Ranbaxy to Shed as Many as 400 Middle and Senior Management Jobs

Posted in BioBusiness

The UK’s Economic Times reported  today that the troubled Indian generic drug manufacturer Ranbaxy may shed as many as 400 jobs from its various divisions. Most of the persons receiving pink slips will be senior and middle management who are likely losing their jobs because of ongoing serious drug manufacturing problems that have plagued the company for over three years.  The drug maker employs about 14, 600 people in 43 countries.

While the job cuts do not represent a significant percentage of Ranbaxy’s workforce, Daiichi Sankyo which owns the company, is likely eliminating members of the management team that have been responsible for the company’s ongoing manufacturing problems. According to the Economic Times article

“On Thursday, some senior executives from the finance department at Ranbaxy were asked to leave. On Friday, some senior executives from the Research & Development wing were given marching orders,” an employee familiar with the job cuts told ET. Another executive said some officials from the API(active pharma ingredient) division have also been handed pink slips.

This past May, Ranbaxy paid the US Department of Justice $500 million to settle criminal and civil charges to resolve the manufacturing problems that prompted the US Food and Drug Administration (FDA) to ban the sale of dozens of drugs manufactured by the company.  More recently, FDA inspectors issued an unsatisfactory inspection report for one of the company’s manufacturing plants in India.

Ranbaxy is one of the world’s leading generic drug manufactures and the company’s ongoing manufacturing problems have certainly hurt Daiichi Sankyo’s image. Also, it has led some analyst to question whether or not Daiichi Sankyo ought to have purchased the troubled generic manufacturer for $4.6 billion in 2008.

Until next time…

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

Off Label Marketing by Pharmaceutical Companies was Pervasive in the early 2000s

Posted in BioBusiness

The pharmaceutical industry, not unlike all big business during the disastrous Bush Administration, was virtually unregulated. Bush and his cronies managed to accomplish this feat by destabilizing the US Food and Drug Administration (FDA) and essentially hamstringing any regulatory authority that it had. Not surprisingly, many pharmaceutical companies saw an opportunity to increase their bottom lines by engaging in off label marketing of many of their approved drugs—a practice clearly forbidden by the agency. 

Despite the fact that off label marketing is illegal, many big pharma companies knowingly and willfully engaged in the practice. Luckily, the Obama administration has reinvigorated and restored the regulatory powers at the agency and FDA is now aggressively investigating and punishing companies that had promoted off-label use of their products over the last decade.

The New York Times today reported that Novartis joins a growing list of pharmaceutical companies that have settled government investigations into health care fraud in the last few years, including Pfizer, which paid $2.3 billion; Eli Lilly, $1.4 billion; Allergan, $600 million; AstraZeneca, $520 million; Bristol-Myers Squibb, $515 million; and Forest Laboratories, $313 million. Pfizer, Lilly, Allergan and Forest pleaded guilty to crimes in the cases. The company was fined $422 million settle criminal and civil investigations into the marketing of the antiseizure medicine Trileptal and five other drugs. 

According to the article, the five other drugs involved in the civil settlement are Diovan, a hypertension drug that is the company’s top-selling product, at $6 billion last year; Sandostatin, a drug to treat a growth hormone disorder that had worldwide sales of $1.2 billion last year; Exforge, a hypertension drug that sold $671 million; Tekturna, a blood pressure medicine that sold $290 million; and Zelnorm, a medicine for irritable bowel syndrome and constipation that was later withdrawn from the United States market.

It is important to make a distinction between the practices of off-label drug use and off label marketing. As many of you may know, licensed US physicians are allowed to prescribe any FDA-approved drugs if they believe that their use will benefit patients. This is off-label drug use. However, in contrast, it is illegal for companies to actively promote or market approved drugs for therapeutic indications for which they have not received regulatory approval. This is off-label marketing and a strategy that has been used by companies to increase sales of approved products without having to spend money on expensive clinical trials that are required to prove safety and efficacy for a new drug to gain regulatory approval. While this may be a backdoor strategy for companies to boost product sales, it clearly puts patients at risk because the actual safety and efficacy for the indications has not been adequately tested and proven.

Many drug makers have been critical of FDA’s increase scrutiny of drug safety and have argued that it has negatively impacted the regulatory approval rates of new experimental medicines. While this may be troubling to many pharmaceutical executives, the FDA was created to insure that all approved drugs are safe and effective and the risk to Americans who use them is minimal. In other words, the agency is simply doing its job—something it was prevented from doing for the past eight years!

Until next time,

Good Luck and Good Job Hunting!!!!

 

Genzyme v. Icahn: Is Carl's Bark Worst than His Bite?

Posted in BioJobBuzz

Genzyme announced yesterday that it had reached an agreement with Carl Icahn to settle their very public and bitter proxy battle. As you may recall, Icahn, who controls approximately 4.9% of shares in Genzyme, sought to replace Henri A. Termeer, Genzyme’s embattled long-time CEO and three other company directors.

Under the terms of the agreement, Icahn will withdraw his slate of four nominees for the Genzyme board of directors and vote his shares in favor of two company nominees. Also, the Genzyme board will appoint two Icahn nominees Steven Burakoff, MD and Eric Ende, MD to serve as directors immediately following the company June 16, 2010 annual shareholders meeting. Dr. Burakoff is Professor of Medicine, Hematology and Medical Oncology at the Mount Sinai School of Medicine and Director of the Tisch Cancer Institute at the Mount Sinai Medical Center. Dr. Ende, a participant in the Icahn funds’ proxy solicitation, is a former biotechnology analyst with Merrill Lynch & Co. Inc.

