Bureaucratic Shakeup and More Layoffs at Merck?

Posted in BioBusiness

The Twitterverse was buzzing with activity late last week about a possible shakeup at Merck as Roger Perlmutter takes control as its new head of R&D.  As many of you may know, Perlmutter used to work at Merck but left to become Amgen’s Executive VP of R&D when Peter Kim, the now former Head of Merck’s R&D, was hired several years

Kim’s tenure at Merck was rife with missteps, misdirection and drug approval failures. So, when Amgen replaced its CEO and Merck fired Kim, Perlmutter saw an opportunity to return to the fold with Merck now under the tutelage of CEO Ken Frazier (the man who engineered the company’s Vioxx legal strategy).

Fierce Biotech substantiated the Twitter rumors that a major shakeup may be underway at Merck. According to an article published early on Friday, a Merck spokesperson confirmed that Perlmutter is indeed shaking things up and reorganizing Merck’s R&D infrastructure.

The spokesperson said

“I can confirm that some members of management, but not all Franchise leadership, are leaving the company but are working to ensure a smooth transition.”

The departure of several senior leaders was later confirmed by the Wall Street Journal.  While not confirmed, rumors suggested that Rupert Vessey will lead Merck’s Discovery and Early Development programs.

While Merck spends close to $8 billion annually on R&D, its late stage development pipeline is thin and Perlmutter was hired to strengthen it. Changes at the top usually mean that other changes will take place among the rank and file. That said, stay tuned for possible additional layoffs among Merck R&D personnel.

Until next time….

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

A Commentary: Pharma's Ongoing PR Problem

Posted in BioBusiness

Not a day goes by without some report about pharma’s ongoing problems with illegal drug promotions, class action suits against blockbuster medications or civil or criminal settlements with state and federal governments. A quick perusal of articles posted to the Pharmalot Blog in November alone revealed no fewer than eight big pharma companies including Lilly, Merck, GlaxoSmithKline, Bayer, Pfizer, Novartis and Amgen that were involved in some sort of legal action regarding inappropriate marketing claims or failure to disclose potential side effects of blockbuster drugs. To make matters worse, a larger than usual number of pharma companies have experienced manufacturing problems that have resulted in drug recalls or shortages. This list includes companies such as Genzyme, Baxter, Johnson & Johnson, GlaxoSmithKline and most recently Boehringer Ingelheim. While chronic legal and manufacturing problems are extremely troubling (some assert it is just the cost of doing “business”), I believe that the amount of money spent lobbying Congress for legislation favorable to the industry is even more egregious.

According to a recent post on Knowledge Ecology International, the pharma industry has so far spent $115,571,832 on lobbying in 2011 (this number is sure to go higher by the end of this fiscal year). Interestingly, the biggest year for pharmaceutical industry lobbying was in 2009—a year after the Affordable Health Care Bill was passed—with totals in excess of $186,000,000. Just think about how many jobs could have been saved if companies reinvested the money into R&D rather than greasing the palms of lobbyists to induce Congress to pass laws to continue to get favorable tax rates, improve ROI and bolster the stock prices of those companies! To wit, Newt Gingrich, a Republican Presidential candidate and Former Speaker of the House has been accused of lobbying former congressional colleagues to vote for a Medicare drug subsidy while he was a paid consultant to AstraZeneca. Gingrich vehemently denies these allegations; probably because he realizes that most Americans don’t like big pharma and may vote against him if the claims are proven to be true and he wins the Republican presidential nomination.

Not withstanding the legal issues and unnecessary lobbying, what is really hurting the pharmaceutical industry is its lack of communication and transparency with patients and its unfailing practice of putting profits before healthcare. While every big pharma company I know always talks about fulfilling unmet medical needs, meeting those needs always comes at great costs (literally) to patients. Sadly, many patients can no longer afford the costs of potentially lifesaving medicines and treatments. Unless pharma begins to change the way it presents itself to the American public, it will continue to suffer the lost of confidence and trust of the American people. And, if the industry is unable to regain the public’s trust, its inability  will ultimately result in legislation that allows the US government to control drug prices: something that exists in most other countries in the world and big pharma has been desperately trying to prevent for the past 50 years!

