Monthly Archives: April 2011

Watson Confirms District Court Ruling in Generic Fentora® Patent Suit

Watson Pharmaceuticals, Inc. (NYSE: WPI), today confirmed that the United States District Court for the District of Delaware has ruled that Watson’s generic version of Fentora® (fentanyl buccal tablets C-II) infringes United States Patent No. 6,264,981 (the ‘981 Patent). The Company said that it was reviewing the court’s decision and would evaluate all available options, including an appeal.

Watson’s Abbreviated New Drug Application (“ANDA”) for its generic version of Fentora® has been approved by the FDA.

In 2008, Cephalon sued Watson for patent infringement related to its generic version of Fentora®. On March 11, 2011, the United States District Court for the District of Delaware ruled that Watson’s product does not infringe United States Patent Nos. 6,200,604 and 6,974,590 (the ‘604 and ‘590 Patents) and that the ‘604 and ‘590 Patents are invalid.

About Watson Pharmaceuticals, Inc.

Drugs for men

Watson Pharmaceuticals, Inc. is a leading integrated global specialty pharmaceutical company. The Company is engaged in the development and distribution of generic pharmaceuticals and specialized branded pharmaceutical products focused on Urology and Women’s Health. Watson has operations in many of the world’s established and growing international markets.

Forward-Looking Statement

Statements contained in this press release that refer to non-historical facts are forward-looking statements that reflect Watson’s current perspective of existing information as of the date of this release. It is important to note that Watson’s goals and expectations are not predictions of actual performance. Actual results may differ materially from Watson’s current expectations depending upon a number of factors, risks and uncertainties affecting Watson’s business. These factors include, among others, ; the difficulty of predicting the timing and outcome of any appeal of the pending patent litigation; the difficulty of predicting the timing or outcome of product development efforts, including FDA and other regulatory agency approvals and actions, if any; the impact of competitive products and pricing; the timing and success of product launches; difficulties or delays in manufacturing; the availability and pricing of third party sourced products and materials; successful compliance with FDA and other governmental regulations applicable to Watson and its third party manufacturers’ facilities, products and/or businesses; changes in the laws and regulations; and such other risks and uncertainties detailed in Watson’s periodic public filings with the Securities and Exchange Commission, including but not limited to Watson’s annual report on Form 10-K for the year ended December 31,2010. Except as expressly required by law, Watson disclaims any intent or obligation to update these forward-looking statements.

Fentora® is a registered trademark of Cima Labs, Inc., a subsidiary of Cephalon, Inc.

Kansas Professor Receives Highest International Award for Pharmaceutical Science

A distinguished professor at the University of Kansas has won the highest international academic award given in the pharmaceutical sciences, an honor named for legendary KU pharmaceutical chemist Takeru Higuchi.

Lawrence, KS – infoZine – The American Pharmacists Association has announced that Valentino J. Stella, University Distinguished Professor of Pharmaceutical Chemistry, is the 2011 recipient of the Takeru Higuchi Research Prize.

Stella, whose mentor was Higuchi, was chosen for his contributions to pharmaceutical sciences including the novelty and originality of his research programs; his success in translating the findings into commercial products that are being used clinically to treat humans; the impact of his research findings on the industrial scientists who are responsible for discovering drugs and for developing drug formulations; and his dedication and commitment to teaching and mentoring student pharmacists and visiting scientists.

“Tak was a great mentor, and I am extremely honored and humbled to be receiving this award,” Stella said.

The award was established in 1981 in honor of Higuchi, the first president of the American Pharmacists Association Academy of Pharmaceutical Research and Science. It recognizes the highest accomplishments in pharmaceutical sciences and is open to researchers from around the world. Stella will receive the award at the association’s annual meeting March 25-28 in Seattle, Wash.

“Val is recognized worldwide for his significant contributions in the pharmaceutical sciences and is most deserving of this award,” said Ken Audus, dean of the School of Pharmacy. “The fact that the award is named for his mentor will be particularly meaningful to Val and very noteworthy in affirming that Tak Higuchi’s unique spirit of entrepreneurship has continued to flourish through a very creative and highly regarded distinguished professor in the pharmaceutical sciences at KU.”

In addition to his appointment at KU, Stella is the inventor or co-inventor on 37 patents that have led to drugs for the treatment of epilepsy, cancer and AIDS and an anesthetic. He regularly presents his research findings within academia and industry, throughout Europe, Asia and North America, delivering more than 500 invited lectures throughout his career. He has authored, coauthored or edited more than 40 authoritative review articles and seven books over the past 40 years.

“Seldom in modern history has the pharmaceutical sciences field had a scientist who was able to so frequently translate research findings into commercial products being used to treat humans,” wrote one of Stella’s colleagues in a nomination letter. “His contributions to the pharmaceutical sciences through both basic and applied research have been significant and abundant. Amongst most academic and industrial scientists working in the research areas of pharmaceutical cyclodextrin and prodrugs, Professor Stella would be considered amongst the ‘leading experts’ in the world.”

Stella, a native of Melbourne, Australia, received a pharmacy degree from the Victorian College of Pharmacy. He completed a doctorate in analytical pharmaceutical chemistry at KU, where he studied under Higuchi. Stella is a fellow of the American Association for the Advancement of Science, Academy of Pharmaceutical Sciences, American Association of Pharmaceutical Scientists and the Cyclodextrin Society of Japan.

Higuchi, known as the “father of physical pharmacy,” was a KU faculty member from 1967 to 1987. He was a pioneer of combining theoretical research with drug production, published more than 300 scientific papers and was awarded more than 50 patents. KU’s Higuchi Biosciences Center is named in his honor.

SHARES OF OPTIMER PHARMACEUTICALS RANK THE HIGHEST IN TERMS OF RELATIVE PERFORMANCE IN THE PHARMACEUTICALS INDUSTRY (OPTR, MRX, TEVA, WCRX, JAZZ)

Below are the top five companies in the Pharmaceuticals industry as measured by relative performance. This analysis was compiled based on yesterday’s trading activity as we search for stocks that have the potential to outperform.

Optimer Pharmaceuticals (NASDAQ:OPTR) ranks first with a gain of 5%; Medicis Pharmaceutical (NYSE:MRX) ranks second with a gain of 3.53%; and Teva Pharmaceutical Industries (NASDAQ:TEVA) ranks third with a gain of 2.5%.

Warner Chilcott (NASDAQ:WCRX) follows with a gain of 2.08% and Jazz Pharmaceuticals (NASDAQ:JAZZ) rounds out the top five with a gain of 1.87%.

SmarTrend currently has shares of Jazz Pharmaceuticals in an Uptrend and issued the Uptrend alert on September 20, 2010 at $10.28. The stock has risen 192% since the Uptrend alert was issued.

