Andrew Witty, emerging-markets guru

Tracy Staton — Tue, 09 Feb 2010 10:57:26 -0500

Ever wonder why GlaxoSmithKline CEO Andrew Witty is so interested in Africa? Well, it might be that time in Johannesburg just before Nelson Mandela was elected president. It was 1994, and the political situation was so tense there that Glaxo's staff was stockpiling food in case of civil war, the New York Times reports. Witty, then head of the office there, worked to reassure his staff--and then Mandela was elected and democracy celebrated.

There and in other emerging markets where he worked--China, India, Myanmar, Pakistan, Vietnam--Witty noticed how resilient people were. They had "just unbelievable energy to self-improve, to lift themselves up."

Well, as you know, Witty is trying to help them up now, too. Initiatives that don't cost Glaxo a huge amount of money--such as slashing prices for the poorest patients--can help a lot in these countries, he believes. "They deserve their chance," he told the Times in an interview.

Apparently other Big Pharmas have decided they agree; in the last month or so, both Sanofi-Aventis and Pfizer have cut their prices in the developing world, too. Is Witty leading the way? Well, the other companies may have come to the same conclusions--and cut those prices--all on their own. But then again, maybe not.

- read the Times story

ALSO: Italy wants to stop GlaxoSmithKline from cutting jobs at a research center in the northern city of Verona, news agency Ansa reported, citing Labor Minister Maurizio Sacconi. Report

Price hikes help lift Biogen profits

Tracy Staton — Tue, 09 Feb 2010 10:23:43 -0500

Biogen Idec said fourth-quarter earnings rose by nearly half to $306 million as price increases helped lift revenue from its multiple sclerosis drugs. Report

Fujifilm aims for Japanese generics market

Tracy Staton — Tue, 09 Feb 2010 10:22:12 -0500

It looks as if Big Pharma companies aiming for big sales in Japan will have some more competition. Fujifilm Holdings and Mitsubishi are planning to set up a joint venture to make--you guessed it--generic drugs, Nikkei reports. Majority-owned by Fujifilm, the venture aims to be selling 200 products as soon as this spring, the news service reported. The companies themselves wouldn't comment.

This news comes on the heels of at least two major drugmakers pledging to grow Japanese sales big-time. Pfizer recently said it aims to be the No. 1 generic drugmaker in Japan. And GlaxoSmithKline chief Andrew Witty recently said that Japan can be a big market for his company, too.

Why the rush to Japanese generics? Well, the Japanese government is alarmed by fast-rising healthcare costs. And to save money it has instituted some new rules designed to funnel patients toward copycat meds. Its goal is to grow generics' share of the drug market to 30 percent by 2012, up from 20 percent at the end of 2009. Hence the drugmakers lining up to help them do it.

- read the Bloomberg story

NICE to drugmakers: Share our costs

Tracy Staton — Tue, 09 Feb 2010 10:13:07 -0500

The U.K.'s National Institute of Clinical Excellence has issued a new round of cancer-drug refusals. The drugs simply cost too much, NICE says. And to high prices, the cost-effectiveness watchdog always responds the way Queen Victoria did to a boorish guest: NICE is not amused.

Indeed, this time NICE took that lack of amusement a step further with Bristol-Myers Squibb and Novartis, saying that the drugmakers should foot some of the bill for treating cancer patients with their drugs: Bristol's Sprycel ($47,500 a year), and Novartis' Tasigna (almost $50,000) and Afintor.

"The cost of the drugs is ... extremely high," Peter Littlejohns, NICE's clinical and public-health director, says in a statement. "It would be heartening to hear that the pharmaceutical company manufacturers are prepared to share some of the very high cost of the drugs with the NHS," he adds.

Some drug companies have offered some innovative discounts to NICE to get their meds on the National Health Service formulary, such as charging for a drug only if it works, or paying for extended treatments. But to our knowledge, NICE hasn't yet bargained publicly for these cost-sharing deals. Will it work?

- see the NICE statement
- read the Bloomberg story
- get more from Reuters
- see the article at InPharm

Eli Lilly chief sees pay hike of 30%

Tracy Staton — Tue, 09 Feb 2010 09:59:34 -0500

Roll up your sleeves, folks. It's time once again to dig through the numbers on executive pay. First up: Eli Lilly chief John Lechleiter (photo). According to figures disclosed in a regulatory filing, Lechleiter scored a hefty raise in 2009. A really hefty raise, in fact: More than 30 percent.

Part of the jump between 2008 and 2009 came because Lechleiter took over as CEO partway through the previous year, and in 2009 he obviously served the entire 12 months in that post. Plus, the company's 2008 performance wasn't super-special, a spokesman tells the Associated Press, meaning Lechleiter got less incentive pay than he might have otherwise.

But enough of the explanations: You want the numbers. According to the proxy statement, Lechleiter's total package came in at $20.9 million. But the Associated Press and Wall Street Journal both come up with $16.4 million, because of various accounting rules that affect the proxy's reporting of the numbers. The company itself tells the IndyStar that the "real" number is more like $15.9 million.

We'll take the middle road and call it $16.4 million. According to Dow Jones, that total comprises $1.48 million in salary, $3.55 million in incentive pay, $11.25 million in equity, and $90,091 in tax reimbursements and savings-plan matching.

Don't expect another pay-increase story for Lechleiter next year; he's asked to forego any salary or bonus increase for 2010, given "the business challenges the company faces."

