The US Trans-Pacific Partnership and Prescription Drug Prices

Posted in BioBusiness

I am conflicted about the Trans-Pacific Partnership (TPP). On the one hand, I believe it is the right thing for American economy. On the other, it is probably not in the best interests of working Americans.  For those of you who may not know what the PTP is, it is an agreement between 12 different nations designed to “make it easier to sell Made-in-America goods and services exports to some of the most dynamic and fastest growing markets in the world, and support homegrown jobs and economic growth.”  Included in the made-in-America export list is prescription drugs.

Previously, the Obama Administration was pushing for protection for pharmaceutical prices in the TTP despite the fact that the cost of prescription drugs has skyrocketed in the past few years.

The New York Times reported today that the Obama Administration is no longer demanding protection for pharmaceutical prices. Public health professionals, generic drug manufactures and public interest groups have long contended that the TPP in its original form will empower big pharmaceutical/biotechnology companies to command “high reimbursement rates in the United States and abroad at the expense of consumers.”

The Obama administration has encountered enormous push back during negotiations from some of its potential trading partners including New Zealand, Australia, Vietnam and Peru all of which have strong cost containment policies for prescription drugs.  This has forced the administration to not press for prescription drug price controls because it could jeopardize the entire agreement.  Not surprisingly, pharmaceutical companies contend that they need to charge “fair prices” to compensate for the billions of dollars and decades of research that goes into to developing new prescription drugs.  Moreover, pharmaceutical firms and their trade associations have hired far more lobbyists that any other industry to lobby for pharmaceutical price protection.

Regardless of the outcome of the TPP, it is becoming increasingly clear that the rising costs of prescription drugs is contributing more than previously projected to rising medical costs in the US and elsewhere.  The advent of biosimilar medicines which are likely to be sold at a 25% to 40% discount as compared with the branded reference product, will certainly help to control rising healthcare costs.  However, at some point in the not too distant future the US government will have to consider implementing prescription drug price control policies.  In my opinion, it is no longer a question of “if’ but “when.”

Until next time,

Good luck and good job hunting!!!!!!!!!

 

Even Generics Companies Are Not Immune: Teva to Slash 5,000 Jobs!

Posted in BioBusiness, BioJobBuzz

Despite the fact that over 80% of the drugs sold in the US are now generic, Teva, the world’s largest generic drug manufacture (based in Israel) announced yesterday that it will eliminate 5,000 jobs (about 10% of its global workforce) by the end of 2014. According to the company, this action is part of Teva’s worldwide restructuring plan which was introduced in December 2012.

While Teva is generally known as a generic drug manufacturer, it does generate a substantial part of its sales revenue for a branded injectable multiple sclerosis drug called Copaxone lost patent protection.  According to a post at the Pharmalot Blog

The move comes less than three months after a US court invalidated the 2015 patent on its Copaxone multiple sclerosis drug. The decision means patent protection for the drug, which generates about half of company earnings and dominates the MS market, may prevent rivals from selling lower-cost versions of the injectable drug only until next year.

In recent years, Teva has made major investments into biosimilar drugs and presently has two approved product –( Lonquex (XM22 lipegfilgrastim) and Tevagrastim (filigrastim)–on the market.  At present, while Congress passed legislation to allow biosimilars to be approved and sold in the US, the Food and Drug Administration has been extremely slow in translating the legislation into a functional and understandable legal regulatory pathway for approval of biosimilars.

Look for job cuts in the pharmaceutical industry (Lilly ?) in the next few months as we are entering prime layoff announcement season.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

 

AbbVie to Fire Hundreds of Sales Reps

Posted in BioBusiness

AbbVie, the prescription drug spinoff of Abbott Laboratories revealed that it will be laying off several hundred cardiovascular sales reps. The fired workers will be a mix of full time sales personnel and contract workers.  The reason: generic encroachment of its cardiovascular drug franchises. Among those drugs is TriCor, which began facing generic competition in November. TriCor, along with related medication Trilipix, generated $1.1 billion in U.S. sales for AbbVie last year.. Niaspan, an extended-release version of a medicine to raise HDL also will face generic competition this year It sold $911 million for AbbVie in 2012

