Europe's drug bills piling up for Chicago pharmas

While many Chicago-area CEOs are grappling with slow sales in Europe, the downturn has caught AbbVie Inc.'s Richard Gonzalez holding a bag of accounts receivable worth nearly $800 million from cash-strapped governments.
Companies including McDonald's Corp. and United Continental Holdings Inc. have seen European revenues tumble during the recession, the longest since World War II. But Abbott Laboratories, its AbbVie spinoff, Baxter International Inc. and Hospira Inc. also are contending with a mounting pile of unpaid bills for drugs they've already sold.

The big four local pharmaceutical firms are owed a total of $1.76 billion from Europe's four most desperate economies—Portugal, Italy, Greece and Spain—as of June 30, according to filings with the Securities and Exchange Commission.

http://www.chicagobusiness.com/article/20130831/ISSUE01/308319974/europes-drug-bills-piling-up-for-chicago-pharmas?

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China probes of Glaxo, Sanofi, others put big chill on key growth market Ipsen CEO says doctors don't even want to meet with sales reps

Read more: China probes of Glaxo, Sanofi, others put big chill on key growth market - FiercePharma http://www.fiercepharma.com/story/china-probes-glaxo-sanofi-others-put-big-chill-key-growth-market/2013-08-30#ixzz2dV7umhMe
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Hundreds of Fosamax lawsuits vs. Merck ordered readied for trial

Aug 30 (Reuters) - A federal judge overseeing consolidated litigation against Merck & Co over jaw injuries allegedly caused by the osteoporosis drug Fosamax has ordered hundreds of cases be dispersed to courts across the country for trial.

The decision by U.S. District Judge John Keenan in Manhattan marks an unusual and potentially costly development for Merck.

Companies often find it easier to reach settlements in mass tort cases that are consolidated before one judge.

"It's a big deal as it changes the cost paradigm for Merck exponentially," said Timothy O'Brien, a partner at Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor and lawyer representing Fosamax plaintiffs.

The judge's order Thursday requires that 200 cases per month be sent to back to courts where they were initially filed, beginning with the oldest ones.

Lainie Keller, a spokeswoman for Merck, said the company "is committed to defending its conduct in regard to Fosamax and has confidence in its defense strategy that has had so much success in the courts."

The cases before Keenan comprised roughly one-fifth of the 5,075 lawsuits pending nationally in federal and state courts related to Fosamax, a one-time blockbuster medication.

Lawsuits alleging that plaintiffs developed osteonecrosis of the jaw from Fosamax were consolidated before Keenan in 2006.

The judge conducted a series of "bellwether" trials, allowing the parties to assess trends and outcomes in similar cases. A series of wins for plaintiffs, for example, can put them in a better position for settlement talks.

The final Fosamax bellwether trial before Keenan ended in February with a $285,000 verdict for plaintiff Rhoda Scheinberg.

Merck lost just one other of the five bellwether trials before Keenan, when a jury in 2010 awarded Florida resident Shirley Boles $8 million, a sum the judge reduced to $1.5 million.

Keenan's order on Friday came after mediation to resolve 370 cases broke down two weeks ago. O'Brien's law firm and another firm represented plaintiffs in those cases.

Another 104 lawsuits brought by another firm could have been added to the talks if a deal on value was reached, O'Brien said.

Lawyers for the plaintiffs had sought to have 300 cases transferred every four months, while Merck sought to have just 100 cases scheduled for discovery over a six-month period.

Merck has benefited from having the litigation consolidated.

Keenan had thrown out 430 cases after he issued an order last November, which Merck had sought, requiring them to put forth expert reports showing scientific proof of their claims.

But in his order Friday, Keenan said Merck's latest proposal would "unnecessarily prolong" the proceedings before him.

Keenan ordered plaintiffs to recommend by Oct. 11 where to sent the first batch of cases.

An order moving so many personal injury cases home at once is rare, O'Brien said. He noted that Merck reached a $4.85 billion settlement with over the painkiller Vioxx in 2007 only after a federal judge threatened a similar order.

"I anticipate Merck will continue talking and seek to resolve the cases," O'Brien said. "The opportunity is there."

The case is In Re Fosamax Products Liability Litigation, U.S. District Court, Southern District of New York, No. 06-md-01789.

http://www.reuters.com/article/2013/08/30/merck-fosamax-idUSL2N0GV1UI20130830?rpc=401

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How much Tylenol is too much?

http://www.columbiamissourian.com/a/165009/johnson-johnson-launches-new-cap-to-curb-tylenol-overdoses/?

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Pill Pop Culture - Big Pharma might sue over Tee Shirts

The Xanax, Adderall and Vicodin shirts are a ‘parody of pop culture,’ designer Brian Lichtenberg said in a release.

These shirts are not what the doctor ordered.

T-shirts being sold at Kitson, a Los Angeles-based fashion chain, have sparked outrage among consumers and drug companies alike, and some are considering taking legal action.

Designer Brian Lichtenberg's line of black and white tees have the words "Xanax," "Adderall" and "Vicodin" written across the back in block letters resembling the last name on a football jersey. While Lichtenberg said the “designer drug collection” reflects what he sees in society, opponents say they are disrespectful and insulting.

The makers of the drugs aren’t happy about the clothes, either. AbbVie, Shire and Pfizer, the pharmaceutical companies that make Vicodin, Adderall and Xanax respectively, all told the Daily News that they had no part in the development of the shirts and that their brands were used without permission.

Read more: http://www.nydailynews.com/life-style/health/drugmakers-sue-adderall-vicodin-xanax-shirts-article-1.1440876#ixzz2dR9wE22D

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Health experts critical of pharma industry's new transparency rules

The European pharmaceutical industry association EFPIA has published new ethical commitments on clinical trials aimed at allaying accusations that a lack of transparency on how new drugs are tested is hurting patients. Critics however are unconvinced.

