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Big Pharma Placed in Malpractice Spotlight

In August, Pfizer resolved investigations by the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) regarding corrupt business practices. The SEC charged Pfizer with violating the US Foreign Corrupt Practices Act (FCPA) after an investigation alleged that certain Pfizer subsidiaries in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia and Serbia had been bribing foreign officials to obtain regulatory and formulary approvals, sales and increased prescriptions. The bribes were concealed in accounting records as legitimate expenses for activities such as promotion, marketing, training, travel and entertainment and clinical trials. Pfizer voluntarily reported the violations to US authorities in 2004 and has since implemented anticorruption compliance reviews and anticorruption training.

"Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers," Kara Brockmeyer, chief of the SEC Enforcement Division's Foreign Corrupt Practices Act Unit, said in a statement.

In addition, the SEC separately charged Wyeth, which Pfizer acquired in 2009, for its own FCPA violations. The violations are alleged to have taken place primarily before, but also after Wyeth was acquired. Pfizer discovered the violations shortly after the acquisition and reported them to the authorities.

Combined, Pfizer and Wyeth will pay more than $45 million to settle the SEC charges, as well as a $15-million penalty from the DOJ. However, Pfizer has been praised by both the DOJ and the SEC for its cooperation with the investigations, and the DOJ has chosen not to push for any criminal action against the company.

Further corruption

Pfizer is not the only big-name company to have been in the spotlight recently for business malpractice. In mid-August, Teva revealed that it was being investigated for potential FCPA violations. In July, the company received a subpoena from the SEC asking for documents concerning business practices in Latin America. Teva also added that it is conducting a voluntary investigation of its own into business activities that may have further FCPA implications.

Meanwhile in July, GlaxoSmithKline was in the spotlight for marketing malpractice. The company paid $3 billion to resolve criminal and civil liability relating to several malpractices, including unlawful promotion of certain prescription-only drugs, failure to report certain safety data and false price reporting practices. GSK says it has taken action at all levels of the company to change its procedures for compliance, marketing and selling, as well as removing employees who engaged in misconduct.

Drug settlements

A recent poll on PharmTech.com asked whether drug settlements were enough to deter pharmaceutical companies from using corrupt business practices (see below).

Do you think large drug settlements to settle criminal and civil liabilities are an appropriate deterrent to corporate malpractices?

The majority of respondents (63%) believe that drug settlements are not enough an appropriate deterrent. However, large fines no doubt highlight to a business that it must do more to monitor activities across its global subsidiaries. In a statement, the SEC explained that Pfizer's recent charges "illustrate the pitfalls that exist for companies that fail to appropriately monitor potential risks in their global operations."

Discuss the results of this poll and your thoughts on the recent FCPA violations on LinkedIn: PharmTech.com/LinkedIn

BRIC Retains Pharma Investments

Emerging markets continue to attract the attention of pharmaceutical companies thanks to their high growth and large patient populations. Back in 2001, the locations of focus were the so-called 'BRIC' countries (Brazil, Russia, India and China). Now, even with other markets gaining traction such as Turkey and Indonesia, recent announcements show that the original BRIC countries still retain favour with the pharmaceutical industry.

Brazil

A recent poll on PharmTech.com asked which countries, aside from China and India, pharmaceutical companies were most interested in expanding business operations into (see below). The clear favourite, chosen by 36% of respondents, was Brazil, followed by Other (19%) and Russia (14%).

Into which pharmerging market - aside from China and India - is your company most interested in expanding manufacturing operations?

Other announcements also suggest that Brazil continues to be an important pharmaceutical market. In July, Quintiles, a US-based contract services provider, opened its Global Commercial Solutions business in Brazil. The business offers customised sales forces, market penetration strategies and product solutions. In addition, the company has recently announced expansions in Russia, and the Middle East and North Africa region.

Valeant Pharmaceuticals International has also invested in Brazil this year. In March, the company acquired a 19.9% minority equity investment in the research company Pele Nova Biotecnologia, which focuses on tissue regeneration.