Until next time…

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

 

The Number of Prescription Drug Recalls Continues to Rise

Posted in BioBusiness

Last week, I reported in a post that in 2011 the US Food and Drug Administration (FDA) had approved a near-record of 35 new medicines. Coincidentally, earlier this week, Ed Silverman posted on the Pharmalot blog that prescription drug recalls are rising and nearing historical records. 

According to Ed, “During the third quarter of this year, the number of pharmaceutical recalls jumped to 150, compared with about 90 recalls during each of the first two quarters of 2011, according to FDA Enforcement Reports. Moreover, the recent tally dwarfs the roughly 65 recalls that were made during the last quarter of 2010 and nearly doubled the 80 recalls that were notched during the 2010 third quarter.”

The reason for the spike in drug recalls? Some suggest that FDA is getting tough and still trying to reinvent itself after the 2004 Vioxx debacle and the tainted heparin incident. Also, Congress is putting pressure on the agency to better enforce manufacturing regulation and supply chain management practices. Sadly, the only way for FDA to accomplish this is by increasing the number of inspections that it conducts on both foreign and domestic manufacturing facilities. And, given that the agency’s budget for enforcement activities has not increased much over the past few years; it is unlikely that increased regulatory scrutiny will occur any time soon.

Finally, for those of you who may not know. FDA does not have the authority to recall drugs. Recalls are voluntary and must be orchestrated by the company that manufactures the product in question. Luckily, FDA has many financial and legal methods at its disposal to induce companies to “voluntarily” recall suspect or tainted products from the US market.

Until next time…

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

 

Merck Taps Ken Frazier as Its New CEO–The First African American to Lead a Major Pharmaceutical Company

Posted in BioBusiness

Merck has finally gone where no pharmaceutical company has ever gone before; it today named Ken Frazier, a Harvard-trained African American lawyer as its next CEO. Frazier, who joined Merck in 1992, became general counsel in 1992 and was promoted to President of Global Human  Health last April will succeed Dick Clark (the other one) who will soon reach Merck’s mandatory retirement age of 65. Frazier has always been something of a rising star and his stock (pun intended) has rapidly risen in recent years mainly because of the prominent role he played in managing the fallout from the Vioxx scandal.

While today’s announcement may have been history making, Frazier’s ascension to the top position at Merck was widely expected. Frazier has played a key role in the integration of Schering Plough, which Merck purchased almost two years ago for $42 billion.

Like Clark, Frazier is not a scientist. Given Merck’s thinning pipeline and recent setbacks with its anti-cervical cancer vaccine Gardasil, Frazier, like Clark will have his work cut out for him to restore Merck’s tarnished image to its once impeccable standing in the pharmaceutical industry.

Until next time…

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

 

Pfizer Survey: Physicians Favor Using an Electronic Health Records System to Report Adverse Events

Posted in Social Media

I realize that I have been blogging about adverse events for the past couple of day but, let’s face it; the pharmaceutical industry lives or dies by the number of adverse events (AEs) that are reported for approved and marketed drugs. In any event, I came upon an interesting post in a Pharmaceutical Processing e-blast about the results of a survey  (conducted by Pfizer) which revealed that physicians are more likely to report side effects and adverse events through an electronic health records (EHR) system as compared with traditional paper methods. Nearly 60 percent of the 300 physicians who responded to the survey also agreed that AE reporting through an EHR would improve patient care.

While the results of the survey are not surprising (to me anyway), they suggest that the use of electronic methods for adverse events reporting may be a boon to drug manufacturers that are required (by FDA and other regulatory agencies) to collect information regarding the safety and tolerability of approved and marketed drugs.