Speaking on Tuesday (27 August), the director of EFPIA, Richard Bergström, said the industry's new ethical commitments were aimed at preventing public health problems down the line.

The commitments include improving data sharing with researchers, enhancing public access to clinical study information, sharing results with patients who participate in clinical trials, certifying producers for sharing clinical trial information and publishing clinical trial results.

However, Bergström warned that full transparency would hurt the industry, which relies on protection of trade secrets to compete in Europe and across the world.

"We don’t want our competitors to learn too quickly about how we go about the clinical trials. We believe that a framework which is run by the industry itself is much more likely to take care of these balances," Bergström told a panel debate organised by EFPIA in Brussels.

"Maybe we have come slowly to this debate – both the regulators and the industry – but we’re doing this now. We’re opening this up, sharing much more information. This commitment is about doing that big time. Maybe we could have done this a year ago or two years ago, but nevertheless, it’s not too late," Bergström stated.

More demands

The pharmaceutical industry has come under fire over recent years over lack of transparency on clinical trials. Those accusations were epitomised in a book entitled Bad Pharma by Ben Goldacre, a research fellow of epidemiology at the London School of Hygiene and Tropical Medicine, and a co-founder of the transparency campaign All Trials.

In Bad Pharma, Goldacre argues that medicines currently on the market were usually tested using techniques that exaggerate the benefits of treatment, therefore producing results that systematically favour the manufacturer. And when trials produce results that companies don't like, they are perfectly entitled to hide them from doctors and patients, so the public only ever sees a distorted picture of any drug's true effects.

Speaking at the EFPIA event, Goldacre explained his grievances. "I co-founded a campaign called All Trials which now has the support of over 50,000 individuals, faculties and societies from Europe and the US. And we ask for three things: That all trials, including retrospectively, are registered so that we can see what happened, that summary results are made available and that the clinical study report is made available so that we can see exactly what was done in the trial," Goldacre said.

"It’s important that we do get hold of clinical study reports because there can often be methodological shortcomings in the design of the trial which means that it’s no longer quite such a fair test, as one might think, which are glossed over in the brief reports in academic journals or a regulator website," he continued.

“We don’t have any of the things that I just set out,” Goldacre said adding that presumably only around half of the clinical trials that are being done today are being registered, and positive results are twice as likely to be registered.

Benefits and risks

In May, The European Parliament's environment and public health committee gave unanimous backing to proposed new EU rules on clinical trials aimed at simplifying and harmonising rules that will encourage research while keeping patients safe.

>> Read: MEPs give resounding ‘yes’ to new clinical trial rules

Hans-Georg Eichler, senior medical officer at the European Medicines Agency (EMA), which supervises drug approvals in Europe, said that opening up clinical trial data could provide major benefits for the industry, making it a lot more efficient than it is today. According to him, the biggest risk in the regulatory debate is violation of patient confidentiality, not pharma trade secrets.

"I have never heard anyone in this debate saying that we want to give our patients identities. That’s a no brainer, but how do we achieve it? It’s a technical debate that we all have to have the next year about how to address it in the best possible way," Eichler said.

On transparency, Goldacre said EFPIA's new commitments didn't go far enough as they would only cover new clinical trials.

"The one thing that would fix all of this is retrospective access. So we need access, I would say going back two decades to look at the error of approval for current prescribed medications. We need to go back two decades for all clinical trials for all prescribed treatments. We need them registered, we need summary results and we need an appropriately reacted clinical study report," the researcher said.

"And I don’t think there’s any ethical argument against that. Patients are harmed if we fail to do this," Goldacre stressed.

Susanna Palkonen, vice president of the European Patient's Forum, agreed saying it is vital that both clinicians and patients have access to all relevant information to make informed decisions about the drugs they use.

>> Want to express your opinion on the EU's clinical trials directive review? Please log in to our special WikiDossier page (Beta phase).

http://www.euractiv.com/health/health-experts-critical-pharma-i-news-529991?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=EurActivRSS

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Idaho gets $28 million in drug price case

BOISE, Idaho (AP) — Idaho's lawsuit against several major pharmaceutical companies over allegations of inflated drug prices has come to an end with the state recovering more than $28 million in damages.

Attorney General Lawrence Wasden announced Tuesday that his office has completed six years of litigation against Watson Pharmaceuticals, Johnson & Johnson, Merck and 30 other pharmaceutical companies. Idaho was one of several states who sued the drug makers, alleging that they falsely reported the "average wholesale prices" of individual prescription drugs, and as a result, hiked the price that Medicaid had to pay for the drugs.

Idaho Medicaid reimburses pharmacies for the "estimated acquisition cost" of the drug, plus a dispensing fee. Until July 2011, Idaho Medicaid based that estimated cost on the average wholesale price as reported by drug manufacturers. But Wasden said the drug companies were giving phony average wholesale prices far above the actual average price. The Idaho Attorney General's office reported that in 2003, Watson Pharmaceuticals Inc. reported an average wholesale price that was 1534 percent greater than the actual average wholesale price for a generic epilepsy drug.

"In negotiating these settlements, we tried to look forward as well as backward," Wasden said in a prepared statement. "We recovered a significant amount of money to compensate the state for past practices. But equally as important, the state will receive pricing data from these companies going forward. That element of the settlements will help protect the taxpayers from future pricing abuses."

Because Idaho gets about 70 percent of its Medicaid funding from the federal government, it is required to return a share of the recovered money to the federal government. As a result, about $13.5 million has been returned in the form of credits against future payments to Idaho Medicaid. Idaho's share of the money, more than $7 million, was put into the general fund for appropriation by the Legislature. The rest of the money went to cover the costs of the investigations and litigation.

http://news.investors.com/newsfeed-ap/082813-459618-idaho-gets-28-million-in-drug-price-case.aspx?