AbbVie is shifting its focus from primary care, such as drugs that treat a patient’s cholesterol, stroke or diabetes, to so-called specialty medications in areas of unmet health needs

AbbVie is jumping on the elimination of sales personnel bandwagon and joins Eli Lilly which late last week announced that it plans to dismiss hundreds of sales reps tomorrow, a spokesman confirms. The cuts may amount to 30 percent of the companywide sales force in its BioMedicines division, which includes the cardiovascular, neuroscience and Men’s health units Likewise, last Fall, NJ-based Bristol-Myers Squibb layed off 480 sales reps.

Based on the events of the past five years, it may not be a good idea to pursue a career as   a PhD-trained life scientist or a pharma sales rep!  Surprisingly, however, there is a growing need for biopharmaceutical/biotechnology sales reps….go figure!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!

New Pharma Magazine to Launch NewPharmaThinkers.com Website

Posted in BioBusiness

New Pharma Magazine, announced today that it will launch a new website on June 13 called newpharmathinkers.com. According to a press release”

“NewPharmaThinkers.com is the new community for big thinkers! It is a place where influencers can come together to provoke original thinking and discuss the future of pharma. Members of the New Pharma Thinkers community can leave questions, comments or remarks at the website and even query authors of reports, articles, podcasts etc if you become a premium member.

Come check us out at NewPharmaThinkers.com! Join our community and you will receive copies of articles, reports, and even podcasts when we officially launch on June 13th. Just be sure to bring that big brain of yours with you, because this is a community for thinkers! ”

For those of you who may not know, New Pharma Magazine was launched a couple of months ago with the goal of providing relevant content pertinent to the generic drug, over-the-counter, animal health and biosimilar industries.

Until next time…

Good Luck and Good Job Hunting!!!!!!

AstraZeneca Sheds 7,300 Jobs

Posted in BioEducation

After announcing its quarterly earnings and a 24 percent increase in 2011 profits, AstraZeneca (AZ) today made public its decision to eliminate another 7,300 jobs. Earlier this week there was speculation that job cuts were likely but the exact numbers were not disclosed. 

The reasons given for the layoffs despite increased annual profits? Government spending cuts for healthcare and stiff generic competition for several of its blockbuster drugs including Seroquel XR (depression), Atacand (hypertension) Crestor (cholesterol-lowering) and Symbicort (asthma); all of which have lost or will be losing patent protection in the near future. According to a company press release generic competition cut revenues by $2.0 billion in 2011 whereas government price interventions cost the company another $1.0 billion. The announced job cuts are expected to save AZ $1.6 billion by 2014—great news for shareholders but not so much for the employees who are losing their jobs!

Most of the cuts will take place in R&D. To that end, the company will close its facility in Montreal and layoff staff at its Soedertaelje site in Sweden. Interestingly, the company plans on focusing more on neuroscience and intends to hire 40 to 50 scientists in its new Innovative Medicine unit which is partly based in Boston, MA and Cambridge in England.

While layoffs at AZ were expected, the size of the current layoff does not bode well for other pharmaceutical employees. It is becoming increasingly clear that big pharma companies are getting out of R&D and focusing their efforts on M&A and licensing deals to fill their thinning pipelines. Also, while shedding R&D and sales jobs in developed markets, big pharma companies are investing heavily in building facilities and hiring thousands of R&D and sales personnel in emerging markets. From my perspective, it appears that big pharma has consciously decided to abandon developed Western markets where sales growth is in the single digits in favor of emerging ones where double digit growth is expected for the next decade.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!

 

Monthly Pharma Layoff Report

Posted in BioEducation

Thing have been quiet in the pharma layoff space during 2012. I guess that is not so surprising since we are only one month into 2012. However, there was a post on yesterday’s Pharmalot blog which indicates pharma layoffs may resume in earnest over the next few weeks. 