Healthcare Solutions Adds Industry Expert to P&T Committee

Healthcare Solutions, the parent company of pharmacy benefit manager Cypress Care, today announced it has added healthcare industry expert Sanford M. Silverman, MD, to its pharmacy and therapeutics (P&T) committee. The addition of Dr. Silverman further strengthens the company’s P&T committee, which serves as an advisory board to provide recommendations on the selection and use of medications to treat workers’ compensation and auto claimants.

Healthcare Solutions’ P&T committee reviews medication safety issues, proper drug utilization trends, drug recalls, new generic introductions, changes in FDA drug indications and drug misadventures that have occurred in the most recent quarter. The committee also focuses on emerging issues, including legislative updates and best practice pain treatment protocols prevalent in the workers’ compensation and auto markets.

Dr. Silverman has been practicing medicine for over 20 years and is in private practice as the medical director and CEO of Comprehensive Pain Medicine in Pompano Beach, Florida. He is board certified in anesthesiology with added qualifications in pain management from the American Board of Anesthesiology and a Diplomate in Pain Medicine from the American Board of Pain Medicine. He is also a Diplomate in Addiction Medicine from the American Board of Addiction Medicine. His practice consists of interventional and medical treatment of chronic pain, opioid addiction and treating complex chronic pain with hyperalgesia.

“We are very pleased to add Dr. Silverman to our P&T committee,” said Jim Andrews, R.Ph, senior vice president of pharmacy services for Healthcare Solutions. “He brings a wealth of pain management expertise to the committee and will be a valuable advisor in the development of policies regarding the evaluation, selection, and therapeutic use of drugs and related services for our customers.”

Healthcare Solutions P&T committee is chaired by Chip Robison, Pharm.D, director of clinical pharmacy services for Healthcare Solutions. Dr. Robison is a member of the Work Loss Data Institute (WLDI) Official Disability Guidelines Editorial Advisory Board and actively participates in providing pharmacy guidance to the committee. Under Dr. Robison’s leadership, the P&T committee recently developed customized, claim age-specific formulary design as well as formulary enhancements to assist non-subscriber customers. He also serves as clinical preceptor for pharmacist interns with the Academy of Managed Care Pharmacy, The University of Georgia and Mercer University. The P&T committee continues to monitor the impact of the Food and Drug Administration’s risk evaluation and mitigation strategies (REMS), as well as the state-specific adoption of the Official Disability Guidelines.

About Healthcare Solutions

Healthcare Solutions, Inc. is the parent company of Cypress Care and Procura Management. Through its affiliated companies, Healthcare Solutions serves as a health service company delivering integrated solutions to the property and casualty markets, specializing in workers’ compensation and auto liability/PIP. The company’s customers include insurance carriers, third party administrators (TPAs), managed care organizations (MCOs), government agencies and self-insured employers. Utilizing market-leading technology, Healthcare Solutions delivers demonstrated benefits and savings complemented by deep industry expertise.

Sheikh Hamdan Bin Rashid Inaugurates DUPHAT Conference And Exhibition

H.H. Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and President of the Dubai Health Authority, inaugurated today the International Pharmaceuticals & Technologies Conference & Exhibition – (DUPHAT) at the Dubai International Convention and Exhibition centre. His Highness Sheikh Hamdan was accompanied by H.E Qadhi Saeed Al Murooshid Director General of Dubai Health Authority and a number of local and international representatives and heads of delegations.

Following the traditional inauguration ceremony and the ribbon-cutting, H.H. Sheikh Hamdan Bin Rashid congratulated the organizing committee for the success achieved by DUPHAT conference and exhibition over the past sixteen years, he also emphasized that DUPHAT is a continuing education forum and platform for professional interaction and scientific discourse. His Highness also had a tour in the exhibition and explored the latest Pharmaceutical Technologies displayed by national, regional and international pharmaceutical industry players.

His Highness was impressed by the continuous growth achieved every year, he also said that this tremendous turnout reinforces the role of Dubai as a regional hub for major international companies who are looking forward to promoting their products from Dubai to the Middle East and the world Market.

H.E. Qadhi Saeed Al Murooshid, Director General – Dubai Health Authority said “DUPHAT is classified as one of the major specialty event which brings us the latest technical updates from the pharmaceuticals industry on regional and international levels, as it is recognized and accredited by the Dubai Health Authority and many international scientific organizations that serve the pharmaceutical industry”.

“The Dubai Health Authority is keen to support all the associations that are working along with the health sector. We are also keen to provide and encourage training courses and continuous education programs for pharmacists, to maintain and raise performance levels.” Continued Al Murooshid

H.E. also said that the pharmaceutical industry in the UAE and the GCC is attracting more local and international investments in this field. He also stated that there are a number of new pharmaceutical production facilities that have been established to go into production in the near future under the supervision and support of the governments.

H.E. Khalid Al Sheikh, Assistant Director General (Finance and Administration) Dubai Health Authority said in his speech at the opening ceremony of the DUPHAT Conference “the United Arab Emirates strives to make the health of its residents a priority, therefore it pays special attention to the healthcare sector in the UAE, which is evolving year after year and at the same time facing some challenges that we work diligently to resolve”.

He also added that the Dubai Health Authority is providing the best heath services according to international standards. The DHA also believes that public involvement assists the development of the healthcare and pharmaceutical sectors; therefore, the DHA strives to adopt new educational strategies that include patients and public awareness.

Dr. Ali Al Sayed Director of Pharmaceutical Services Department at the Dubai Health Authority and the conference chairman said “This year, DUPHAT conference includes 52 lectures and sessions and 30 workshops delivered by 70 renowned speakers, whom are deans, university professors, consultants, and seniors from prestigious pharmaceutical associations that are covering a variety of specialized pharmaceutical topics. Concurrent to the three-day event there shall be 76 Professional Poster Presentations and 81 Student Poster Presentations. Posters will be evaluated by a jury from highly reputed universities.”

DUPHAT conference will discuss many pressing pharmaceutical issues such as; Reinventing Pharmacy Practice, Science, Research & Marketing, Oncology Pharmacy, Therapeutic Drug Monitoring, Patient Safety Issues and more.

DUPHAT conference and exhibition is organized by Index Conferences and Exhibitions Organisation Est. – member of INDEX Holding and in cooperation with the Dubai Health Authority. It is classified as on of the largest events dedicated to the pharmaceutical field and related technologies, as it is approved and accredited by the Dubai Health Authority in addition to a number of international scientific organizations specialized in this field.

DUPHAT Conference and Exhibition is considered one of the leading medical events in the region for its great scientific conference and exhibition. Its reputation and name holds a special value for the business leaders within this industry. Pharmacists and businessmen alike find DUPHAT to be a great platform where they can meet peers from other countries, exchange knowledge, and discuss latest pharmaceutical updates. The conference offers high end sessions for three days lectured by leaders of the industry.

DUPHAT exhibition is a perfect chance for new business hunters to go through the latest pharmaceutical products and technologies displayed at the exhibition by top pharmaceutical companies. The continued increase in the number of pharmacists participating in the conference as well as visitors highlights the major role played by Dubai as a host to the most prominent international medical conferences. It is expected that the number of visitors exceeds 10,000 visitors and participants.