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GlaxoChinaGate contd. - Behind the China Bribery Scandals

By Adeline Siew, Editor, Pharmaceutical Executive Europe.

The last few weeks have seen the media swamped with stories about the rampant bribery clawing the pharmaceutical industry in China. Big names were engulfed in the scandal, including GSK, AstraZeneca, Sanofi, Novartis, Eli Lilly, Novo Nordisk and UCB amongst others.

Last month, four GSK executives were put under investigation for allegedly paying up to $480 million to doctors, hospital administrators, government officials and medical groups to promote the use of its medications. The limelight then shifted to Sanofi when some of its employees were accused of paying bribes totaling up to $280,000 to more than 500 Chinese doctors across 79 hospitals six years ago. The newspapers also alleged that Sanofi paid doctors 80 yuan each time a patient bought its products, with the largest payment said to be 11,200 yuan.

Novartis has also fallen prey to bribery allegations in China. The Swiss drug maker was accused of paying doctors $8000 to prescribe its cancer drug, Sandostatin LAR. Sales figures were expected to increase in June and July this year as a result. Eli Lilly is now the latest being investigated after a former employee alleged in a report that the company spent more than $490,000 to bribe doctors in China. The former sales manager said that Eli Lilly offered kickbacks to ensure doctors used its drugs, including its insulin brand.

According to reports from the official Xinhua news agency, the severity of these incidents has prompted further investigation by the State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, which aims to stamp out bribery, fraud and other anti-competitive practices in various sectors. The National Development and Reform Commission (NDRC) and the police have already started investigations on how foreign and domestic companies conduct their businesses in China.

The BBC reported that it is common for pharmaceutical sales representatives to bribe in order to increase product sales. In fact, a salesman told the BBC that his company offered approximately $1000 to have its product placed back on the shelves of one hospital. The product was discontinued at the hospital and to have it back on the shelves, the company would have to go through complicated procedures that would cost significant amount of money and energy, hence, an easier alternative was used. The company paid a bribe to ensure that the product returned to the hospital’s shelves as it would have cost a lot more to achieve the same results through official routes.

China ranks high when it comes to corruption and the bribery scandal is said to be fuelled by the country’s dysfunctional healthcare system. Doctors, nurses and hospital administrators are so poorly paid that they are easily tempted to accept money from drug suppliers. Moreover, as hospital staffs, doctors in China are not allowed to take on second jobs to increase their income.

“Physicians are way underpaid and they need to find a way to survive,” said Gordon Liu, a healthcare economist at Peking University’s Guanghua School of Management, in a press release. Under the current healthcare system, it costs as little as $1.25 to see an oncologist or other specialists and the monthly pay of an experience physician is typically $980.

It is common practice for doctors and hospital employees to accept money to provide better services or move patients up waiting lists for surgery. Hence, it should come as no surprise that doctors and hospital administrators take kickbacks from pharmaceutical companies to use more expensive drugs or prescribe them more often.

Many believe that the bribery scandal involving Big Pharma is just the tip of the iceberg to the many problems in China. The fight against corruption in China’s healthcare industry has begun but it will be a long and hard one. The government is striving to increase access of medicines while tightening its healthcare budgets and as a result, Chinese regulators are now investigating pricing policies of many foreign and domestic pharmaceutical companies. China, once viewed as a favourable emerging market for the industry, may not live up to pharma’s expectations after all.

http://blog.pharmexec.com/2013/08/28/behind-the-china-bribery-scandals/?

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I thought this was a joke

..... until I saw this:
http://www.18again.com/

Rebranded and repriced!

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The Sunshine Act Makes for Gloomy Sales Reps

On Café Pharma message boards, the drug industry’s online water cooler, anonymous sales reps are sounding off on the Physician Payment Sunshine Act and its implications for their battered profession. Here’s a selection from a thread that PharmExec came across, edited for spelling, punctuation, and coherence:

“It’s been talked about for the last couple of years. Now that it’s finally here, what are your [physician] offices actually saying? Are you still going to bother with lunches?”

“Offices will start canceling all lunches. The reps will feel it in their pocket too. No more bringing home free dinners to feed the family.”

“It’s not a problem as of yet, but wait until the media starts talking and/or printing the monies spent then it will be a different story.”

“Wait ‘til the local paper starts publishing how much money is spent on good old ‘Doc High Writer’ ($200 a day for lunch/breakfast, X 4 days a week, 52 weeks a year, gosh that sounds like a lot, it is), you’ll see him on the 6 o’clock news for 20 seconds, trying to explain the great educational interaction he receives from us reps. But the lunch room will be shut down.”

“A few years ago there was a fire drill when docs discovered they could block their data—three docs in my territory did it. The only people who will be affected are the speakers for [Novo Nordisk] who get $100K-plus per year. I will make sure that certain people get a photocopy of certain documents in order to convince them of certain things.”

“I left [Sanofi-Aventis] for medical device sales and never looked back. We don’t do lunches, dinner programs, have iPads, and give away pens, post-it notes, clipboards, wall clocks, or samples in order to make our sales calls more effective. It’s sad that you have trained your customers to expect these things and now you are worried that pharma reps will have to rely on their capabilities of selling without them.”

“Lunches are shutting down, people. Once a doctor exceeds $100 reported of food annually, their record will go public for all to see just how much money they receive in free food from sales reps.”

“This is not just a pharma thing either. Any healthcare related vendors are liable.”

“Unfortunately, it doesn’t matter if meals are under $10. Everything gets posted once the doc hits $100 total for the year. I can almost feel the doors closing once docs figure that out, and the media gets a hold of the data.”