Russia

Abbott Laboratories signed an agreement in July for several R&D projects in Russia with the country's ChemDiv Research Institute (CDRI). The two parties will be principally be concentrating on improving formulations of Abbott's existing drugs.

Pfizer has also been looking to Russia for R&D projects. In July, the company granted exclusive development and marketing rights to SatRx for their DPP(1)-IVi compound, which is being investigated as a potential treatment for type 2 diabetes.

Novo Nordisk announced in April that it had started work on its new $100-million plant in Russia. The facility, located in Grabtsevo Technopark will formulate and fill insulin into the company's Penfill and FlexPen systems for the Rusian market.

India

In August, Mylan announced that its subsidiary Mylan Pharmaceuticals Private has commenced commercial operations in India, beginning with the launch of a portfolio of 18 antiretroviral products for the treatment of HIV/AIDS. The company added that it will be looking to expand operations into the country with additional therapeutic categories.

Also in August, the Indian pharmaceutical company Cipla announced that it would be investing in India by building facilities dedicated to active pharmaceutical ingredients in Patalganga, Bengaluru and Kurkumbh. The facilities are expected to be completed in 2012–2013.

China

In August, Covidein announced the opening of its China Technology Center Research and Development facility in Shanghai. Covidien plans to invest up to $45 million over a three-year period into the centre. The facility includes laboratories, as well as a simulation suite that enables healthcare professionals to be involved in the medical device design and development process.

In June, Eli Lilly said it would increase its equity in the Chinese drug-manufacturing company, Novast, by $20 million. Novast will use the investment to establish a platform that will support Eli Lilly's branded generic-drug products and increase the manufacturing capacity at its Nantong site over the next several years.

Medicines at Top of EU's Counterfeit List

A report from the European Commission shows that fake pharmaceuticals were the top articles detained by European-Union customs in 2011. Customs seized almost 115 million products suspected of being counterfeit, up from 103 million in 2010. Approximately 24% (around 27 million) of these products were medicines, compared with just over 3 million in 2010.

Nicholas Rigg/Getty Images

In 2011, there was an increase in the number of counterfeit items that could be potentially dangerous to health and safety (i.e., food and beverages, body care articles, medicines, electrical household goods and toys). Such products accounted for 28.6% of seizures, compared with just 14.5% in 2010. The EC report attributes the increase to the large rise in medicines. In general, the increase in the number of detained articles has been attributed to rises in postal traffic, of which medicines formed a large percentage. Approximately 36% of detained items in postal traffic were medicines.

According to the report, China is the main source of the counterfeit products, accounting for 73% of all intellectual-property infringing items. The majority of the counterfeit medicines detained by EU customs in 2011 originated from China (68%) and India (28%). In 2010, almost all of the medicinal products identified by customs came from India (93%). In 2011, most articles were intercepted in Bulgaria, Italy, Greece, Belgium, and the Netherlands, compared with Greece, Italy, Spain, the Netherlands, and Portugal in 2010.

MHRA Consults on Early Access to Medicines

The UK's Medicines and Healthcare products Regulatory Agency (MHRA) has launched a public consultation regarding a scheme that could provide patients with access to unlicensed medicines in Phase II or III clinical trials. The consultation will be open until 5 October.

The scheme is expected to apply to medicines for life-threatening, debilitating, or chronic conditions that are at the end of Phase III trials or, in certain cases, at the end of Phase II. Research conducted by MHRA has shown broad support for such a scheme, particularly for patients suffering from life-threatening illnesses.

If implemented, MHRA would review medicines that companies want to make available under the scheme and provide a scientific opinion on the risks and benefits. This information would help the country's National Health Service in deciding whether the medicine should be available early.

"We have launched this consultation because we are committed to ensuring that where pharmaceutical companies want to make their new medicines available under this scheme, clinicians treating patients have access to robust scientific information to help them make appropriate treatment decisions," explained Kent Woods, chief executive of MHRA, in a statement.

In its research, MHRA emphasises that patients will need to be fully aware of the risks of taking unlicensed medicines. There were also mixed views on whether early access to medicines should be given to patients with debilitating or chronic conditions, such as rheumatoid arthritis or diseases that may cause blindness.