More than 300 companies participating from 73 countries which reaffirm Dubai’s status as a global hub. Moreover, many countries are participating in the exhibition under their country pavilion such as; India, China, Egypt, Bangladesh, Canada, Italy, Germany, the United Sates of America, Kingdom of Saudi Arabia, Qatar, France, Netherlands, Iran and the United Arab Emirates.

Pharmacy Benefit Firms Await Generic Drug Paydays

What’s bad news for Big Pharma but good news for pharmacy benefit management companies? The fo impending loss of patent protection on some of this country’s biggest selling drugs.

The big PBMs are chomping at the bit, waiting eagerly for Pfizer’s (NYSE:PFE) big cholesterol drug Lipitor to go generic later this year. That’s because blockbuster generics are highly profitable for PBMs, especially those delivered through their extensive mail-order pharmacies.

Three public companies currently dominate the PBM market: Express Scripts (Nasdaq:ESRX), CVS/Caremark (NYSE:CVS) and MedcoHealth (NYSE:MHS). An industry group estimates that together they account for more than 35% of the market, with Express Scripts the leader at about 13.5%.

The number of top-selling drugs slated to go generic during the next several years is just one reason to be enthusiastic about the prospects for the PBMs. Others include the growing role of prescription drugs as the first line of treatment for many medical conditions, the expansion of health care to greater numbers of people, and the aging population with its impending retirement of the baby boomers.

Also, proving that size does matter, the big three in the industry might be able to extract deeper discounts from drug manufacturers and retailers, forcing a consolidation among the smaller players.

That may have been the reason Walgreen (NYSE:WAG) recently jettisoned its relatively small PBM, selling the unit to Catalyst Health (Nasdaq:CHSI). Even with the additional Walgreen business, Catalyst will have only a 5% share.

One analyst said the Walgreen sale signals to investors that it doesn’t make sense for a retail pharmacy to own a PBM. CVS Caremark may be leaning in that direction after reporting that its pharmacy services business declined more than 6% in 2010. One has to wonder if the unit’s tepid results is one reason the company’s share price is down about 10% from its 52-week high of $37.82.

MedcoHealth shares have also suffered, but for another reason. After a more than 40% price jump from September 2010 to mid-January 2011, Medco has recently headed south. In less than three weeks, the stock has dipped to $52.45 from $64.35.

Alleged hanky-panky involving a key customer certainly has something to do with the nosedive. Calpers, the California state pension fund, recently declined to sign a new contract with Medco as it looks into “possible improprieties” in the signing of its last contract. One analyst estimated that the Calpers contract will cost MedcoHealth about 3 to 5 cents of EPS, but said the damage to the company’s reputation could weigh disproportionately on its shares.

The picture is brighter for industry leader Express Scripts. Its share price has just about doubled in the past year, closing at $52.05 on Monday. Some say the run may be losing steam and express caution about buying the stock now. Analysts following the company seem to agree; the last three have downgraded the stock to two holds and a market perform.

An even better bet for investors sold on the future of PBMs but seeking broader health care coverage might be the ETF iShares Dow Jones US Healthcare Provider (NYSE:IHF) exchange-traded fund. More than 16% of its assets are in Express Scripts and Medco.

Michigan’s Drug Industry Immunity Law: Michigan Citizens, Fight for Your Rights!

In 2004, Merck pulled the arthritis drug, Vioxx, off the market because it caused serious heart and other health problems. The State of Michigan sued Merck to recover millions spent for Medicaid patients, alleging that Merck made false claims in representing the safety and efficacy of Vioxx.

Now, the Michigan Court of Appeals has ruled against the State in a prescription drug case which could cost the state millions of dollars. The irony here is that Michigan’s former Governor Engler and the Michigan legislature is responsible for this “taste of their own medicine” by passing this grossly unfair, total immunity statute for the benefit of drug manufacturers. They passed this legislation to cause pain to trial lawyers and their prospective clients, but, ironically, they also screwed the State out of millions in Medicaid reimbursement. And, as ususal, the cruel joke is on the taxpayers. In a 2-1 decision, the Appeals Court ruled that the State, itself, cannot sue Merck for fraud. The Court said that the drug company is protected by 1995 Michigan’s drug liability immunity law, which grants immunity to drug makers for any drug that has been approved by the FDA. (What drug reaches an American pharmacy shelf without FDA approval? This law amounts to total immunity for drug manufacturers!) Even if it is later found to be harmful or deadly, the drug manufacturer cannot be held liable.

Michigan’s immunity statute is the only one of its kind in the United States, and it is causing severe harm to the people and the state. Michigan residents have no legal recourse after being victimized by the negligence of the multi-billion dollar drug industry. This immunity results in huge profits for the drug industry and uncompensated tragedies for the victims of these bad drugs. It is really that plain and simple. Merck profited $2.3 billion from Vioxx in the first year alone. Michigan is allowing drug makers to kill and disable people with deadly drugs while the industry is guaranteed mammoth profits. Why should the people of Michigan pay the bill for drug makers who kill with dangerous products? In other states, citizens can sue the manufacturers for the damages they cause; these lawsuits and the potential compensation due helpless victims are a serious deterrent to negligent conduct. But, sadly, not in Michigan, where the quality of life and the safety of its citizens was deemed subordinate to corporate profits.

While then Governor Engler promised that the immunity law would reduce the cost of prescription drugs and save Michigan drug industry jobs, that didn’t happen. Two years after the law went into affect Pfizer left Michigan taking 2,100 jobs. Eventually and thankfully, Governor Engler left, too. Soon, Michigan residents found that they were the only American citizens unable to receive compensation from injury or death stemming from taking an FDA-approved drug. Ironically, one such victim was a doctor who had spent his life treating families with ADD before suffering a stroke. He later recalled that he had taken Vioxx for a herniated disc in his neck. He cannot pursue compensation; attorneys cannot assist him because he is from Michigan. Of course, he blames Gov. Engler and his supporters.

The “tort reform” lobby was heavily invested in Engler and his cronies and it is substantially responsible for this gross injustice. This anti-justice lobby, of course, blames the trial lawyers and frivolous lawsuits and claims that industry needs protection from litigation. But, dangerous drugs that kill and disable is not a “frivolous” matter. Why does this billion dollar industry deserve total protection in one State? Trial lawyers do not kill and injure people with dangerous drugs. Trial lawyers are the “drug police”; they protect and serve victims of negligence, much like the real police protect us from becoming victims of crime. If drug companies did not manufacture and sell dangerous and fatal drugs, there would be no injuries or deaths, no victims, and their loved ones would not have to seek compensation and justice. Manufacturing and selling safe drugs is the only way a drug manufacturer should be “immune” from suit.