“Basically, anyone who is in a so-called sales position, one that UPS or Fed-Ex can do a better job at is impacted.”

http://blog.pharmexec.com/2013/08/27/the-sunshine-act-makes-for-gloomy-sales-reps/?

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GlaxoChinaGate contd. - British investigator 'admits' wrongdoing on Chinese TV

British risk consultant Peter Humphrey has appeared on Chinese state television, apparently confessing to charges he illegally bought and sold private information, amid a probe into corruption in the pharmaceuticals industry.

His apparent admission comes just days after Mr Humphrey and his wife were formally arrested by Chinese authorities, who on Tuesday publically accused the couple of "wantonly" obtaining a large quantity of information for use in their investigations.

The information allegedly included household registrations, information on international travel, and property records.

"I sometimes used illegal means to obtain personal information," Mr Humphrey said in Mandarin on state broadcaster China Central Television (CCTV) as he sat handcuffed wearing an orange vest.

"I very much regret this and apologise to the Chinese government."

^{Televised confession on Chinese broadcaster CCTV}

The husband-and-wife team were first detained in Shanghai on July 10, along with around eight other individuals, as police probed bribery allegations against British drug giant GlaxoSmithKline, but were not formally arrested until August 19. Jason Cai, a Chinese investigator who worked with the couple, was arrested around the same time, according to reports citing a source with direct knowledge of the matter. However, he was not mentioned in the state media reports, and his arrest has not been announced.

Cai Hua, a Chinese criminal lawyer unrelated to Jason Cai, said it was difficult to say how heavy the penalty would be if the couple is convicted.

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"For the most part, it rests on the extent of the damage the crime has done and the amount of information obtained," said Mr Cai.

The couple "confessed to the crime without concealing anything," the state-controlled Xinhua news agency reported. "[Humphrey's] actions seriously violated the personal privacy of Chinese citizens."

"Whether it's a Chinese person or foreigner engaging in illegal activities, public security organs will firmly crack down without holding back," the news agency, which is considered a mouthpiece for the Chinese government, said.

Mr Humphrey and Ms Yu, both well-known corporate investigators in China, run Hong Kong-based ChinaWhys, a risk consultancy that focuses on fraud and accounting for multinational businesses operating in the country. CCTV branded the consultancy a "profitable, but illegal business".

It is unclear whether the charges are directly linked to the investigation into GSK, though the drug maker is believed to have been one of Mr Humphrey’s clients in the past. CCTV reported that 126 people were arrested for privacy infringement in August, 26 of whom are under criminal detention.

GSK faces allegations from Chinese police that four sales executives funnelled up to £320m in bribes to doctors and healthcare officials to raise prices and win market share. The company has said its own probe into the matter has uncovered evidence which partly supports the accusations, but insists the individuals were acting outside GSK's controls.

French pharmaceuticals firm Sanofi and Swiss drug maker Novartis also face accusations of bribery in China, after whistleblowers from both firms made allegations in the Chinese media earlier this month.

Authorities have since launched an investigation into Sanofi, which isalleged to have bribed more than 500 Chinese doctors with Rmb1.7m (£179,000) in late 2007, to raise sales. The French drug maker said it took the accusations “very seriously” and has “zero tolerance” towards unethical practice.

Meanwhile Novartis has said it is launching an internal investigation intoclaims that a sales employee was instructed to give Rmb50,000 in bribes to doctors to guarantee Rmb640,000 in cancer drug sales in June and July this year.

Watch the confession:

http://www.telegraph.co.uk/finance/china-business/10267827/British-investigator-admits-wrongdoing-on-Chinese-TV.html

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Institutional Corruption and Pharmaceutical Policy

The goals of pharmaceutical policy and medical practice are often undermined due to institutional corruption — that is, widespread or systemic practices, usually legal, that undermine an institution’s objectives or integrity. The pharmaceutical industry’s own purposes are often undermined. In addition, pharmaceutical industry funding of election campaigns and lobbying skews the legislative process that sets pharmaceutical policy. Moreover, certain practices have corrupted medical research, the production of medical knowledge, the practice of medicine, drug safety, and the Food and Drug Administration’s oversight of pharmaceutical marketing.

As a result, practitioners may think they are using reliable information to engage in sound medical practice while actually relying on misleading information and therefore prescribe drugs that are unnecessary or harmful to patients, or more costly than equivalent medications. At the same time, patients and the public may believe that patient advocacy organizations effectively represent their interests while these organizations actually neglect their interests.

To address these issues, a group of lab fellows from the Edmond J. Safra Center put together a symposium of 16 articles that investigate the corruption of pharmaceutical policy, each taking a different look at the sources of corruption, how it occurs and what is corrupted. The articles address five topics: (1) systemic problems, (2) medical research, (3) medical knowledge and practice, (4) marketing, and (5) patient advocacy organizations. They are now available online and will appear in the fall issue of The Journal of Law, Medicine & Ethics.

For a summary of each article and the key themes see, Marc Rodwin, Institutional Corruption and Pharmaceutical Policy.