This isn’t the first time that Icahn has threatened a proxy fight to get his nominees elected to the board of directors at companies where he controls a small but significant amount of outstanding shares of stock.  Previously, he attempted to wrest control of the Biogen and ImClone and Enzon Pharmaceuticals board of directors. While his attempt to commandeer the Biogen board failed, he was successful at ImClone, the maker of the anti-colon cancer drug Erbitux that he sold to Eli Lilly in 2008 for ca. $6.1 billion. In Enzon’s case, the CEO resigned about six months after accommodating Icahn’s demands.

It is patently obvious that biotechnology company executives don’t want Icahn to gain control of their companies. This is because once Icahn gains control of the companies he sells them to the highest bidder. While this may make sense to a financial guy like Carl, it doesn’t sit well with company executives who understand that they will likely lose their jobs once a company is sold! 

Although Carl’s public proxy contest strategy usually gets him most of what he wants, I am not sure that it is in the best interests of company stock price and shareholder. Publicly airing a company’s dirty laundry tends to reduce shareholder confidence and may push its stock price lower than necessary. I think that it may be in a company’s best interest to quietly negotiate with Icahn behind the scenes rather than take the fight to the public. In the end, Icahn invariably wins and the management team that is under fire may look less competent or weaker than it actually is. Biogen ultimately won but Enzon and Genzyme lost the public opinion battle.

Until next time…

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

 

Beleaguered Medical Device Manufacturer Boston Scientific Announces Job Cuts

Posted in BioJobBuzz

Things are just not going well for Natick, MA-based device manufacturer Boston Scientific. Yesterday, the company announced that it lost $1.1 billion in the fourth quarter this year. The losses mainly stem from the company’s $1.73 billion settlement earlier this month with Johnson & Johnson ending a seven year patent dispute over drug-coated cardiovascular stents. Also, Boston Scientifics’ ill-advised purchase of medical device rival Guidant for $27 billion several years ago hasn’t helped matters.

The company said that it would cut as many as 1,300 jobs or 8 to 10 percent of its workforce to reduce operating expenses. Boston Scientifics’ decision to eliminate jobs follows similar moves made by several of its competitors last year. For example, last spring Medtronic, the largest device firm in the world, said it would eliminate at least 1,500 workers. In August, Minnesota rival St. Jude Medical eliminated 200 positions.

Device makers have seen their sales squeezed by safety recalls of top-selling products and cost cutting measures at hospitals because of the economic downturn. Also, new data suggest that drug-coated stents may not offer the benefits (over bare-metal stents) as previously thought. In fact, some physicians are beginning to reconsider the advantages of stents as compared with other surgical or pharmacologic interventions for certain cardiac patients.

While layoffs at medical devices manufacturers don’t come close to the massive layoffs in the pharmaceutical sector, don’t be surprised if other device manufacturers announce layoffs later this year.

Until next time…

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

 

Another Pharmaceutical Company Settles Illegal Marketing and Promotion Lawsuits

Posted in BioBusiness

The New York Times reported today that AstraZeneca has agreed to pay $520 million to settle two federal investigations and two whistle blower lawsuits over the sale, marketing and off-label promotion of its blockbuster antipsychotic drug Seroquel. Despite this settlement, UK-based AstraZeneca still must contend with 14,444 civil lawsuits filed by many patients who developed diabetes and other health related conditions because of misleading marketing that failed to adequately disclose that the drug caused abnormal weight gain.                     

AstraZeneca joins a growing list of pharmaceutical companies that have been penalized for off label promotion and misleading advertising. Earlier this year Eli Lilly & Co paid $1.4 billion over its marketing of another antipsychotic drug Zyprexa and Pfizer announced that it would pay $2.3 billion including a record-breaking criminal fine of $1.195 billion mostly for its painkiller Bextra which was withdrawn from the market.

Despite the size of the fines and settlement figures for these recent cases, they are a drop in the bucket when compared with the amount of money generated by illicit marketing and advertising. For example, the $520 million that AstraZeneca has agreed to pay to settle the Seroquel case pales in comparison to the $17 billion that the drug has generated in US sales since 2004. The same was true for Zyprexa and Bextra.

While these settlements cannot repair much of the damage that has been done to unknowing patients, it signals that the US government is beginning to live up to its pledge to provide safe and efficacious medicines to the American public.

Until next time…

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

 

Johnson & Johnson Settles Its Trademark Dispute With the Red Cross

Posted in Career Advice

You may recall that last August, Johnson & Johnson sued the Red Cross for inappropriate use of its symbol —the red cross—that has universally become associated with the non-profit relief agency. that they reached a settlement in the dispute over the mark. Not surprisingly, a settlement was reached shortly after a judge threw out much of J &J’s trademark claim against the Red Cross. Of course, as it typically in these cases, the terms of the settlement were not disclosed.

J & J brought the suit against the Red Cross, because, starting in 2004, the Red Cross started licensing the symbol to other companies for use on commercial items sold in stores as part of the organization’s fund-raising program. J& J argued that the organization had promised not to engage in certain commercial activity—a part of the original trademark agreement that was struck between the drugmaker and relief agency almost 100 years ago. However, the judge presiding over the case ruled that Congressional charter gave the Red Cross the right to use the symbol even for business purposes.

Although J & J looked incredibly avaricious and took a PR hit by suing the Red Cross for trademark infringement, the company claimed that it had the right to vigorously protect its trademarks—after all, business is business. However, as several patent and trademark attorneys have repeatedly told me, it is advisable to settle or reach an agreement before any case goes to trial—you just never know what a judge is going to rule even if you think that you have a rock-solid claim! I guess J & J needs to hire some new attorneys!

Until next time…

Good Luck and Good Job Hunting!!!!!