Injury Board Member, David Mittleman, says he constantly turns away victims who have been injured by drugs; it is not because their cases are frivolous. Dr. Cox agrees that this immunity law has nothing to do with reducing frivolous lawsuits. “I’d be all for a law like that (one that reduces “frivolous” lawsuits). I think that’s what people think they’re getting with tort reform.” After being around other people injured by drugs, he now says, “The people I’ve seen, they’re not frivolous cases.”

As reported by Mittleman in a recent Injury Board post, Michigan State Representative Lisa Brown has introduced a bill that would “end this inexplicable pro-corporation, anti-consumer policy.” Representative Brown is leading the push to hold drug companies accountable when their products harm, maim, or kill innocent Michigan citizens. She plans to fight for personal safety over corporate profits. Why shouldn’t Michigan residents have the same rights as all other Americans?

In the last four years, this corrective legislation has twice passed the Michigan House, but was blocked in the Senate. It almost passed in 2007 before it hit two bottlenecks – Senators Wayne Kuipers and Mike Bishop. Michigan residents are still left helpless when they or a loved one fall victim to one of these dangerous products. Putting citizens at such risk, without the right to pursue litigation, is ludicrous and, viciously, anti-citizen. Lisa Brown says:

“For years we’ve had legislation ready that would help countless Michigan families whose lives have been turned upside down by the drug industry… Michigan lawmakers have repeatedly failed our residents by not passing this legislation. It’s unbelievable to me that people have been severely injured and lives have been lost – and yet this plan is still not law. We have a duty to protect the health, welfare and rights of our residents and the Legislature needs to do its job and end drug industry immunity in Michigan.”

Session to highlight growing local food industry

The local food movement has been one of the important trends in food production and marketing during the past decade. More consumers want to know who is producing their food and how they are raising their food. Benefits of local foods include fresher products, more income for farmers and a stronger local economy.

A public meeting on local foods in Muskingum County will be at 7 p.m. April 6 in the Extension Office meeting room, 225 Underwood St. Both farmers and consumers are encouraged to participate. Discussion will include what local food assets exist in Muskingum County, how local foods might be better promoted and what future strategies could be developed to provide more local food for residents.

If you are interested in participating in this meeting, call the Extension Office at 454-0144 to make a reservation. Particiaption is free, and the public is welcome.
HEALTH FAIR FOR FARMERS

OSU Extension, Northside Pharmacy and Farm Bureau are sponsoring a health fair for farmers from 4 to 7 p.m. March 29 at the Center for Seniors in the Sunrise Center. Farmers have some specific health issues that relate to their exposure to the weather, pesticides, chemicals, livestock and airborne particles.

Health screening activities will include consultations with a pharmacist, blood pressure checks, lung function checks, dermavision-scanning for skin cancer, bone density scans ($20 per person), chiropractic screening and short massages. A number of exhibitors and vendors relating to health also will be present.

Participation is free (except for bone density scan) in the event, and the pubic is welcome. Farm Bureau members will receive workers’ compensation credit for participating in an educational program presented at 7 p.m. that evening on “First Aid on the Farm,” by Kent McGuire, Ohio State University Extension Agriculture Ability Specialist. Call the office if you have questions. Reservations are not needed for this activity.

Company President Is Prescribed Membership With Stanford Who’s Who

Stanford Who’s Who welcomes Nara Demie to the ranks of leading professionals as a result of her phenomenal work in the Pharmaceutical Industry. As President of RegCom Inc., as well as throughout her incredible 25 years in the field, Nara has consistently demonstrated the vision, dedication and diligence necessary to be considered among the best.

RegCom is a global management consulting firm and a trusted advisor to the world’s leading businesses, governments, and institutions. Over the years, Nara has developed significant expertise to assist clients in the worldwide pharmaceutical, biotechnology, natural products, cosmetics, medical device, and fine chemicals industries with the development and launch of their products in order to bring safe and effective treatments to the global marketplace for the patients who need them.

RegCom was founded in 2000, at a time when new challenges required a totally different approach. They have had numerous clients compliment the way they do business and how they adapt to meet challenges. Their ability to scale up or down to meet client needs whilst retaining the high service quality puts the company in an enviable position within the industry. RegCom has been steadily growing, leading to their recent entry into the international market. They have successfully assisted several companies with the process of entering the Canadian market in a short period of time.

Nara is responsible for managing all major aspects of the business as well as overseeing the daily operations. During her collegiate career, she earned a Pharmacy degree. Nara is a member of the Pharmaceutical Sciences Group and the Canadian Association of Professional Regulatory Affairs.

Industry groups unite to secure central healthcare role for pharmacists

Much has changed in the year since President Obama signed the Patient Protection and Affordable Care Act, better known as healthcare reform. And much remains the same.

The prospect of reform prompted many competing pharmacy groups to submerge their differences and present Washington with a unified program focused on medication management and enhanced roles for pharmacists. The National Community Pharmacists Association (NCPA) is still saying nice things about the National Association of Chain Drug Stores (NACDS), and vice versa. The American Pharmacists Association (APhA) is openly sharing credit for pharmacy’s successes with other organizations, and the American Society of Health-System Pharmacists (ASHP) is touting the key role that hospitals can play in improving healthcare.

“It’s pretty clear that when you have industry groups that cannot come to a common position, members of Congress are not going to give you the time of day,” said Steven C. Anderson, IOM, CAE, president and CEO, NACDS. “The relationships that we have all built within the industry are a huge part of our success.”

Chief executives from key pharmacy organizations met in mid-2010 to reinforce the coalition, said Thomas E. Menighan, BS Pharm, MBA, executive vice president and CEO, APhA. The joint message is that the fight to move pharmacy into a central healthcare role has just begun.

Pharmacy needs to push pending legislation such as S. 274, which would expand access to medication therapy management for all Medicare recipients with at least one chronic condition.
Pharmacy needs to talk on a daily basis with the Congressional Budget Office (CBO) and regulators at the Centers for Medicare and Medicaid Services (CMS), the Federal Trade Commission (FTC), and state agencies nationwide.
Pharmacy needs to present its own proposals to the CMS Center for Medicare and Medicaid Innovation (CMMI), not just react to proposals advanced by other provider groups.

Working together is the right idea, said Stephen W. Schondelmeyer, PharmD, PhD, director, PRIME Institute, University of Minnesota, Minn. He is also a member of the Drug Topics editorial board.

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“Cooperation is necessary, but not sufficient for success,” he cautioned. “Sufficient is when you are sitting at the big table, talking with the real decision-makers, not just talking to each other. There is movement in the right direction, but more needs to be done. Pharmacy needs to connect at the national, state, and local levels. Decision-makers need to say ‘pharmacy’ every time they talk about hospitals, home health, long-term care, state agencies, Medicaid, Medicare, medical homes, providers, accountable care organizations, primary care, and all the other issues that are being discussed. The window is closing as we speak. Pharmacy has to move quickly.”