According to the post, AstraZeneca (AZ) is poised to shed thousands of more jobs after the company announces it earnings later this week. As you may recall, AZ recently announced that it would lay off 400 employees at its US headquarters and eliminate another 1,150 jobs from its US sales force. Like other pharmaceutical companies, things have been tough for AZ as three of its blockbuster products Crestor (cholesterol lowering), Nexium (acid reflux) and Seroquel (antipsychotic) lose patent protection and face stiff generic competition.

The Pharmalot post also reported that:

“Between 2007 and 2009, AstraZeneca eliminated 12,600 positions, a move that saved $1.6 billion annually, although that figure rose to $2.4 billion by 2010. The cuts announced that year were designed to save $1.9 billion annually by 2014 It is not clear how much the drug maker hopes to save with still more cuts, but some $3 billion may be spent on a stock buyback to bolster shareholder confidence.”

It is important to note that the massive downsizing that has taken place in the pharma industry over the past decade has little to do with the recession and everything to do with the loss of blockbuster revenues due to generic encroachment. Put simply, most pharma companies grew too large too quickly and subsequently realized that could not sustain their vast infrastructures if the loss of blockbuster sales revenues could not be replaced by new products. To wit, if you look at the P&L statements of many pharmaceutical companies, most have $5 billon to $30 billion of readily-available cash reserves on hand to “play” with. Sadly, the downsizing that has taken place had little to do with the present and everything to do about the future profitability of big pharma companies.

Until next time…

Good Luck and Good Job Hunting!!!!!!

 

Abbott Slashes 700 Jobs From Its Medical Devices and Diagnostics Unit

Posted in BioEducation

Chicago-based Abbott Laboratories today announced that it would lay off 700 employees from its medical devices and diagnostics division as part of an ongoing restructuring effort. 

Most of the layoffs will take place in the Chicago area and affect employees that manufacture the company’s cardiovascular stents and diagnostic tests. According to a company spokesperson approximately 500 persons who work in stent manufacturing and 200 who work in diagnostics will lose their jobs.

The restructuring of Abbott’s manufacturing operations began several years ago and about this time last year the company layed off about 1,900 employees in Lake County, Illinois.

In October, Abbott surprised investors and analysts with the announcement that it would spin off its branded drug business, including Humira (psoriasis and rheumatoid arthritis) it’s largest selling branded pharmaceutical product. Company executives argued that the split would allow stakeholders and investors to separately and more accurately value Abbott’s other less risky businesses which include nutritional (baby) formula, generic drugs and medical devices and diagnostics.

Despite signs of economic recovery, it appears that layoffs are still occurring at a pretty good clip at many pharma and biotech companies. It now appears that medical devices and diagnostic company employees, who were once immune to downsizing and reorganization, are now fair game.

Until next time…

Good Luck and Good Job Hunting!!!!

 

Despite Near-Record Recalls, the Price of Prescription Drugs Continues to Rise

Posted in BioBusiness

Ed Silverman, the intrepid author of the Pharmalot Blog, reported today that the average price of prescription drugs through last month rose 7.2 per cent; which tops the annual price rate increases over the past decade. The cost analysis was done on 130 prescription drugs.

The biggest winners were: Suboxone, marketed by Reckitt Benckiser to treat opioid addiction which rose 21 percent. Cephalon raised the price of its Provigil narcolepsy pill by 15 percent and Sunovion Pharma hiked the prices of its Xopenex asthma and COPD med by 9.8 percent. Other drugmakers on the list included Genentech, Merck and Abbott Laboratories.

Ed cautioned that “the price changes are based on WAC, or wholesale acquisition cost, for more than 90 percent of the drugs, which means that less than 10 percent of increases are based on direct price or suggested wholesale price” Nevertheless, any wholesale price increases are always passed on to the end users aka patients!

It is troubling that in these tough economic times that drug prices continue to rise at unprecedented rates. And access to reasonably priced medicines continues to diminish.  Not surprisingly, prices continue to rise in advance of healthcare reform legislation that doesn’t kick in entirely until 2014.

Until next time

Good Luck and Good Job Hunting!!!!!!!