After receiving industry feedback, MHRA will aim to make a decision on implementing the scheme by the end of 2012.

Patients Wade into EU Pricing Debate

Patient associations have waded vigorously into the intense debate now starting on how to update the 20-year-old European Union regimen for pricing and reimbursement. Their intervention brings an additional dimension to the concerns voiced so far about this review of fundamental EU rules — notably pharmaceutical companies' fears that the outcome may mean tougher assessments of relative efficacy, or warnings from national health ministries that demands for faster decision-making are unrealistic. "The revision of the rules is important for patients," too, says the European Patients Forum (EPF) — which represents more than 50 diverse patient organisations, ranging from giants like Alzheimer Europe to smaller outfits such as the Malta Health Network or the Estonian Chamber of Disabled People.

EPF has already drafted a position on the proposals that emerged from the European Commission last February, and gave its members until the end of July to comment. It wants to be sure it is equipped to maximise patient input into the formal debates on the new legislation that will start in the European Parliament and the EU's Council of Ministers after the summer break. So EPF is liaising with the Commission, key members of the European Parliament and what it loosely refers to as "other stakeholders" to prepare the ground for influencing the debates as proposals are turned into laws.

The starting point of the draft EPF position is that "there are currently wide and unjustifiable delays in access to new medicines across the EU." One of its targets is the inconsistency displayed by national drug pricing and reimbursement regimes in Europe, which it blames for leading to inequalities in access to high-quality medical care

Read more at PharmTech.com/PricingDebate

EC Offers Aid to Former AstraZeneca Workers

The European Commission is looking to provide Sweden with €4.3 million to help 700 workers affected by AstraZeneca job cuts to find new work. The proposal is currently awaiting approval from the European parliament and the EU's Council of Ministers.

Antenna Audio, Inc./Getty Images

AstraZeneca announced plans earlier this year to axe approximately 7300 jobs worldwide. Almost 1000 of the job cuts will be in Sweden stemming from the closure of R&D sites in Lund and Umeå, and the limiting of operations in Mölndal and Södertälje. Of the 987 redundant workers, 700 who face the most difficulties in finding new jobs are being targeted for support. The estimated total cost of the support package is around €6.6 million, €4.3 million of which will come from the European Globalisation Adjustment Fund (EGF), which was established in 2006 with the aim of helping workers who have lost their jobs because of changing global trade patterns or the global financial crisis.

In a statement, the EU Commissioner for Employment, Social Affairs and Inclusion, László Andor, said, "The pharmaceutical industry is currently undergoing significant changes in order to retain its competitiveness in a tough environment, and it is therefore increasingly seeking synergies to hold down the rising costs of R&D activities."

Since the start of its operations in 2007, the EGF has received 101 applications, with more than €430 million being requested to help around 90481 workers. Applications are being received for a growing number of sectors and an increasing number of EU member states.

News bites

Gilead's Indian partnerships

Gilead Sciences is partnering with Mylan Laboratories, Ranbaxy Laboratories and Strides Arcolab to enhance access in developing countries to generic versions of its anti-HIV medicine, emtricitabine. Gilead will be providing technology transfer to its partners for the manufacture of emtricitabine.

PharmTech.com/GileadIndia

AstraZeneca restructuring

AstraZeneca's biologics arm, MedImmune, is restructuring its infectious disease and vaccines R&D and operations, resulting in the closure of MedImmune's sites in Mountain View and Santa Clara in California (US). The company estimates that 300 jobs will be affected. Of those, around 100 will move to other MedImmune locations.

PharmTech.com/AZRestructure

Sanofi in antitrust lawsuit

A District Court in the US is moving forward to hear an antitrust suit filed by a group of doctors against Sanofi. The suit alleges that Sanofi is attempting to monopolise the US meningococcal vaccine market. The physicians filing suit alleges that Sanofi wrote language into their contracts to stifle competition within the childhood vaccine market.

PharmTech.com/SanofiLawsuit

Merck Serono Spinoff

Merck Serono is using €2.1 million to fund a new start up called Prexton Therapeutics. The funding is part of an initiative to aid start ups and was launched following the company's recent restructuring activities. Prexton Therapeutics will employ scientists to work around Merck Serono's R&D portfolio in the field of Parkinson's disease.