The pharmaceutical industry has already gotten pharmacy and pharmacists written into larger roles in a healthcare delivery system that is about to balloon. An estimated 32 million Americans who are currently without health coverage will gain coverage over the next few years, including 16 million new Medicaid beneficiaries. Millions of Medicare recipients will be affected as the Medicare Part D coverage gap known as the “donut hole” is closed. Medication therapy management (MTM) has become a priority, with $10 billion in new funding to create innovative models. Pharmacists can expect to play a direct role in all these areas.

“Healthcare reform gave pharmacists a vehicle to talk about the role pharmacy can play,” Anderson said. “Pharmacists are becoming the visible face of community healthcare in the United States. After the economy and jobs, healthcare is going to remain front and center for members of Congress and for regulators.”

Pharmacy can’t claim sole credit for focusing healthcare reform on reducing costs, improving quality, and increasing medication adherence. But the profession deserves credit for seizing the opportunity to help shape the future.

“We started planning back before the 2008 election,” said John Coster, PhD, RPh, senior vice president of government affairs, NCPA. “We realized we had a chance to make a lasting impact. It was important to leverage our collective impact, and we did.”

The list of changes that took effect in 2010 is short but significant, Coster continued.

To curb fraud and abuse, legislation granted pharmacies limited exemption from accreditation requirements applied to other dealers of durable medical equipment.
The long-standing battle over pharmacy reimbursement for generic drugs reached a preliminary conclusion when the federal government abandoned definitions of “average manufacturer price” (AMP), which pharmacy groups first challenged in 2005. Legislation directs CMS to set reimbursement for generic drugs at no less than 175% of AMP. “It was extremely important that the new definition of AMP more closely match what our members see in the actual purchasing,” said Carol Kelly, senior vice president, government affairs and public policy, NACDS. “That resets the federal upper limit (FUL) calculation for Medicaid reimbursement at a more acceptable amount.”
The most important change from 2010 is probably the least visible. Pharmacy is receiving a positive reception in the White House, on Capitol Hill, and most important, in the warren of regulatory offices and agencies that write the rules that turn legislation into action.

“We are moving from a state of talking with Congress about the importance of pharmacists to talking with regulators who are moving us toward new care models,” said Joseph Hill, director, federal legislative affairs, ASHP. “The message that is coming through on all levels is that every new model must include pharmacy. Congress laid down the law on MTM and adherence.”

Take the new accountable care organizations (ACOs) that come into effect in 2012. CMS must launch pilot ACO programs and issue regulations in 2011 to lay the groundwork for full implementation next year.

Congress accepted the concept that improving quality of care reduces the overall cost of care, Hill said. CMS must reward ACOs that boost quality by sharing the cost savings linked to quality improvements.

“It’s a coordinated effort,” he said. “Hospitals can be very major players. They already have the physical facilities and the caregivers, including highly trained pharmacists.

He added, “There may be skepticism about just how much money can be saved. There may be antitrust issues and questions about self-referral that have to be addressed through the FTC, CMS, and other agencies.”

However, “hospitals are supporting this and pharmacists are supporting this,” he said. “There is no pushback.”

Fette opens pharma testing centre in Goa

Chennai-based Fette Compacting Machinery India Pvt Ltd (FCI), the Indian subsidiary of the Germany-based machine tool manufacturer Fette Compacting, has launched competence centre in Goa to provide tablet compression testing and related services for pharmaceutical industry in India.

The company, which imports and serves tablet pressing machines to the Indian pharmaceutical companies, would provide laboratory facilities for compression trials and sample production, basic trials to analyse material properties of tablet mixture and support in proof of concept studies for Indian clients through the facility, said Venkatasubramanian, managing director, FCI.
The competence centre is set up with an investment of around Rs 5 crore. The facility is also equipped as a training centre to provide hands on training to the employees of the pharmaceutical clients to handle the high end machines.

The centre is basically to support our clients in India, both the domestic and multi national pharma companies which has manufacturing facilities in India, to test and analyse the flowability and compressibility of their tablets thus improving the quality of the end products, said Venkat.
Besides, the company is also evaluating options to set up an engineering and development centre to develop machine tools for Indian pharmaceutical industry.

At present, the machines are imported from China and Germany for Indian customers. Plans to set up a development centre in India is on the drawing board, but is in a nascent stage to reveal more, he said.

FCI, launched in India in 2006 as a division of Fette Germany, became a subsidiary company in 2010. It has so far installed around 80 machines in the country and targets to complete sales of around 35 to 40 machines this year.

In the last fiscal year, the company has closed revenue of around Euro 10 million (approximately Rs 64 crore). It is expecting to clock in a revenue of around Euro 14 million (approximately Rs 88 crore), he added.

Chennai-based Fette Compacting Machinery India Pvt Ltd (FCI), the Indian subsidiary of the Germany-based machine tool manufacturer Fette Compacting, has launched competence centre in Goa to provide tablet compression testing and related services for pharmaceutical industry in India.

The company, which imports and serves tablet pressing machines to the Indian pharmaceutical companies, would provide laboratory facilities for compression trials and sample production, basic trials to analyse material properties of tablet mixture and support in proof of concept studies for Indian clients through the facility, said Venkatasubramanian, managing director, FCI.
The competence centre is set up with an investment of around Rs 5 crore. The facility is also equipped as a training centre to provide hands on training to the employees of the pharmaceutical clients to handle the high end machines.

The centre is basically to support our clients in India, both the domestic and multi national pharma companies which has manufacturing facilities in India, to test and analyse the flowability and compressibility of their tablets thus improving the quality of the end products, said Venkat.

Besides, the company is also evaluating options to set up an engineering and development centre to develop machine tools for Indian pharmaceutical industry.

At present, the machines are imported from China and Germany for Indian customers. Plans to set up a development centre in India is on the drawing board, but is in a nascent stage to reveal more, he said.

FCI, launched in India in 2006 as a division of Fette Germany, became a subsidiary company in 2010. It has so far installed around 80 machines in the country and targets to complete sales of around 35 to 40 machines this year.

In the last fiscal year, the company has closed revenue of around Euro 10 million (approximately Rs 64 crore). It is expecting to clock in a revenue of around Euro 14 million (approximately Rs 88 crore), he added.

FDA Position on Intravenous Vitamin C Limits Access, But Does Not Render Vitamin C-IV Unlawful

On December 28, 2010, FDA issued a Warning Letter to McGuff Pharmaceuticals claiming that certain injectible Vitamin C products were unapproved new drugs. Many in the industry took the warning letter to stand for the proposition that the FDA would not allow any Vitamin C injectible products to be made available to patients. Speaking on behalf of the Vitamin C Foundation, Owen Fonorow, Director and Co-Founder, corrected that misimpression, stating that Vitamin C injectible products can still be made available to physicians under certain conditions from compounding pharmacies.