 

In Case You Haven't Been Paying Attention: The Indian and Chinese Life Sciences Markets Are Poised For Expansive Growth

Posted in BioBusiness

Over the past week or so there have been daily snippets on various media platforms about business deals and opportunities in the Indian and Chinese life sciences market. While it is not news that many life sciences companies are expanding operations into these markets, the growing frequency of news items about the “goings on” in both markets are noteworthy.

The first bit of news that started the Indian and Chinese life sciences news avalanche, was a note on May 29 that appeared on The Economic Times’ website that reported that New Delhi-based JB Chemical and Pharmaceuticals planned to double the size of its medical sales reps to 1,500 over the next two years to increase its penetration into rural Indian markets. The company had previously divested it over-the-counter consumer business in Russia and other Commonwealth Independent States (CIS; composed of countries from the former Soviet Union) to start up new divisions in gynecology and dental products.

The same day, another New Delhi-based drugmaker called Lupin that specializes in generic drugs, announced that it plans to launch 50 new products by FY12; twelve of which will be generic drugs launched in the US. Both bits of information suggest that new previously untapped commercial opportunities are rapidly beginning to emerge in India and that Indian drug makers are looking to compete in the US and Western European markets that were previously dominated by American, Western European and Japanese companies.

In other India-related pharmaceutical news, an article appeared on June 2 at the Online Pharma Times website that reported that Shlomo Yanai, CEO of the Israeli generic pharmaceutical giant Teva, had flown to India to discuss potential collaborations with pharmaceutical companies there. While most analysts do not think that an acquisition is likely—Teva agreed to buy US-based Cephalon in May for $6.8 billion and also paid $460 million to acquire a controlling stake in Japanese generics group Taiyo Pharmaceuticals—it signals a growing interest by foreign companies to do deals in India to establish a presence it that market.

Like the Indian market, the Chinese market is beginning to heat up. An article at Bloomberg.com published on June 1 reported that Novo Nordisk will boosts its investment in China to preserve its dominance in the diabetes market after rival Sanofi announced a new foray into the Chinese market.

According to a report issued last fall by the International Market Analysis Research and Consulting Group, the Chinese diabetes market is expected to grow from $642 million in 2009 to more that $2.8 billion in 2015. The reason for the increase is attributed to the trend of more people moving from rural areas to cities and changes in eating habits and lifestyles that are contributing to a growing Chinese obesity problem. At present the US Centers for Disease Control in Atlanta estimates that roughly 8.3 percent of the U.S. population and 6.6 percent of the global population has diabetes

Novo first entered the Chinese market about 15 years ago and in 2002 created a diabetes research center and in 2007, in association with the Chinese Academy of Sciences established a foundation to fight diabetes. This year, the company plans on expanding its insulin packaging plant in China becoming the world’s largest insulin packaging facility.

Likewise, in 2005 Sanofi created a diabetes clinic. Three years later is expanded the clinics operations, established a clinical trial center and entered into a partnership with the Shanghai Institutes for Biological Sciences to develop treatments for diabetes, cancer and neurological diseases.

On Jun 3, Pfizer, the world’s largest drugmaker (for now) announced that it plans to partner in a joint venture with China’s Zhejian Hisun Pharmaceutical Company to produce generic drugs for the emerging Chinese market. According to the post on Bloomberg.com

“Pfizer is looking for new sources of revenue before it loses U.S. patent protection in November for Lipitor, the cholesterol medication that was the world’s best-selling drug last year with $10.7 billion in sales. Off-patent medicines, including branded generics, are one of the fastest growing segments in the global pharmaceutical market, Pfizer and Hisun said in a joint press release.”

At present, Pfizer is the top drug company in China (by sales) followed by AstraZeneca and Sanofi according to information supplied by the prescription drug intelligence firm IMS. The size of the Chinese drug market is project to grow by 25 percent this year and rough 60% of the existing market is dominated by generic drugs.

