People forget the stir Big Pharma created 16 months ago when it gave Big-Ups to the Big O at a time when he desperately needed passengers to ride the Health Reform Express.

The dust-up took place before Massachusetts produced “Guess Who’s Coming to Dinner” starring Scott Brown, and before Congressional parliamentarians reminded us what reconciliation meant. And it happened before Congress managed to vote 100% along party lines on what was inarguably one of the most important pieces of social legislation in our generation.

But it did happen. In June, 2009, Big Pharma’s main lobbying arm offered the Big O a deal he couldn’t  refuse: “We’ll cut prices on drugs purchased by Medicare by $80 billion over the next 10 years if you don’t push Medicare to import cheap drugs from Canada or direct it to negotiate price cuts with us.”

At the time, the Party of No was aghast! How could Big Pharma do such a thing? John Boehner was so moved by the treasonous behavior, he accused the lobbying group of trying to appease a “bully.”

(Oh c’mon John! Obama? A “bully”?)

Of course all of this is old news especially since Republicans cleaned house in the midterms and are now threatening to repeal and replace the Big O’s health reform law altogether.

Will the purge include a bit of pay-back for Big Pharma? Alas, probably not. There have been no calls for retribution by the Republicans. In fact, many industry insiders believe drug companies might make out just fine in view of the antiregulatory, antigovernment sentiments espoused by the Boehners.

These insiders doubt the GOP would seek to reverse the “doughnut hole” savings for Medicare beneficiaries that was part of the original deal, since that would be panned by senior citizens and why give the Pelosis an issue they can leverage?

Beyond this, Big Pharma believes the GOP might just help them out by reauthorizing the Prescription Drug User Fee Act, which permits drug and device companies to funnel cash to the FDA in order to expedite product reviews. The drug industry claims this process assures new drugs get to market more quickly by assuring the FDA has enough resources to move things along (and want you to ignore those silly consumer advocates who argue such fees could bias the FDA process!).

The impetus to repeal the PDUFA in the first place came from Connecticut Rosa DeLauro and other House Democrats, who are now playing second fiddle to the Boehners. “Consumer groups will be neutered in this discussion,” analyst Ira Loss of Washington Analysis LLC told the Wall Street Journal.

And it didn’t hurt matters that Big Pharma donations, which tilted uncharacteristically toward the Big O in 2008, flowed heavily toward GOP candidates this time ‘round…

GeneScience, a pharmaceutical company based in Changchun, China, has pleaded guilty to federal charges that it distributed human growth hormone in the US.

The agreement with US prosecutors requires the company to plead guilty to a felony, contribute $3 million into a “Clean Competition Fund” which supports drug-free sports, and pay $7.2 million in criminal fines. The company’s CEO, Lei Jin, was also required to plead guilty. He was sentenced to five years’ probation.

Nearly all organized sports in the US prohibit competitors from using HGH.

“HGH, when distributed and used unlawfully, poses a serious health threat, particularly to young people who ignore the risks of such substances in an effort to enhance athletic performance,” Peter Neronha told the New York Times. Nerohna is the US district attorney who organized the case against GeneScience.

GeneScience was founded in 1996. It claims to be the most profitable biopharmaceutical company in China. US officials had alleged the company distributed Jintropin, its version of HGH, around the world via the Internet. The company remains in business.

Jin is a Chinese citizen who received a PhD in pharmaceutical chemistry from UCSF. He had previously served as a research scientist at Genentech, a leading supplier of HGH.

Neronha’s case alleged that Jintropin had not been approved by the FDA, and that the company used offshore bank accounts, fake e-mail addresses and a drug trafficking network to distribute large quantities of HGH in the US.

The Clean Competition Fund will be operated by the Rhode Island Community Foundation. It will support antidoping campaigns, clinical research into the long-term effects of HGH and drug screening programs.

The FDA has approved Gilenya for use in slowing the progression of multiple sclerosis and reducing the frequency of disease relapses. The drug, developed by Novartis, becomes the first federally approved oral treatment for the debilitating disease, which affects 400,000 people in the US and more than 2 million people around the world.

Novartis had been in a race with Merck to be first-to-market with an effective oral treatment for multiple sclerosis, a disease that attacks the central nervous system and causes symptoms ranging from double vision to gait abnormalities and even stroke-like symptoms.

Marck’s anti-MS drug, cladribine, will be reviewed and possibly approved by the FDA before the end of this year.

Industry analysts and Novartis expect Gilenya to achieve at least $1 billion in annual sales.

Until the FDA green-lighted Gilenya, the only FDA-approved options for MS patients were intravenous drugs produced by Biogen Idec and Bayer. Biogen’s products, Avonex and Tysabri are leaders in MS market, which is estimated to be worth $8.6 billion per year.

“A new treatment option that offers significant efficacy in the convenience of a capsule is a welcome alternative to frequent injections for individuals living with this chronic disease,” Nicholas LaRocca, a VP at the National Multiple Sclerosis Society told BurrillReport.

In approving Gilenya, the FDA warned that patients who take the drug should be observed for slow heart rates shortly after therapy begins, and that the drug may be associated with infections.

For its part, Biogen Idec added in a statement that the long-term safety of Gilenya “has yet to be established.”

The mechanism of action of Gilenya remains unknown.  Many scientists believe it modulates a pathologic tendency for the body’s white blood cells to attack myelin, a fat-like substance that forms a protective sheath around nerve cells.

Last week, an FDA advisory panel narrowly supported a proposal by Eli Lilly & Co. to approve its blockbuster antidepressant Cymbalta for the treatment of chronic lower back pain.

Cymbalta has already been approved to treat fibromyalgia, anxiety and diabetic nerve pain. The drug is Lilly’s top-seller, having rung-up more than $3 billion in sales last year.

Before the vote, the committee reviewed FDA data showing that 2/3 of Cymbalta prescriptions written last year were for off-label uses, including headaches, musculoskeletal pain and non-diabetic nerve pain.

Regarding Lilly’s current proposal, 8 of the 14 members on the FDA’s anesthetic and life support drugs advisory committee voted “yes” in response to a question whether the FDA should green-light Cymbalta for the treatment of pain in a “broader population” than that which it has already approved.

The panel clarified that the FDA should approve Cymbalta for lower back pain but not for pain associated with osteoarthritis of the knee. In support of its decision, the panel noted that 2 out of 3 Lilly-funded studies of people with low back pain showed that Cymbalta provided significant pain relief over a 3-month period. In the case of osteoarthritis, only one out of two studies showed the drug reduced pain.

The FDA is not required to follow recommendations of its advisory committees, but it usually does.

Cymbalta carries a black-box warning from the FDA regarding the risk of suicide in children, adolescents and young adults. There are also warnings about liver damage, bleeding and adverse effects on blood pressure.

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.”