“FDA relies on its well-established authority to regulate new drugs when it prohibits the mass manufacture and sale of injectible Vitamin C,” said Fonorow, “but that does not mean that all sources of injectible Vitamin C are illegal.” The Vitamin C Foundation obtained the opinion of constitutional and regulatory law experts Emord & Associates. “Our attorneys examined FDA’s recent Warning Letters and enforcement activity and have explained to us the legal options available,” he said. “Vitamin C is already an approved active ingredient in several FDA regulated drug products,” Fonorow continued, “and the United States Pharmacopeia lists ascorbic acid for injection.” According to Fonorow, that means Vitamin C can remain available for injection by physician prescription. Fonorow explained that “compounding pharmacies can supply Vitamin C for injection or intravenous administration pursuant to a valid physician prescription and in limited quantities without the products becoming new drugs under the Food, Drug, and Cosmetic Act. FDA is prohibited by the Food, Drug, and Cosmetic Act from regulating the practice of medicine,” he said. The Vitamin C Foundation understands that manufacturers may still provide compounding pharmacies with pharmaceutical grade vitamin C in limited amounts necessary to fulfill the pharmacy’s compounding needs.

As for the McGuff Warning Letter, Fonorow had this to say: “The warning letter tells us that companies cannot mass manufacture vitamin C for injection or intravenous administration without FDA drug approval.”

About the Vitamin C Foundation

The Vitamin C Foundation is a national nonprofit, charitable organization dedicated to preserving and promoting scientific information about ascorbic acid – vitamin C. Members and technical advisers include scientists, licensed medical doctors and interested parties from around the world. The Foundation dedicates its work to the memory of noted vitamin C expert and Nobel laureate Linus C. Pauling.

Owen Fonorow is a co-founder and currently heads the Vitamin C Foundation. Owen is a United States Air Force Academy graduate and has authored numerous health articles and the recent book Practicing Medicine Without A License: The Story of the Pauling Therapy for Heart Disease. His Foundation has been assigned the IRS tax-exempt 501(c)(3) designation as a Texas non-profit corporation. The foundation’s activities are funded by charitable contributions.

Ahead of the Bell: Medco says CalPERS ends talks

A Jefferies & Co. analyst said Thursday that Medco Health Solutions Inc. will lose about $500 million in annual revenue after a contract with a California public workers union expires, but added that the loss will have a “minuscule” effect on the pharmacy benefits manager.

Medco said Wednesday that the California Public Employees’ Retirement System, or CalPERS, will not renew a contract with the company, which is based in Franklin Lakes, N.J. Their current contract will end Jan. 1, 2012. Medco said the contract would not have a significant effect on its results.

But analyst Arthur Henderson said shares of Medco and other pharmacy benefits managers are compelling. The industry is preparing for a wave of pharmaceutical patent expirations that will bring generic versions of drugs like Lipitor and Plavix to the market, expanding profits for Medco and competitors like Express Scripts Inc. and CVS Caremark Corp.

Henderson said the loss of the contract will reduce Medco’s profit by about 7 cents per share in 2012. He expects Medco to earn about $5 per share that year, which means the contract loss is not a major negative for the company. He kept a “Buy” rating on the stock, with a price target of $73 per share.

Medco shares have traded between $43.45 and $66.70 in the last year, and they finished at $56.23 Wednesday.

Supply issues ‘embedded’ in pharmacy workload, says NPA

Medicines supply problems have become so severe that they are now simply “embedded in the working lives of pharmacists”, the NPA has warned.

The association said stock shortages had become so routine that fewer pharmacists were now complaining about them, although many still reported difficulties obtaining medicines.

Other industry leaders praised pharmacists “sheer perseverance” in sourcing medicines, but said the sector should push for supply chain improvements.

“Initially we had many calls expressing utter disbelief at the hoops that need to be jumped through to obtain stock,” said Leyla Hannbeck, head of information at the NPA.

She said the association had noticed a slight decline in the number of calls from pharmacists complaining about shortages, but that this was not an indication that things were getting better. “The drop off can be explained by the fact that dealing with supply problems has become so embedded in the working lives of pharmacists,” she said.

And the association now received “a huge number of calls from pharmacies who are desperately looking for alternative products”, she said.

Ms Hannbeck urged pharmacists to continue reporting supply problems, and Martin Sawer, executive director of the BAPW, said it was vital that pharmacists didn’t accept the problems.

“Most pharmacists are spending time each week phoning around to obtain medications,” he said. Even if contract payments covered this work, he said it seemed “crazy” that this was being embedded in pharmacists’ workload.

The Royal Pharmaceutical Society added to the criticism of the supply chain. “Were it not for the sheer hard work and perseverance of pharmacists in sourcing medicines for patients, many would have to wait far longer than they do already,” a spokesperson said. “It should be a matter of regret to all parties involved in the medicines supply chain that problems are continuing.”

Catalyst Health Solutions Shares Creeping Higher, Up 1.3% (CHSI)

Mar 18, 2011 (SmarTrend(R) Market Surveillance via COMTEX) — Catalyst Health Solutions (CHSI) is one of today’s notable stocks on the rise, up 1.3% to $54.04. The S&P is currently trading 0.8% higher to 1,284 and the Dow Jones Industrial Average is trading 1% higher to 11,892.

Catalyst Health Solutions is in SmarTrend’s Pharmacy Services industry and this industry is currently in an Uptrend according to our research. We are monitoring many other stocks on the move within this industry.

In the last five trading sessions, the 50-day MA has climbed 1.2% while the 200-day MA has risen 0.76%.

In the past 52 weeks, shares of Catalyst Health Solutions have traded between a low of $31.40 and a high of $56.18 and are now at $54.04, which is 72% above that low price.

SmarTrend currently has shares of Catalyst Health Solutions in an Uptrend and issued the Uptrend alert on February 17, 2011 at $45.98. The stock has risen 16.1% since the Uptrend alert was issued.

Managed Health Care Associates, Inc. (MHA) Hosts Eighth Annual Long Term Care Business Summit

Managed Health Care Associates, Inc. (MHA), a leading health care service company focused on alternate site health care providers, is hosting its 8th Annual MHA Business Summit for Long Term Care Pharmacies and other Long Term Care stakeholders on March 17th-18th at ARIA at CityCenter in Las Vegas, Nevada.

The two-day Summit will focus on the developing landscape facing the LTC pharmacy industry under the new Healthcare Reform Act. There will be formal sessions related to the regulatory, legal, and financial issues within the LTC pharmacy space, with an emphasis on proactive strategies to maximize opportunities in this changing healthcare setting including a summary of the results of the 4th Annual MHA Long-Term Care Member Survey. The 2011 Business Summit will have two keynote speakers – The Honorable William H. Frist, MD, the 18th Majority Leader of the United States Senate and John F. Crowley, biotechnology pioneer and Chairman & CEO of Amicus Therapeutics.