---

Institutional Corruption and Pharmaceutical Policy

An Edmond J. Safra Center Symposium 

(forthcoming)

Journal of Law, Medicine and Ethics 

Vol. 14, No. 3 (2013)

• Marc Rodwin, Institutional Corruption and Pharmaceutical Policy
• Lawrence Lessig, Foreword: 'Institutional Corruption' Defined
• Gregg Fields, Parallel Problems: Applying Institutional Corruption Analysis of Congress to Big Pharma
  

1. SYSTEMIC PROBLEMS

• Paul D. Jorgensen, Pharmaceuticals, Political Money, and Public Policy: A Theoretical and Empirical Agenda
• Marc-André Gagnon, Corruption of Pharmaceutical Markets: Addressing the Misalignment of Financial Incentives and Public Health
• Marc A. Rodwin, Five Un-Easy Pieces of Pharmaceutical Policy Reform
• Donald W. Light, Joel Lexchin, Jonathan J. Darrow, Institutional Corruption of Pharmaceuticals and the Myth of Safe and Effective Drugs
• Jennifer E. Miller, From Bad Pharma to Good Pharma: Aligning Market Forces with Good and Trustworthy Practices Through Accreditation, Certification, and Rating

2. MEDICAL RESEARCH

• Abigail B. Brown, Understanding Pharmaceutical Research Manipulation in the Context of Accounting Manipulation
• Yuval Feldman, Rebecca L. Gauthier, and Troy H. Schuler,Curbing Misconduct in the Pharmaceutical Industry: Insights from Behavioral Ethics and the Behavioral Approach to Law
• Garry C. Gray, The Ethics of Pharmaceutical Research Funding: A Social Organization Approach

3. MEDICAL KNOWLEDGE AND PRACTICE

• Sergio Sismondo, Key Opinion Leaders and the Corruption of Medical Knowledge: What the Sunshine Act Will and Won't Cast Light On
• Lisa Cosgrove and Emily E. Wheeler, Drug Firms, the Codification of Diagnostic Categories, and Bias in Clinical Guidelines
• Marc A. Rodwin, Rooting Out Institutional Corruption to Manage Inappropriate Off-Label Drug Use

4. MARKETING

• Sunita Sah and Adriane Fugh-Berman, Physicians Under the Influence: Social Psychology and Industry Marketing Strategies
• Amy Snow Landa and Carl Elliott, From Community to Commodity: The Ethics of Pharma-Funded Social Networking Sites for Physicians

5. PATIENT ADVOCATES

• Susannah L. Rose, Patient Advocacy Organizations: Institutional Conflicts of Interest, Trust, and Trustworthiness

http://www.ethics.harvard.edu/lab/featured/325-jlme-symposium

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Why Drug Companies Don't Care What You Think About Them

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by IBTimes Aug 26th 2013 2:06PM

Updated Aug 26th 2013 2:29PM

Alamy

By Alexander C. Kaufman

U.S. drugmaker Eli Lilly & Co. (NYSE:LLY) is "deeply concerned" about bribery accusations levied in a Shanghai newspaper on Thursday. GlaxoSmithKline PLC (NYSE:GSK), Britain's pharmaceutical Goliath, is scrambling to resolve a bribery scandal in China that has already seen four executives arrested this month. Baxter International Inc.(NYSE:BAX) admitted three weeks ago to expense violations at a Chinese joint venture.

But don't expect any public relations offensive from Western pharmaceutical giants in China.

Frankly, says crisis control expert Jonathan Bernstein, they don't really care.

"Certain industries that inherently have a bad reputation with the general public and rouse suspicions with regulatory industries and, depending on whether they're getting money from them or not, certain politicians," Bernstein told International Business Times on Friday. "Pharmaceuticals have always been up there with big oil and big tobacco."

Knowing public scrutiny will do little to affect the demand for their products, he said he expects big drug companies in China that have not faced any recent charges -- including Pfizer Inc. (NYSE:PFE) and Johnson & Johnson (NYSE:JNJ) -- to be preparing tersely worded legal statements.

"They are strictly concerned, in my opinion, with their threat and not their reputation threat," said Bernstein, who runs Bernstein Crisis Management Inc. "It's a very different type of messaging."

Bernstein said he does not work with pharmaceutical companies or any other industry that makes you "question the morals of ethics of it" such as tobacco, oil and fossil-fuel energy companies or politicians.

"The major players have had a reputation for putting profits before safety and health, that's the general public perception," he said. "At the same time, they also take the attitude of, 'why should we worry about it a whole lot? If people need drugs, they're going to buy them anyhow.'"

http://www.dailyfinance.com/2013/08/26/why-drug-companies-dont-care-what-you-think-about-them/

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Press Conference Wednesday: In Wake of Controversy Over Unethical NIH-Funded Premature Baby Trial, HHS Seeks Way Forward

Family of a Baby Enrolled in the Trial to Attend; Outcome of Aug. 28 HHS Public Meeting Could Weaken Rules for Protecting Human Research Subjects

August 26, 2013

Contact: Angela Bradbery (202) 588-7741; Sam Jewler (202) 588-7779

What: Press conference to highlight the need for the U.S. Department of Health and Human Services (HHS) to strengthen the ethical standards by which human experiments are conducted and halt any ongoing trials in which parents were not properly informed of the risks to their babies or of the purpose and nature of the research.

Publicity in April over an unethical trial conducted on premature infants, called the SUPPORT study, sparked the convening of an unusual, daylong Aug. 28 public forum at (HHS). Public Citizen’s press conference will be held during the lunch break; speakers will include parents of a baby enrolled in that controversial trial, now a six-year-old who suffers from serious health problems. At the forum, Dr. Michael Carome and Dr. Sidney Wolfe, director and founder/senior adviser of Public Citizen’s Health Research Group respectively, will be the first two witnesses to testify when it starts at 9 a.m.

In the SUPPORT study, funded by the National Institutes of Health (NIH) and conducted from 2005-2009, premature infants were exposed to an increased risk of blindness, brain injury and death. In contrast to usual clinical care, the extremely premature infants enrolled in the SUPPORT study were randomly put in two groups that each received a different experimental target range of oxygen saturation. None of the consent forms signed by parents mentioned the risk of death, and only two out of 22 noted the risk of eye damage.

Since Public Citizen publicized that study, a controversy has raged in the scientific community over what kind of consent is needed in certain kinds of clinical trials. The debate goes to the heart of how research is conducted in the U.S. and could have far-reaching, negative implications if changes are made to weaken the ethical and regulatory standards by which trials are run.