In a previous post, I opined that social media would be an ideal platform for AE reporting. The results of the Pfizer survey tend to support this supposition. While EHR aren’t exactly social media, they are electronic and, it appears to me (based on Pfizer survey results), that healthcare providers and consumers may be more likely to report potential AEs using electronic as compared with conventional methods. Put simply, electronic reporting is much simpler, quicker and more facile than the current pen and paper model for AE reporting. And, in today’s rapidly paced and hectic world, time savings can translate into cost savings and improved efficiencies.

Paradoxically, the Pfizer survey results tend to contradict the notion that social media would be a bane to AE reporting for most drug makers. As I mentioned yesterday, many drug makers who have almost universally shunned social media, contend that the use of social media would overburden their AE reporting systems and possibly put them at enormous legal and regulatory risk. However, as I pointed out many times in the past, AEs are an expected reality in the pharmaceutical, biotechnology and medical devices industries. And, while drug makers are deathly afraid of AEs and reluctant to learn of them, the more information this is available about potential safety and tolerability issues, the better off most drug manufacturers may be. For example, if Merck was alerted earlier about the cardiovascular problems that Vioxx patients were experiencing, then possibly fewer patients may have been affected and harmed and perhaps, an improved version of Vioxx, an effective pain medication, might still be availability to patients who benefit from it.

To that end, providing physicians, healthcare workers and consumers with an accessible e-based AE reporting system built around social media would allow drug makers to quickly determine whether or not one of their drugs exhibits tolerability or safety issues that might warrant further investigation.  And, I believe that putting the appropriate social media AE reporting systems in place would allow drug and device manufacturers to monitor the performance of their products in real time and more accurately monitor, collect and analyze safety and tolerability data for certain drugs. This, in turn, would likely lead to the development of improved safer and more effective medications and devices, lower drug development and manufacturing costs and ultimately reduce drug makers’ exposure to legal and regulatory actions.

Until next time…

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

 

The Merck-Schering Plough Deal: More Bad News for New Jersey

Posted in BioJobBuzz

Merck announced today that it was buying Schering Plough, the Kenilworth-New Jersey based drug maker, for $41.1 billion. The deal comes only six weeks after Pfizer said that it would purchase NJ-based Wyeth Pharmaceuticals. Superficially, the deal may make sense for the two struggling drug makers—they co-market the cholesterol-lowering drug Vytorin and also have collaborations in the respiratory diseases area. Also, Schering Plough has the European rights to the anti-arthritis drug Remicade and its 2007 purchase of the Dutch biopharmaceutical company Organon Biosciences NV provides access to several potential biotechnology drugs. Nevertheless, the impending merger will ultimately result in job losses and higher unemployment in the state of New Jersey.

Merck currently employs 55,200 workers and Schering-Plough—which grew significantly with its purchase of Organon—also has about 55,000 employees. While no immediate job cuts are planned, a company spokesperson acknowledged that the size of the combined workforce will be reduced by approximately 15%-20% over the next year or so. This means that as many as 20,000 pharmaceutical employees may lose their jobs—a time when unemployment in NJ is approaching 10 percent! My sources tell me that Merck employees are already on edge because of surprise layoffs that occurred in early September, 2008. I suspect that employee anxiety will be extremely high at both companies for the foreseeable future—never a good thing from a productivity point of view.

According to press releases, Schering-Plough’s shareholders will get $10.50 in cash and 0.5767 Merck shares for each Schering-Plough share they own. That’s a 34 percent premium to Schering-Plough’s closing stock price on Friday. Merck’s top executive, Chairman and CEO Richard Clark, will lead the combined company, which will attempt to remain a dominant player in treatment areas including cholesterol, respiratory, infectious disease and women’s drugs, as well as vaccines. Schering-Plough’s CEO, Fred Hassan, will participate in planning integration of the two companies until the close of the deal, which is expected in the fourth quarter. The transaction is to be structured as a reverse merger. Schering-Plough will be the surviving corporation but will take the name Merck. The new company will remain at Merck’s headquarters in Whitehouse Station, N.J. and a company spokesperson indicated that a "substantial majority" of employees of Schering-Plough will remain with the newly-formed company. The combined revenue of both companies in 2008 was $47 billion.