Michael J. Sicilian, MHA President commented, “When we started this conference eight years ago we recognized the need for an industry meeting dedicated to our members and stakeholders that would assist them in the sharing of ideas and ways to improve the respective industry. The meeting has evolved into one of the best attended and most comprehensive events focused on the day to day challenges facing the LTC industry. We are expecting record attendance with over 700 participants representing the critical industry stakeholders including LTC pharmacies, pharmaceutical manufacturers, medical product and service suppliers, drug wholesalers and Prescription Drug Plans. Our members continue to rely on MHA to gain better insight on the most important topics impacting the LTC Pharmacy industry as they participate in open forum discussions with colleagues and business partners. Due to the success of this annual event, MHA will be expanding the meeting in 2012 to include participation for the rest of our alternate site health care provider members with dedicated sessions focused on infusion, specialty pharmaceuticals and business solutions. Within the coming weeks we plan to release details on the 9th Annual MHA Summit to be held March 1st – March 2nd, 2012 at ARIA at CityCenter in Las Vegas, Nevada.”

Taskforce set up to check spurious drugs

A 12-member committee headed by the Indian Council of Medical Research ( ICMR) director-general V M Katoch has been constituted to asses the quantity of spurious drugs floating in the market using anti-counterfeit technologies and recommend measures to address the issue.

The drug taskforce will be looking into step needed to promote indigenous production of bulk drugs and preventing the take over of Indian pharma industry by multi-national companies.

The taskforce has representatives from National Pharmaceutical Pricing Authority, Department of Industry Policy and Promotion, Indian Drug Manufacturers Association, Mumbai, Indian Pharmaceutical Alliance, Mumbai, Organisation of Pharmaceutical Producers of India, Mumbai, among others.

“The taskforce will submit its report within a time period of three months. It will recommend measures to tackle the problem of spurious drugs — use of anti counterfeit technologies as well as consider and advice on any other issue incidental to the above,” said a health ministry official. The constitution of the taskforce comes close on the heels of Union health minister Ghulam Nabi Azad recently meeting with the drug manufacturers.

According to health ministry’s estimates, 5.6% of drugs in the country don’t adhere to standard quality.

OxyContin prescriptions by Ontario MDs vary greatly, study finds

Some doctors are writing significantly more prescriptions for such powerful painkillers as OxyContin than their colleagues, a new study suggests — a practice some are blaming on the influence of pharmaceutical companies.

A new study highlights the issue of opioid-related deaths, which have surged in recent years to the point where they are now considered more common in North America than deaths from HIV. The report, which looks at data from 2006, was published in this month’s issue of Canadian Family Physician.

It found Ontario’s most frequent opioid-prescribing family doctors wrote 55 times more prescriptions for the narcotics than physicians who prescribed the drugs the least.

Those doctors handing out the most prescriptions had the highest numbers of patient deaths linked to the drugs, according to researchers at St. Michael’s Hospital and the Institute for Clinical Evaluative Sciences, both in Toronto.

“We know that the drugs are useful in particular patient populations, and we also know that they’re potentially very dangerous,” said the study’s lead author, Dr. Irfan Dhalla, who called the variation in prescription rates striking.

“The drugs need to be used and prescribed with great care.”

A 2009 report by the College of Physicians and Surgeons of Ontario found that opioid-related deaths in Ontario increased 49 per cent between 2002 and 2006.

Deaths linked to oxycodone — the active ingredient in OxyContin, also known as Hillbilly Heroin — shot up 240 per cent between the same years.

Dhalla is calling for better education of physicians when it comes to appropriately handing out the drugs.

“I think education needs to occur at all levels,” he said. “Medical students don’t receive enough education about these issues, and until recently at many universities, the education was being delivered — at least in part — by people who have ties to the pharmaceutical industry and were presenting information that was potentially biased.”

St. Michael’s physician Dr. Philip Berger pointed to pressure from the pharmaceutical industry as a reason for the spike in prescriptions.

“It is important to recognize that one reason opioids are prescribed so often is that the pharmaceutical industry has marketed these drugs very aggressively,” Berger said in a statement.

He later told Postmedia News that pharmaceutical companies’ “unethical and unbelievably aggressive marketing” practices are unfairly influencing Ontario’s overstressed family physicians.

“With that nudge and push from the pharmaceutical companies, they may be more eager to just prescribe a drug without exploring other methods of relieving pain,” he said. “They make it appear that it’s normal to prescribe medications in situations where they should not be.”
The University of Toronto revised the curriculum for one of its pain-management courses in 2010 after a 371-page pain-management book funded and copyrighted by Purdue Pharma, the manufacturer of OxyContin, was distributed to students in the course.

From 2002 to 2006 the course was funded in part by donations from drug companies — a practice the U of T curtailed in 2007.

Purdue Pharma, the manufacturer of OxyContin, could not be reached Tuesday for comment.

The study looked at prescription records for Ontarians aged 15 to 64 who qualified for provincial drug coverage.

In 2006, 166 of the 408 people in the province whose deaths were linked to opioid use received at least one prescription for the drugs in the 12 months prior to their death.

Of that group, 102 received their final prescription before death from a family physician.

Sixty-two per cent of patients who died while in the care of a family physician had a doctor who was among the group of most frequently prescribing physicians.

According to the Ontario government, between 1991 and 2009 the number of prescriptions for oxycodone skyrocketed 900 per cent.

The drug is about 1.5 to two times more powerful than morphine.

The Ontario government responded in November 2010 with the Narcotics Safety and Awareness Act, which will allow the Ministry of Health to monitor the prescription of opioids and stop addicts from obtaining drugs from multiple doctors at the same time.A spokesman for the Ministry of Health said the department is currently developing plans to work with the health-care sector to educate doctors on appropriate prescribing methods as part of its narcotics strategy. There is no timeline for the launch of the education program.

Health ministry sets up taskforce to address issues of pharma industry

The Union health ministry has constituted a taskforce to address issues faced by the pharmaceutical industry and evolve a long-term strategy for the sector. Prevention of takeover of domestic pharma companies by MNCs is one of the areas that the taskforce will look at.

The quantum of foreign direct of investment (FDI), the route through which it can come into the pharma industry and takeover of domestic firms by MNC giants have been among the burning issues in the recent past for the sector.

The 12-member taskforce will have members drawn from the National Pharmaceutical Pricing Authority, Department of Industry Policy and Promotion, Drugs Controller General of India and pharma industry associations. Secretary of health research, V M Katoch, will chair the committee.The taskforce has to submit its report to the government within three months.

Health Minister Ghulam Nabi Azad had recently met with drug manufacturers in Mumbai and Hyderabad, where pharma industry leaders had requested for a taskforce to prepare a long-term strategy for strengthening the drug sector in the country.

Apart from issues like clinical research, medical devices and R&D in the sector, FDI in the pharma industry has been an area of debate in the recent past. Acquisition of Indian pharmaceutical companies by multinationals could orient them away from the Indian market, thus reducing the domestic availability of drugs produced by them—this was among the many concerns raised by the Ministry of Health and Family Welfare that made the commerce ministry seek a review of the FDI policy in the pharmaceutical sector.