Last week, Public Citizen publicized another, similar, NIH-funded trial that has just started and that also poses known risks to premature babies without fully informing the parents about those risks or the purpose and nature of the research. It is designed to determine which of two strategies for treating anemia with blood transfusions is more likely to result in death or neurologic injury in extremely premature infants who develop anemia.

Wednesday’s meeting will be livestreamed at www.HHS.gov/live.

When: Press conference: Noon (estimated time of lunch break) EDT, Wednesday, Aug. 28
Meeting runs 9 a.m. - 5 p.m.

Who: Dr. Michael Carome, director, Public Citizen’s Health Research Group
Dr. Sidney Wolfe, founder and senior adviser, Public Citizen’s Health Research Group
Carrie Pratt and Shawn Pratt, with their six-year-old daughter Dagen Pratt, who as a baby was experimented upon in the SUPPORT study
Alice Dreger, Ph.D., professor of clinical medical humanities and bioethics at the Feinberg School of Medicine at Northwestern University
George J. Annas, JD, MPH, the William Fairfield Warren Distinguished Professor and Chair in the Department of Health Law, Bioethics & Human Rights at the Boston University School of Public Health; professor at the Boston University School of Medicine and School of Law

Where: Press conference will be held outside the front of the HHS building, 200 Independence Ave SW, Washington, D.C.

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Danny defends the indefensible

The former chairman of pharmaceutical group Novartis on Sunday defended his planned 72-million-franc ($77 million) golden handshake that caused an uproar in Switzerland. Daniel Vasella told the Financial Times that the firm's board was responsible for the payout, which was eventually radically cut back after a shareholder revolt.
 
"Fundamentally, I don't believe you should curtail yourself [in a negotiation]," he told the paper.

"The board . . . has to decide and has the responsibility for whatever comes out."
 
Vasella will now receive 2.7 million Swiss francs in cash, and shares worth about 2.2 million francs, for services during the transition period since he left in February this year.
 
The total amount is about one fifteenth of what he would have received.

However, he is to continue acting as a consultant for the firm at a high daily fee.
 
He told the FT that his severance package was "within the bracket" of top-executive payouts and said the figure was "negligible" given the returns he had generated.

http://www.thelocal.ch/20130825/ex-novartis-chief-defends-planned-payout?

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Amgen Said to Be Near Deal to Buy Onyx BY MICHAEL J. DE LA MERCED

Amgen is close to a deal to buy Onyx Pharmaceuticals, a maker of cancer-fighting drugs, for about $125 a share, people briefed on the matter said on Saturday.

A deal — which would be worth more than $10 billion — could be announced as soon as Monday, though these people cautioned that talks are ongoing and could still fall apart.

If a transaction is completed, it would be the latest of many in the health care industry. One incentive for drug makers on the prowl is acquiring new cancer drugs, which can fetch high prices.

Amgen began its quest for Onyx in June, when it made an unsolicited bid for Onyx valued at $120 a share, about 38 percent above its stock price at the time.

http://dealbook.nytimes.com/2013/08/24/amgen-said-to-be-near-a-deal-to-buy-onyx/?_r=0

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Healthcare group Fresenius warned over Puerto Rico plant

Aug 23 (Reuters) - U.S. regulators have issued a third warning this year for German healthcare group Fresenius to improve procedures at its sites, this time a blood bag manufacturing plant in Puerto Rico.

A letter to the company from the U.S. Food and Drug Administration (FDA) took issue with complaint-handling procedures and labelling at the Puerto Rico site, the German company said on Friday, adding that patients had not been put at risk.

Fresenius said that it is addressing the concerns raised by the FDA and that production at the plant is continuing, adding that full-year earnings targets for the infusion drugs and blood transfusion unit Kabi are not at risk.

Only last month Fresenius received an FDA warning letter related to an inspection of its cancer drug plant in Kalyani, India.

In March the company's separately listed subsidiary Fresenius Medical Care, the world's largest dialysis company, was told by U.S. regulators to improve the way it sterilises certain dialyzers for filtering patients' blood.

In May and June Fresenius Kabi voluntarily recalled some magnesium sulphate and benztropine mesylate injections in the United States because of the potential presence of glass particles in the vials.

http://www.reuters.com/article/2013/08/23/fresenius-fda-idUSL6N0GO1XJ20130823?rpc=401

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GlaxoChinaGate contd. - Now Lilly join the party!

SHANGHAI, Aug 22 (Reuters) - U.S. drugmaker Eli Lilly and Co said it was "deeply concerned" about allegations published in a Chinese newspaper that it spent more than 30 million yuan ($4.90 million) to bribe doctors in China to prescribe the firm's medicines instead of rival products.

A former senior manager for the company, identified by the pseudonym Wang Wei, told the 21st Century Business Herald that bribery and illegal payments at Eli Lilly's China operations were widespread, the paper reported on Thursday.

Eli Lilly is the third foreign drugmaker to face whistleblower accusations in the newspaper this month. The reports coincide with multiple Chinese investigations into the pharmaceutical sector, spanning alleged corruption to how drugs are priced.

"In order to hit sales at rival companies and push the company's own products, bribes and special payments of all sorts were extremely common at the company. The level of the problem was just as bad as at GlaxoSmithKline," Wang was quoted as saying.

The report said the 30 million yuan in bribes were handed out over a period of around one year from 2011 to 2012.

Police have detained four Chinese executives at British drugmaker GlaxoSmithKline over allegations it funnelled up to 3 billion yuan ($489.92 million) to travel agencies to facilitate bribes to doctors to boost the sale of its medicines. GSK has said some of its senior Chinese executives appear to have broken the law.

