Archive

Reuters blog archive

from Breakingviews:

GSK finds toxic side effects in Chinese market

Photo

By John Foley and Edward Hadas

(The authors are Reuters Breakingviews columnists. The opinions expressed are their own)

GlaxoSmithKline has a problem in China. The Chinese authorities have a problem that goes well beyond the UK pharmaceutical maker.

The GSK problem has a familiar ring. Along with U.S. rivals Pfizer and Johnson & Johnson, GSK settled American bribery cases. It is all too easy for these makers of high-margin products to share some of the revenue with the doctors who write prescriptions. The manufacturer, doctor and non-paying patients are all happy. Those who actually pay for the junkets and favours are often left to fume. In China, that is usually the patients.

The Chinese authorities have gone beyond fuming. The Ministry of Public Security accused GSK of transferring up to 3 billion yuan ($489 million) of kickbacks to over 700 travel agencies and consultancies. The goal was to increase market share in a pharmaceutical market worth $181 billion last year. The company says it has “zero tolerance” for such activities, and has cut off business with the agencies suspected of foul play.

from Alison Frankel:

SCOTUS pay-for-delay ruling: New scrutiny for nonpharma patent deals?

In the U.S. Supreme Court's ruling Monday on pay-for-delay settlements in the pharmaceutical industry - in which a brand-name drugmaker pays generic rivals to drop challenges to its patent, thus assuring its monopoly - five justices agreed with the Federal Trade Commission that the key question isn't whether pay-for-delay deals exceed the scope of the brand-maker's patent. Courts cannot simply rubber-stamp such settlements as presumptively legal, the majority said in FTC v. Actavis. But nor can they assume that pay-for-delay settlements are illegal by their very nature. Instead, according to the majority, trial courts must conduct a "rule of reason" analysis to determine whether reverse-payment settlements violate antitrust law.

Those inquiries, the majority concedes, are probably going to be "time consuming, complex and expensive" - a much less convenient alternative to the simple scope-of-the-patent test endorsed by the 11th Circuit Court of Appeals in the underlying case and by several other federal circuits in previous pay-for-delay suits by the FTC and private plaintiffs. But the scope-of-the-patent approach "throws the baby out with the bath water," the majority said. A patent holder has monopoly rights only when its patent is valid, the very inquiry that is aborted through pay-for-delay settlements.

from Breakingviews:

U.S. justices square the helix on gene patents

Photo

By Reynolds Holding
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The U.S. Supreme Court has managed to square the helix on human gene patents. The justices ruled on Thursday that companies can hold exclusive rights to synthetic DNA molecules but not naturally occurring ones. The unanimous decision should allow biotechnology companies to reap rewards for their work without stifling the research of others.

from Cancer in Context:

Does Researcher Turned Activist = No Funding?

Dr. Hagop Kantarjian, chairman of the leukemia department at the prestigious MD Anderson Cancer Center in Houston, has collaborated with drug makers for years to discover new ways to battle the disease.

Now, at age 59, he has become an activist protesting the high cost of the newest generation of life-saving drugs.

from Breakingviews:

Hostile drug deal gets too clever for its own good

Photo

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Royalty Pharma is suffering from some self-inflicted wounds in its hostile pursuit of Elan. The finance firm tried to use the drug maker’s $1 billion stock buyback to swoop up the entire company. But it devised a puzzlingly complex tender offer that was too clever for its own good. The scheme ended up replacing a long-term shareholder with other investors far more likely to demand a chunkier premium.

from Breakingviews:

$6.6 bln won’t be enough to end Elan’s rash dreams

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Royalty Pharma’s $6.6 billion indicative offer for Elan probably won’t be enough to end the latter’s ambitious dreams. The biotechnology company has grand M&A plans after selling most of the rights to its blockbuster drug, Tysabri, for $3.25 billion earlier this month. Royalty Pharma may well use that cash more wisely than Elan’s current bosses, but a 4 percent premium won’t seal the deal.

from Alison Frankel:

FDA confirms: It’s considering rule change for generic labels

Last month, when I wrote about the Obama administration's apparent flip-flop on the question of federal pre-emption of product liability claims against generic drugmakers, I mentioned a curious footnote in the Justice Department's Supreme Court amicus brief in Mutual Pharmaceutical v. Barrett. All the wrangling over liability for generics, which are required by law to use the same labels as the brand-name drugs they replicate, could be unnecessary, Justice hinted. "This office has been informed that Food and Drug Administration is considering a regulatory change that would allow generic manufacturers, like brand-name manufacturers, to change their labeling in appropriate circumstances," the brief said. "If such a regulatory change is adopted, it could eliminate pre-emption of failure-to-warn claims against generic-drug manufacturers."

I should have given the footnote more attention. In the last couple of weeks, it has prompted speculation by a number of pharma websites about whether the FDA really intends to upend longstanding policy barring generics from altering their labels, and, if so, what that portends for their product liability exposure. On Wednesday, I emailed the FDA to ask. In an email response, an FDA representative confirmed what the Justice Department footnote suggested: "FDA is considering a regulatory change that would allow generic manufacturers, like brand-name manufacturers, to change their labeling in appropriate circumstances," the agency said. "FDA intends to provide an opportunity for public comment with respect to any such proposed changes to its regulations."

from Breakingviews:

Pharma lands one-two punch on government finances

By Robert Cyran and Reynolds Holding

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Pharma has landed a double blow against the American government. The U.S. Court of Appeals in New York has ruled that a drug salesman was exercising his right to free speech by pitching a narcolepsy drug as effective against insomnia, chronic fatigue and other conditions the Food and Drug Administration had not approved. If the Supreme Court upholds this decision, companies will pay fewer multi-billion dollar fines and useless healthcare spending will increase.

from The Great Debate:

Thalidomide’s big lie overshadows corporate apology

A lie wrapped in an apology is still a lie. It is a big lie, a particularly offensive lie, coming as it does from the German company Chemie Grünenthal responsible for inflicting its notorious drug thalidomide on hundreds of thousands of women in 52 countries. Some 90,000 babies are calculated to have died in spontaneous abortion, but at least 10,000 mothers are known to have given birth to malformed babies between 1958 and 1961; the most damaged survive today as limbless trunks, others whose legs and arms were reduced to digital “flipper” extrusions from the shoulder, and thousands have severe internal injuries as well.

Grünenthal (now GmbH) was a small private company set up after World War Two as an offshoot of an old family firm that made soaps and detergents. Its first pharmaceuticals were produced under foreign license, but thalidomide (which it called Contergan) was its own, a sedative discovered by accident in the spring of 1954 by a 32-year-old chemist and doctor, Heinrich Mückter. To exploit the postwar sleeping-pill boom, Grünenthal marketed it massively from October 1957 as “completely safe,” “completely atoxic,” and free of the unpleasant side effects of barbiturates. The sales department called it “the apple of our eye” because it was so profitable. From 1958 to 1961 they zeroed in on promoting it for use by expectant mothers.

from Breakingviews:

Purge likely after U.S. obesity drug binge

Photo

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Two U.S. biotech firms are bingeing on obesity drugs. Their concoctions for weight loss have both been approved by the Food and Drug Administration in the last month. With American obesity rates rocketing, analysts are eyeing fat sales and bankers are weighing mergers.

  •