Mr. Hassan, a talented, “turn-around” pharmaceutical executive, took over Schering-Plough six years ago as chairman and CEO—a time when the company was struggling with a $500 million fine (the largest ever at the time) imposed by the US Food and Drug Administration because of chronic manufacturing problems. While Schering-Plough is now in much better financial shape than when Mr. Hassan first arrived at the company, its stock price is currently almost identical to the price when he took over (it lost 50% of its value in the past 18 months). Let’s see whether or not Richard Clark, Merck’s current Chairman and CEO, has the mettle to run the combined company. While Schering-Plough has long been rumored to be a takeover target, I don’t think that the Merck-Schering Plough deal is a particularly good or strategic one. Both companies have been struggling of late because of near empty drug pipelines and the ongoing brouhaha over Zetia, Vytorin and Merck’s Vioxx. Further, both companies face price reductions and slumping sales in the next year or so because several blockbuster drugs will lose patent protection and face stiff competition from generic drug manufacturers.

Like the Pfizer-Wyeth deal, the Merck-Schering Plough merger may little more than a red herring. I still fail to see how merging two oversized, struggling pharmaceutical companies can possibly result in the creation of a single successful one. The only upside of the deal is that it allows the newly-formed company to restructure operations, eliminate tens of thousands of jobs and cut costs to bolster its stock share price. That said, I don’t think that an artificially-inflated stock share price necessarily translates into the innovation that historically has been required to create new drugs to treat unmet medical needs!

Until next time…

Good Luck and Good Job Hunting (avoid NJ at all costs)!!!!!!!

 

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JAMA Ghostwriting Controversy Forces FDA to Reconsider New Off Label Promotion Rule Changes

Posted in Career Advice

As I mentioned in a post about a month or so ago, the US Food and Drug Administration (FDA) floated a proposal to ease the rules regarding promotion of off-label use of previously approved drugs. According to the newly proposed rules, FDA would allow drug makers to provide physicians with reprints of journal articles that conspicuously promote off-label uses for previously approved products. At present, drug companies are strictly forbidden to promote off-label use of their products.  A major proviso of the proposed rule changes is that the articles/reprints must be published in peer reviewed medical journals before they can be disseminated to physicians and other healthcare professionals. Apparently, FDA officials believe that peer review can take the place of the rigorous regulations and requirements that are currently in place for US approval of drugs, biologics and medical devices!

For those of you who don’t know, an editorial appeared in last week’sJournal of the American Medical Association (JAMA) that took drug maker Merck to task for using alleged ghostwriters and ghost authors on clinical studies that were published about it painkiller Vioxx. As you all know, Merck voluntarily took Vioxx off the market in 2004 after it was revealed that the drug could lead to increased risk of heart attack and stroke.

The incendiary firestorm that has ensued since the appearance of the  Although I believe that the practices of ghostwriting and ghost authoring are not as widespread as the JAMA authors would like you to believe, I think that it is a good thing that FDA may scuttle its proposed new off-label drug promotion rules.

In my opinion (humble or otherwise), drug makers MUST be required to prove that off-label uses of previously approved products  don’t pose any serious safety or health risks before companies are allowed to promote them for new indications. As we have seen time and again in recent years, safety issues and serious health risks can arise for drugs even though they received FDA approval. With this in mind I ask: “Why would FDA allow drug makers to provide less rigorous proof for an off-label indication than that required for approval of the intended use of the original product?”  It makes little sense to me. However, looking more closely at the proposed rule changes,  it would obviate the need for companies to spend additional monies (possibly hundreds of millions) to garner FDA approval for a new product indication.  Hmmm….maybe I am beginning to see a pattern here!!!!!!!