Eli Lilly said in an emailed statement to Reuters that it was looking into the matter.

"Although we have not been able to verify these allegations, we take them seriously, and we are continuing our investigation," the statement said.

The U.S. firm said it had been made aware of "similar allegations" of kickbacks in 2012 by a former sales manager. It said the firm had opened an investigation at that time involving staff interviews, e-mail monitoring and expense report audits.

Wang told the newspaper that company employees paid the bribes to promote two of the company's key insulin products in Shanghai and neighbouring Anhui province.

Further kickbacks in the form of paid talks, conferences and other contributions were also made, he said.

Last week the 21st Century Business Herald quoted an unnamed whistleblower as saying Novartis AG had paid bribes to doctors to boost drug sales, prompting the Swiss company to launch an internal investigation.

Health Ministry officials are also investigating Sanofi SA over bribery allegations after the newspaper said staff paid bribes totalling about 1.7 million yuan to more than 500 doctors in late 2007 to boost sales. The French company has said it is taking the claims "very seriously".

Corruption in China's pharmaceutical industry is widespread, fuelled in part by the low base salaries for doctors at the country's 13,500 public hospitals.

http://www.reuters.com/article/2013/08/22/elililly-china-bribery-idUSL4N0GN0JW20130822?rpc=401

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HipOpGate - J&J Said to Weigh $3 Billion Settlement of Its Hip Implant Cases

Johnson & Johnson (JNJ), the world’s biggest seller of health-care products, has discussed paying more than $3 billion to settle lawsuits over its recalled hip implants, according to five people familiar with the matter.

J&J seeks to resolve as many as 11,500 lawsuits in the U.S. and has considered paying more than $300,000 per case, according to the people. Such a settlement would exceed $3 billion if most plaintiffs accept the terms, an amount 50 percent larger than that proposed in previous discussions.

Enlarge image

Michael Kelly, attorney for plaintiff Loren Kransky, holds up an ASR XL hip implant made by Johnson & Johnson during his opening statement to the jury at the trial of Kransky v. DePuy, at the California Superior Court in Los Angeles, on Jan. 25, 2013. Photographer: Patrick T. Fallon/Bloomberg

A $3 billion settlement would dwarf a 2001 accord Sulzer (SUN) AG reached with patients who claimed that company’s hip and knee implants were defective. Sulzer, a Winterthur, Switzerland-based pump maker, agreed to pay $1 billion to resolve those suits, then the largest settlement involving hip implants.

Any accord would be affected by the outcome of seven product-liability trials between September and January, according to the people, who aren’t authorized to make the negotiations public.

“It’s going to be a fascinating case to watch settle because of the level of complexity of the injuries and the amount of money that will be involved,” said Bruce Cranner, a medical device defense lawyer not involved in the case. “You don’t see a lot of mass-tort implant cases settle for a substantial amount of money.”

Replacement Surgeries

The company is pushing to resolve U.S. cases by early next year, according to the people. J&J’s DePuy unit recalled 93,000 implants in 2010, including 37,000 in the U.S., after more than 12 percent failed within five years. That rate is climbing, along with suits by patients blaming the chromium and cobalt devices for pain, metal debris and replacement surgeries.

J&J, based in New Brunswick, New Jersey, has spent about $993 million on medical costs and informing patients and surgeons about the ASR recall, Lorie Gawreluk, a spokeswoman for DePuy, said in an e-mail. J&J set aside an undisclosed amount for litigation, which it increased before June 30, she said.

“The company also continues to support ASR patients with a reimbursement program to address recall-related testing and treatment costs,” she said. “Reports about a possible resolution of the litigation are premature and speculative, including any estimates of resolution amounts.”

Steven Skikos, a plaintiffs’ lawyer leading efforts to prepare lawsuits against DePuy, said his group is preparing for jury trials, which include the first case in federal court.

‘Dangerous Guess’

“With the trials rapidly approaching, and our continuing efforts to obtain more information and data about the patients, it’s easy to speculate about settlement,” Skikos said in an e-mail. “However, any comment relating to settlement that does not come from the plaintiff’s leadership, the court, or from the company itself remains premature, uninformed and a dangerous guess.”

J&J lost an $8.3 million verdict in the first trial over the ASR device and won the second. In the first case, a California jury in March awarded damages to a retired Montana prison guard. The panel also ruled the device was defectively designed, that DePuy properly warned of the risks, and that the company didn’t owe punitive damages. DePuy is appealing.

A Chicago jury ruled six weeks later for DePuy in rejecting a defective design claim by an Illinois nurse.

Other Trials

Seven other trials of lawsuits by plaintiffs blaming the ASR hips for injuries will help lawyers for both sides frame questions over liability and damages. The first is scheduled to begin Sept. 9 in federal court in Cleveland. U.S. District Judge David Katz is overseeing that lawsuit by Ann McCracken, 58, a resident of Rochester, New York, who needed two replacement surgeries known as revisions after her ASR implant.

Katz is overseeing about 8,000 federal cases consolidated before him for the pre-trial collection of evidence. About 2,000 cases are pending in the California Judicial Council Coordinated Proceeding before Judge Richard Kramer in San Francisco.

Trials also are scheduled in state courts in San Francisco in October; in Hackensack, New Jersey, in October and January; in West Palm Beach, Florida, in November; in Chicago in December; and in Los Angeles in January.

“DePuy believes the evidence to be presented at trial will show the company acted appropriately and responsibly,” Gawreluk said. “The ASR hip system was properly designed, physicians were properly informed of the product’s risks, and DePuy’s actions concerning the product were appropriate.”

Broad Outline

Lawyers for hip recipients are still reviewing more than 50 million pages of J&J documents and conducting pre-trial interviews of company officials and experts to prepare for those cases, Skikos said.

