank carotid artery plaques by 2%, but Zetia had no such effect, even though it effectively reduced cholesterol levels (as it did in the first trial). In addition, patients who received Niaspan sustained 2 heart attacks or heart-related deaths during the study, while 9 patients receiving Zetia suffered that outcome, a significant difference.

Zetia “should be better for the arteries and it wasn’t,” Taylor told reporters covering last month’s American Heart Association meetings. “The drug wasn’t operating as you would expect.”

Officials at Merck, which co-markets Vytorin, said the study wasn’t large enough to draw firm conclusions and that larger trials of a similar nature are underway. Stay tuned.

Swiss pharmaceutical giant Novartis announced last week that it will invest $1 billion into an R&D facility in Shanghai, China.

China’s remarkable economic growth is driving the decision, according to Chief Executive Daniel Vasella.

Company strategists predict China could vault into the top 3 national markets for the company’s products as soon as 2014.

The prediction is based on Novartis’ astounding 30% growth in revenues from China in each of the last several years.

That trend is likely to accelerate now that Chinese officials have decided to overhaul the nation’s health care system, most notably by rebuilding moribund facilities in rural areas and expanding health insurance to 90% of China’s citizens by 2011.

Novartis’ investment will be spread over 5 years. It will boost the headcount in the company’s Shanghai R&D facility from 160 to 1,000, making it more or less equal in size to the company’s A-number one research shop in Cambridge, Massachusetts. The  company’s HQ in Basel remains the largest facility overall.

“I think it will be a signal of China’s rising importance in the pharmaceutical industry,” Vasella told the Wall Street Journal during a recent sojourn to Beijing. “You have to ask yourself, where do you need to be down the road, and clearly it is here.”

Vasella added that his decision was made possible because of the newfound plethora of scientific talent in China. He brushed off concerns about the country’s notoriously lax protections of intellectual property.

Novartis’ move into China is at least the third by a large pharmaceutical company in recent years. Roche opened a research lab there in 2004, and a clinical trial center in 2007.  In 2006, AZ opened a research center in Shanghai. It is building another one in Zhangjiang.

When the so-called “atypical antipsychotic” drugs hit the market 15 years ago, psychiatrists and PCPs began prescribing them like crazy for schizophrenia and bipolar disorder.

They were motivated the poor side-effect profile of previously available drugs, and encouraged by relentless and occasionally unscrupulous marketing campaigns promulgated by drug makers and paid clinical spokespeople.

Last year, the drugs generated $14.6 billion in US sales alone, according to IMS Health.

Unfortunately, the newer drugs proved to be, at best, marginally more effective than their older, cheaper brethren, and have a nasty tendency to promote weight gain and diabetes, particularly in children—for whom they are rarely indicated, according to the FDA.

Now, Christolph Correll and colleagues at Feinstein Institute for Medical Research have quantified the weight gain problem, and it’s a lot.

According to their report in JAMA, atypical antipsychotic drugs caused youths between the ages of 4-19 years old to gain up to 19 pounds on average in just 11 weeks.

“The weight gain is much larger than we thought,” Correll told the Wall Street Journal. “It’s massive, and it’s the medication” that caused it, he added.

Correll’s study involved 272 youths who were seen at semi-urban, tertiary care, academic inpatient and outpatient clinics. It included the 4 top-sellers in the space: Zyprexa (Lilly), Abilify (BMS), Risperdal (J&J) and Seroquel (AZ). Participants had not taken the drugs previously.

Of the 4, Zyprexa caused the most weight gain—nearly 19 pounds—a 15% increase over baseline. The corpulence was associated with significant increases in glucose and cholesterol levels.

The other drugs caused weight gains between 10-13 pounds on average, and had variable effects on glucose and cholesterol.

The scientists encouraged physicians to be extremely careful when prescribing these drugs to youths and to check their patients’ weight and blood tests every 3 months.

The FDA will soon decide whether to approve these drugs for use in youths. Any bets how that turns out?

Contrary to FDA warnings on the matter, a UK  study has found “no clear evidence” to support the claim that the cigarette cessation drug Chantix increases the risk of suicidal thoughts and suicide.

To reach these conclusions, David Gunnell and colleagues at the University of Bristol reviewed the records of 80,660 men and women aged 18-95 years that had received a smoking cessation product (Chantix, Zyban or nicotine replacement therapy) between September 2006 and May 2008.

The scientists found 166 episodes of nonfatal self-harm and 2 suicides — both occurring in patients receiving nicotine replacement therapy. An additional 37 subjects reported having suicidal thoughts.

Chantix and Zyban did increase the risk of such phenomena by 12% and 17% compared with nicotine replacement products in the study, but this difference did not achieve statistical significance. The authors were left to conclude there was no clear evidence that Chantix was associated with an increased risk.

The limited study power “means we cannot rule out either a halving or a twofold increase in risk,” according to the authors.

Chantix also did not appear to increase the risk of depression or suicidal thoughts, confirming a report last March.

The FDA issued black box warnings for both Chantix and Zyban last July, and regulatory agencies around the world followed suit after adverse event reports raised the possibility of such a relationship.

The authors noted that smokers have a nearly threefold increased risk of suicide, probably because people with psychiatric illnesses are far more likely to be smokers.

It’s possible, they said, that smoking “has a beneficial effect on psychiatric symptoms, such as anxiety, that may be lost with smoking cessation.”

The write-up is in the British Medical Journal.

When Pfizer coughed up $2.3 billion to settle criminal allegations that it promoted off-label use of Bextra, it was the biggest such settlement in history. But Pfizer is not the only drug company to have been nabbed for such activities.

Five years ago, Parke-Davis forked over $430 million to settle a similar suit involving Neurontin.

Now it has come to light that Parke-Davis took advantage of the half-baked policies of certain journals regarding ghostwriting and disclosure of the financial ties of authors to promote off-label utilization of the latter drug.

Between 1997 and 2000, these journals published 13 articles promoting off-label use of Neurontin that were ghostwritten and funded by Parke-Davis without disclosing such arrangements, according to Jenny White, a research analyst at UCSF, who spoke at last months’ Peer Review Congress.

The journals have beefed up their disclosure policies since that time, White added.

To reach these conclusions, White and colleagues reviewed internal industry documents regarding Neurontin that had been archived at her school’s Drug Industry Document Archive. They subsequently asked the journals to delineate current and former policies regarding ghostwriting, conflict of interest and so on.

White’s group identified 24 articles and correspondences with editors that had either been produced with support from grants that Parke-Davis or  by Parke-Davis ghostwriters.

At least 13 of these articles were published in journals that included no disclosure of the fact that Parke-Davis had a role in producing the paper. Only 2 of these articles revealed that the authors had received honoraria from Parke-Davis.

These journals “generally had less stringent requirements [regarding disclosures] than those where articles were not published,” according to White. None of them had a policy regarding disclosure of ghost authorship.

White recommended that peer-reviewed journals adopt uniform policies to prohibit such shenanigans in the future.