Until next time….

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

Merck's Vioxx Legal Strategy Benefits its CEO

Posted in BioJobBuzz

Merck’s CEO, Dick Clark (maybe he should go by Richard?), seemingly had his work cut out for him when he assumed leadership of the company in May, 2005. At that time, Merck had withdrawn Vioxx from the market, its stock price had plummeted and the company was being sued by tens of thousands of people.  Thanks to the launch of several new products, including Vytorin and Gardasil, a brilliantly-conceived Vioxx legal strategy which resulted in a $4.85 billion settlement for much of the litigation, Merck‘s stock price is soaring and has been able to restore some of its former glory.

As a reward for his dedication and hard work, Mr. Clark received $14.7 million in 2007–an 80% increase over his 2006 compensation package. Don’t get me wrong; I am sure that he is a very talented, hard working guy who deserves every penny of his 2007 compensation package for bringing Merck back from the “dead”. That said, I can’t help but wonder what ex-Merck employees, who lost their jobs because of the Vioxx debacle, think about Mr. Clark’s compensation package. Given the growing paucity of pharmaceutical and biotechnology jobs in NJ, I suspect that some of them could use a little extra cash right about now!

Until next time….

Good Luck and Good Job Hunting (try Merck they gotta be hiring)!!!!!!!!

Not So Fast: Plaintiff Lawyers Seek to Alter Merck's Vioxx Settlement

Posted in Career Advice

Several lawyers representing people who sued Merck over Vioxx asked the federal judge overseeing the $4.85 billion Vioxx settlement for the freedom to keep some of their clients outside of the settlement while allowing others to accept it. Currently, it is an all or nothing deal—if the lawyers want any clients to receive money from the settlement they must recommend the deal to all of their clients. This was a crucial part of the settlement offered by Merck. A Merck lawyer said that the company will oppose the motion and that the settlement had been carefully devised to be fair to plaintiffs and the company. For the deal to take effect, 85% of all plaintiffs must agree to all terms of the settlement.

The emergency motion may have been prompted by the recent firestorm surrounding Merck’s cholesterol-lowering drug Zetia. Maybe the lawyers think that renewed questions about Merck’s ongoing reluctance to release pertinent safety information about its products may induce juries to render positive verdicts in certain jury trials involving patients who took Vioxx continuously for more than a year. That said, about 18 Vioxx cases have been tried and the plaintiffs have lost most of them. Nevertheless, as the old adage goes: “It never hurts to ask.”

Merck is certainly in the hot seat today and right before the holidays too!!!!!!!  

Until next time…

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

Oops….Merck Fails to Meet Wall Street Expectations

Posted in BioJobBuzz

The New York Times reports today that Merck’s profit forecasts for this year and next fell a penny short of Wall Street expectations sending its shares lower. Ah, what a difference a penny can make!

The company’s stock price has risen, trading in recent days near its 52-week high of $60.49 after it announced less than one month ago it would pay $4.85 billion to settle tens of thousands of lawsuits stemming from its painkiller Vioxx, which it withdrew from the market in 2004.

Merck said that while it expected higher sales of its cervical cancer-fighting vaccine Gardasil, its diabetes treatment Januvia and its allergy treatment Singulair next year, generic competition would drive down sales of another top seller, Fosamax, an osteoporosis treatment.

Aside from Vioxx debacle, Merck has been on somewhat of a roll for the past three years. It was able to bolster its stock price during this time by instituting a cost-cutting plan that included draconian-like job cuts in 2005. Merck, which has already cut about 6,000 jobs under the plan, said yesterday that it would reach its target of eliminating 7,000 positions by the end of 2008.

This coupled with the recent layoffs at Bristol-Myers Squibb, Novartis, Johnson and Johnson suggest that now is not a good time to be looking for pharmaceutical or biotechnology jobs in New Jersey.

Until next time….

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