While settlement talks continue, J&J and lawyers for hip claimants have agreed on the broad outline of a so-called “global settlement” covering all U.S. cases, the people said.

In January, five people familiar with the talks had said J&J officials were willing to pay about $2 billion to resolve the cases. Lawyers for plaintiffs rejected that amount as too little, the people said.

Any overall accord would compensate patients based on such factors as age, extent of injuries and whether they had one or more surgeries to replace defective implants, according to the people. Negotiators would likely rank those and other factors on a matrix or grid, the people said.

“J&J’s strategy will be to find a way to negotiate a grid to settle each of the claims based on five or six variables that could be plugged in and changed up or down to determine the value of any claim,” said Cranner, a lawyer with the New Orleans-based law firm of Frilot LLC. He is past chairman of the Medical Liability and Health Care Law Committee of DRI, an organization of lawyers who represent corporations and insurers.

Obstacles Remain

Several obstacles to a final settlement still must be overcome, the people said. One includes the number of years that J&J may potentially have to pay future claims. Another is whether the settlement would include reimbursing Medicare for claims paid. A third is the amount of compensation for extreme medical cases, which include dual hip surgeries or cases where infection prompted long hospital stays, the people added.

“There are a significant subset of clients who got very badly hurt by the device, and their injuries are much more than a simple revision,” said Matthew Davis, a lawyer at Walkup Melodia Kelly & Schoenberger in San Francisco whose firm represents 270 ASR clients.

“If those cases went to trial and there was a finding of liability, a jury would award them general damages in the seven figures,” said Davis, who isn’t involved in the negotiations.

Alloy Used

The J&J hips were made from a cobalt-and-chromium alloy used in two related models -- the ASR XL Acetabular System, and the ASR Hip Resurfacing System. In announcing its recall, J&J cited unpublished data from the U.K. showing that within five years, 13 percent of ASR XL hips failed and needed revisions, and 12 percent of the ASR Hip Resurfacing System failed.

At the first trial in Los Angeles, lawyers for plaintiff Loren Kransky argued DePuy failed to test the device adequately before selling it in the U.S. in 2005, buried surgeon complaints of mounting failures, and studied a redesign of the ASR before scrapping that effort in 2008.

Lawyers for patients claim that debris from the metal ball sliding against the metal cup causes tissue death around the joint and may increase the amount of metal ions in the bloodstream to harmful levels.

J&J set up a help line for patients that is “available in dozens of countries and has served tens of thousands of callers,” Gawreluk said. J&J runs a worldwide reimbursement program resulting in “thousands of payments to patients for testing and treatment of other out-of-pocket expenses.”

The McCracken DePuy case is McCracken v. DePuy, 11-dp-20485, U.S. District Court, Northern District of Ohio (Toledo). The consolidated federal case is In re DePuy Orthopedics Inc., ASR Hip Implant Products Liability Litigation, 10-MD-2197, U.S. District Court, Northern District of Ohio (Toledo).

To contact the reporters on this story: Jef Feeley in Wilmington,Delaware, at jfeeley@bloomberg.net; David Voreacos in Newark,New Jersey, at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha atmhytha@bloomberg.net

http://www.bloomberg.com/news/2013-08-21/j-j-said-to-weigh-3-billion-settlement-of-its-hip-implant-cases.html

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GlaxoChinaGate contd. Briton held in China arrested amid pharmaceuticals probe

(Reuters) - A British risk consultant held in China since mid-July amid an investigation into the country's pharmaceutical industry has been arrested, the British Embassy in Beijing and his family said on Wednesday.

Peter Humphrey and his wife, Yu Yingzeng, were detained in Shanghai on July 10 as police probed bribery allegations against British drugmaker GlaxoSmithKline (GSK).

In China, an arrest typically means police believe they have enough evidence for a case to be brought to trial. Detentions can last for weeks and end in release without charges being filed.

It was not immediately clear if Humphrey's arrest was directly related to the investigation of GSK, which has been accused by China of funneling up to 3 billion yuan ($489 million) to travel agencies to facilitate bribes to doctors and officials.

China has taken a tough stance on corruption and high prices in the pharmaceutical industry as it unrolls wider healthcare access and faces an estimated $1 trillion healthcare bill by 2020.

"We can confirm the arrest of a British national, Peter Humphrey, in Shanghai on Monday the 19th of August. We are currently providing consular assistance," British Embassy spokeswoman Hannah Oussedik told Reuters by phone.

Oussedik declined to offer additional information about the reasons for Humphrey's arrest. The U.S. Embassy in Beijing could not be reached immediately to confirm whether Yu was also arrested. The U.S. Consulate in Shanghai declined to comment.

Shanghai police did not respond to a request for comment.

A statement issued by a member of Humphrey's family said both Humphrey and Yu had been arrested.

A source close to the family said they had not yet been told which charges would be laid against Humphrey, or when, but the statement said lawyers told the family the couple had been detained last month because they broke a law related to buying private information.

Humphrey and Yu co-founded ChinaWhys, a business risk advisory firm that has done work with drugs companies, including GSK, separate sources familiar with the matter have said.

Humphrey worked as a journalist for Reuters in the 1980s and 90s. The ChinaWhys website says he has been a risk management specialist and corporate detective for 14 years.

In March 2010, four executives from mining giant Rio Tinto were jailed for taking bribes and stealing commercial secrets. Three of those executives were Chinese while the fourth was a Chinese-born Australian.

(Reporting by Michael Martina, Megha Rajagopalan, Hui Li and Shanghai newsroom; Editing by Kazunori Takada and Nick Macfie)

http://www.reuters.com/article/2013/08/21/us-china-briton-arrest-idUSBRE97K0C120130821?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637

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