Finally, Chinese pharmaceutical companies are also beginning to invest in the US market. Late last week, the Tianjin Tasly Pharmaceutical Group signed an agreement with the State of Maryland to invest $40 million to build a tradition Chinese medicine (TCM) facility to provide TCM training and information. According to a press release:

“Tasly Pharmaceutical is currently preparing materials for approval by America’s Food and Drug Administration and plans to sell compound danshen drip pills in US and European markets. The medicine’s primary ingredient is obtained from the salvia miltiorrhiza species and is used to treat cardiovascular and cerebrovascular diseases. Danshen is also known colloquially as red sage or Chinese sage.”

I think it is time to pay more attentions to the ebb and flow of the Indian and Chinese markets!

Until next time,

Good Luck and Good Job Hunting (try India and China)!!!!!!

 

Antibiotic Revenues and Antibacterial Drug Discovery Research Are Declining

Posted in BioBusiness

The loss of patent protection and a decline in revenues for a number of blockbuster brand name antibiotics has caused many big pharmaceutical companies to exit the antibacterial drug discovery market. The three remaining big pharma companies still actively engaged in antibacterial research are GlaxoSmithKline, AstraZeneca and Novartis (all European owned companies).

A new report by UK-based Datamonitor entitled “Forecast Insight: Antibacterials” predicts that antibiotic sales revenues will decline from $19.6 billion in 2009 to about $16.4 billion in 2019. Not surprisingly, the report blames the projected decline on generic competition and the lack of new antibiotic launches over the past 10 years.

At present, the top seven antibiotic markets in the world include the US, Japan, France, Germany, Italy, Spain and the UK. According to Datamonitor’s analyses, total sales in these markets have fallen by about 1.6 percent annually since 2005 and will continue to decline by almost 2.0 percent a year through 2019. In 2009, three antibiotics had sales of about or more than $1.0 billion; Johnson & Johnson’s Levaquin (market leader), and Pfizer’s Zosyn, and Zyvox. Interestingly, Pfizer recently decided to shut down its US-based antibacterial drug discovery program and move it to China and Johnson & Johnson recently announced that it was getting out of the antibiotic discovery business

Big pharma’s decision to abandon antibiotic research could not have come at a worse time. The incidence of antibiotic resistance among both Gram positive and Gram negative bacteria is rising at unprecedented rates. And while safe and effective treatments for Gram positive infections including MRSA (methicillin-resistant Staphylococcus aureus) still exist, the number of treatment options to treat Gram negative infections caused by Acinetobacter spp, Pseudomonas aeruginosa and enteric bacteria is severely limited. The recent description and rapid spread of a beta-lactamase enzyme called NDM-1 that inactivates the antibiotic carbapenem—the last safe and effective antibiotic to universally treat infections caused by Gram negative bacteria —is extremely troubling and worrisome.

While much of the focus over the last decade was on MRSA, infections caused by untreatable, multiple drug resistant Gram negative bacteria will pose the greatest public health threat over the next 10 years. Unfortunately, it is much harder to develop new antibiotic treatments for Gram negative infections as compared with ones caused by Gram positive bacteria. Further, at present, most of the companies that remain in the antibiotic space continue to focus on new treatment for MRSA and related bacteria. Consequently, new treatments for Gram negative infections may be more than a decade away!

Finally, like MRSA, most infections caused by multiple drug resistant Gram negative bacteria are nosocomial in nature (although the incidence of community acquired infections is also on the rise). This means that the most likely place to become infected with these bacteria is institutionalized healthcare settings including hospitals and nursing homes.

In the past, we have relied on pharmaceutical and biotechnology companies to discover new antibiotic treatments. The decision of many of these companies to leave the antibacterial space for purely financial reasons is unfortunate and regrettable. However, the growing incidence of antibiotic resistance among both Gram positive and Gram negative bacteria suggests that new antibiotics are necessary and that alternate approaches to new antibiotic drug discovery must be implemented. Whether this is through public/private partnerships or strictly through government programs is irrelevant. The bottom line is that we need new antibiotics; and if they are not discovered soon, many patients will die from previously treatable bacterial infections!

Until next time…

Good Luck and Good Job Hunting (start an antibiotic drug discovery company)