- see the IndyStar's piece
- get the WSJ Health Blog numbers
- check out the story from Dow Jones
- read the AP article

AstraZeneca reaches Crestor-use goal

Tracy Staton — Tue, 09 Feb 2010 09:44:14 -0500

AstraZeneca's Crestor has scored. The cholesterol drug can now be marketed as a preventive, not just a treatment. And that's the FDA approval AstraZeneca needed to help fight rival statins that are going off patent. That includes the great gorilla of statin drugs--indeed of all drugs--Pfizer's Lipitor.

AstraZeneca sponsored a huge study--almost 18,000 patients--to see how Crestor worked in people whose cholesterol fell within normal limits but whose C-reactive protein was elevated. CRP is an indicator of inflammation, a sort of precursor to full-blown cardiovascular disease. The JUPITER study showed that patients using Crestor had a significantly lower rate of cardio problems compared with patients on placebo.

So does this mean that doctors will be pulling blood testing and writing Crestor scrips for everyone whose CRP is elevated? The FDA hopes not; an advisory panel that recommended Crestor for the new indication worried that the drug might be used in too many patients at low risk of heart disease. In the JUPITER study, in fact, the drug helped patients with high CRP who also had other risk factors--like high blood pressure or family history--but didn't help patients without additional risk factors.

Either way, this new indication opens up a huge new market for the drug; some 6 million patients would qualify, the FDA said. Because no other statin is approved for this use, Crestor will be the only one touted as a preventive--and because Crestor still has several years of patent coverage left, AstraZeneca can reap the benefits. No doubt there's a Crestor ad campaign on its way to a TV or magazine near you.

- read the New York Times story
- get more from Forbes
- check out Bloomberg's take
- see the Reuters article

Pfizer launches emerging-markets discounts

Tracy Staton — Mon, 08 Feb 2010 10:06:40 -0500

In a bid to make it easier for emerging-markets customers to buy its drugs, Pfizer has launched an discount-card system that offers price cuts of up to 50 percent. The company is unveiling the program in Russia this month, looking to attract 500,000 patients over the next year or so. And it's aiming for fast-growing card programs in Mexico, Brazil and Venezuela, too.

Like the price breaks instituted by other companies in emerging markets--notably GlaxoSmithKline and Sanofi-Aventis--the aim of these is to boost the number of scrips in a big way in hopes of making more money by bringing in less from each patient.

But that's not all. By using a discount card to deliver the price cut, Pfizer will be able to collect information on each patient who uses its drugs. If a patient fails to refill a scrip on time, for instance, the company could contact that person with a reminder. Presumably the info could also be used for direct marketing, as well as for safety updates and the like. "The eCard is an innovative way to partner with society, patients and governments, to help manage chronic diseases at an affordable price," Pfizer's Jean-Michel Halfon tells the Financial Times.

- read the FT coverage

Vermont mulls free-sample disclosure rule

Tracy Staton — Mon, 08 Feb 2010 09:54:18 -0500

Vermont, which has already reined in drugmakers' marketing, could become the first state to require pharma to report how much they're spending on free drug samples. Report

No reform? Look for more consolidation

Tracy Staton — Mon, 08 Feb 2010 09:51:17 -0500

Look out, pharma: More consolidation is on its way. At least that's what market experts are saying. With healthcare costs rising continually--and healthcare reform idling miserably--drugmakers will have no choice.

Just look at the demographics. The number of older people will continue to balloon. They'll need more healthcare than the younger people whose taxes are primarily footing the bill. And because there are comparatively fewer of those younger people, there will be lots of pressure to keep costs down. Meanwhile, federal budget pressures already are mounting, on drugmakers and healthcare in general.

That environment "certainly seems to favor bigger, innovative, scalable companies," Paul Keckley of the Deloitte Center for Health Solutions told Bloomberg. So one obvious solution will be further consolidation.

Another? Healthcare reform. It's not a panacea for pharma, of course, but might help drugmakers make up in volume what they lose to pricing pressure. You may have seen that President Obama is convening a bipartisan summit to try to forge a compromise; we're a bit skeptical that it will yield much, but in Washington you just never know.

- read the Bloomberg piece
- get more from the Associated Press
- check out the Washington Post story

FDA: Risk builds up with Tysabri infusions

Tracy Staton — Mon, 08 Feb 2010 09:38:25 -0500

FDA sent out a new Tysabri warning Friday, one emphasizing that the risk of a rare brain infection increases as treatment continues. Biogen Idec, which markets the multiple sclerosis drug, said the FDA's warning--and revision of Tysabri's labeling--was not new. "Either it was included as part of our last label update or it was information that we are making available on a monthly basis," a spokeswoman told Reuters.

In any case, the FDA's statement points out that the overall risk of a Tysabri patient acquiring progressive multifocal leukoencephalopathy is still within the ratio that's been on the drug's label for a while. What's different is the addition of numbers for PML risk by the number of Tysabri infusions received by a patient, broken down for patients in the U.S. and outside the country.

In both locales, the risk more than doubles from the first infusion to the 24th, 0.7 per 1,000 to 1.9 per thousand outside the U.S., and 0.3 to 0.8 in the U.S. These stats include all 31 new cases through January 10, FDA says. Nevertheless, FDA maintains that Tysabri's benefits outweigh its risks. About 66,000 people have been treated with Tysabri since it came back onto the market in 2006.

- read the FDA statement
- get the FDA's update for healthcare professionals
- see the Reuters news
- check out the Boston Business Journal piece