PharmTech.com/MerckSpinOff

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Emerging markets

Generics rising in Brazil

With more drug patents reaching expiry, more generic-drug products have entered the Brazilian market in the past two years. Brazil's generic-drug market grew by 32.2% in terms of sales volume between 2010 and 2011 alone, reaching R$8.7 billion (approximately €4.09 billion).

PharmTech.com/BrazilGenerics

Russia aims for APIs

The Russian government is hoping that investments by multinational drug companies will help modernise drug production in the country. Initially, the government expects foreign companies to help bolster innovation in drugs, but ultimately wants those companies to assist in giving the country a platform for becoming a major producer of APIs.

PharmTech.com/RussiaAPIs

India's pricing controversy

India's government recently announced plans to exercise stricter control over drug pricing in its domestic pharmaceutical market. However, questions have been raised by the World Health Organisation about the plan to base ceiling prices for products within individual therapeutic groups on the group's biggest seller.

PharmTech.com/IndiaPricing

China improves distribution

China's drug-distribution system has undergone development in recent years as the government directs efforts to encourage reorganisation and mergers and acquisitions to improve the existing network. One of the main challenges however is that drug distribution remains unregulated and users often obtain drugs from unknown or unauthorised sources.

PharmTech.com/ChinaDistribution

Read more about emerging markets at PharmTech.com

News bites

FDA's stem cells authority

The US District Court for the District of Columbia has ruled that FDA has the authority to regulate stem-cell treatments as drugs. The ruling paves the way for FDA to enforce oversight over the numerous stem-cell clinics that have come into existence over the past few years.

PharmTech.com/FDAStemCells

EMA follow-up measures

The EMA is phasing out follow-up measures to marketing authorisations in place of a new classification system that will be introduced in a stepwise manner. The EMA began reclassifying outstanding unclassified follow-up measures in August. Affected marketing-authorisation holders will receive an outcome fax about the new classification.

PharmTech.com/EMAFollowUp

Rising inspections

In the coming years, the global industry is expecting more improved consistency among regulatory inspections; inspections that are well-informed by global issues; and enhanced recognition and reliance upon inspections conducted by recognised health authorities, which may reduce the total number of regulatory inspections at any one site.

PharmTech.com/RisingInspections

EU–Japan cooperation

The EMA has reported on the benefits of its increased interaction and cooperation with Japanese medicines regulatory authorities. In particular, EMA says progress has been made in the are of orphan medicines and rare diseases. Paediatrics, advanced therapies, pharmacogenomics, and nanomedicines have also benefited from the collaboration.

PharmTech.com/EMAJapan

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News bites

UK invests in stem cells

The UK is investing €10.2 million in a centre that will be dedicated to stem-cell biology and medicine, with the aim of developing therapeutic approaches to illnesses that have no effective treatments. A facility is being purpose-built for the institute on the University of Cambridge's Biomedical Research Campus.

PharmTech.com/StemCellInstitute

Silk protein innovation

Research from Tufts University in the US shows that silk protein can be used to stabilise and maintain the potency of vaccines and other drugs without the need for refrigeration. Silk stabilisation preserved the efficacy of the measles, mumps and rubella (MMR) vaccine, as well as penicillin and tetracycline, significantly better than other options.

PharmTech.com/SilkProtein

Elan spins off discovery

Elan Corp. is spinning its discovery unit and Neotope Biosciences division, which is resposinble for the discovery of the monoclonal antibody therapy Tysabri. The new entity will be called Neotope Biosciences and will focus on identifying and translating targets into potential therapies for chronic degenerative and other related disease areas.

PharmTech.com/ElanSpinOff

Novartis in cancer deal

Novartis is collaborating with the US's University of Pennsylvania to research, develop and commercialise targeted cancer therapies. In particular, the two parties will focus on targeted chimeric antigen receptor (CAR) immunotherapies. As part of the collaboration, Novartis and the university intend to jointly establish a new R&D facility.

PharmTech.com/NovartisCancer

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