The health ministry advocated doing away with the automatic 100 per cent FDI approval route for the pharmaceutical industry. Foreign investment should be allowed in the pharma sector through the FIPB (Foreign Investment Promotion Board) route, it argued.

The terms of reference of the taskforce would be to evolve a policy, that would look at short, medium and long-term requirements of the pharma sector and to make India a hub for drug discovery, research and development. Also, the committee would evolve strategies to further the interests of Indian pharma industry in the light of issues related to Intellectual Property Rights and recommend strategies to capitalise the opportunity of drugs going off-patent over the next 5 years, a health ministry statement said.

The taskforce has also been mandated to evolve policy measures to assure national drugs security — promoting indigenous production of bulk drugs, preventing take over of Indian pharma industry by MNCs, drug pricing, promotion of generic drugs and recommend measures to assure adequate availability of quality generic drugs at affordable prices.

Measures to tackle the problem of spurious drugs will also be a focus area of the taskforce.

The cases of takeover of Indian pharma companies by MNCs, include Matrix Lab being bought by US-based Mylan Inc; Dabur Pharma by Singapore’s Fresenius; Ranbaxy Laboratories by Japan’s Daiichi Sankyo; Shanta Biotech by France’s Sanofi Aventis; Orchid Chemicals by US-based Hospira; and Piramal Health Care by US-based Abbot Laboratories.

The argument put forward by the ministry is that if Indian pharma giants were taken over by MNCs, they might lose interest in applying for a compulsory licence even if they were eligible, and that might threaten the regime of cheap and effective drugs in the country. Also, in the case of a public emergency, capable drug manufacturers may not be available to come forward to apply for compulsory licence and work at a reasonable cost. It said Indian pharma companies taken over by MNCs had been receiving state grants and tax concessions.

Symantec Announces January 2011 MessageLabs Intelligence Report

MOUNTAIN VIEW, CA — (Marketwire) — 01/25/11 — Symantec Corp. (NASDAQ: SYMC) today announced the publication of its January 2011 MessageLabs Intelligence Report. Analysis reveals that following a two-week dramatic decline in spam levels, spam now accounts for 78.6 percent of all email traffic, the lowest rate since March 2009, when the global spam rate was 75.7 percent of all email traffic. The volume of spam in circulation in January 2011 was 65.9% lower than for the same period one year ago in January 2010, when the spam rate was 83.9% of all email traffic.

The recent decline, beginning December 25 and continuing through January 1, was the result of both a halt in the spam-sending activities of three botnets — Rustock, Lethic and Xarvester — and also unrest among pharmaceutical spam-sending gangs. During this two week period, spam volumes declined 58 percent from 80.2 billion spam emails per day to 33.5 billion spam emails each day, reminiscent of declines experienced when California-based ISP McColo was taken offline in late 2008 and continuing into early 2009.

“The closure of spam affiliate, Spamit, was partially responsible for the disruption to spam output,” said MessageLabs Intelligence Senior Analyst, Paul Wood, Symantec.cloud. “However, there are likely other factors at work, such as consolidation and restructuring of pharmaceutical spam operations which has led to instability in the market likely to be exploited as a business opportunity by other spam gangs. We expect to see more pharmaceutical spam in 2011 as new pharmaceutical spam brands emerge and botnets compete for their business.”

In May 2010, pharmaceutical spam experienced peak levels when up to 85% of spam was related to pharmaceutical products. However, in January 2011, MessageLabs Intelligence found that pharmaceutical spam accounted for about 59.1% of all spam.

Since the end of 2010, MessageLabs Intelligence has witnessed shifting patterns related to pharmaceutical spam-sending. Previously, the Canadian Pharmacy brand was the most prolific of the pharmaceutical spam brands however, when Spamit shut down in October 2010, the brand disappeared as affiliates switched to sending spam for other brands.

It is no secret the major role that botnets play in spamming and in 2010, spam-sending botnets were responsible for as much as 88 percent of the world’s spam falling to 77 percent by the end of the year. Previously, Rustock had been responsible for 47.5 percent of all spam, approximately 44.1 billion spam emails each day, making it the single, largest spam-sending botnet. Both Lethic and Xarvester accounted for less than 0.5 percent of all spam each.

“At various points during Rustock’s history, the botnet has often exhibited irregular spamming patterns by sending huge volumes of spam before going quiet for several weeks at a time,” Wood said. “But throughout 2010, its spamming pattern was more regular and it had been active non-stop until December 2010. Our investigation revealed no evidence of Rustock being disrupted in any way either by law enforcement or through other action.”

Since January 10, all three botnets have resumed their spam-sending operations but not at their previous levels. Since its return, Rustock, previously the single largest spam-sending botnet, is now responsible for 17.5 percent of all spam in January. The Bagle botnet has now replaced Rustock as the largest spam-sending botnet with output at 20 percent of all spam, but Rustock maintains its position as the largest sender of pharmaceutical spam with 80 percent of its output in January related to pharmaceuticals.

During the two weeks that Rustock was dormant, it was being used for click-fraud to generate fake referrals for click-through expenses.

Other report highlights:

Spam: In January 2011, the global ratio of spam in email traffic from new and previously unknown bad sources was 78.6 percent (1 in 1.3 emails), a decrease of 3.1 percentage points since December.

Viruses: The global ratio of email-borne viruses in email traffic from new and previously unknown bad sources was one in 364.8 emails (0.274 percent) in January, a decrease of .03 percentage points since December. In January, 65.1 percent of email-borne malware contained links to malicious websites, a decrease of 2.5 percentage points since December.

Endpoint Threats: Threats against endpoint devices such as laptops, PCs and servers may penetrate an organization in a number of ways, including drive-by attacks from compromised websites, Trojan horses and worms that spread by copying themselves to removable drives. Analysis of the most frequently blocked malware for the last month revealed that the Sality.AE virus was the most prevalent. Sality.AE spreads by infecting executable files and attempts to download potentially malicious files from the Internet.

Phishing: In January, phishing activity was 1 in 409.7 emails (0.244 percent), an increase of 0.004 percentage points since December.

Web security: Analysis of web security activity shows that 44.1 percent of malicious domains blocked were new in January, an increase of 7.9 percentage points since December. Additionally, 21.8 percent of all web-based malware blocked was new in January, a decrease of 3.1 percentage points since last month. MessageLabs Intelligence also identified an average of 2,751 new websites per day harboring malware and other potentially unwanted programs such as spyware and adware, a decrease of 21.5 percent since December.

Geographical Trends:
Oman became the most spammed in October with a spam rate of 88.8 percent.
In the US, 78.8 percent of email was spam and 78.3 percent in Canada. Spam levels in the UK were 78.7 percent.
In The Netherlands, spam accounted for 79.4 percent of email traffic, while spam levels reached 77.8 percent in Germany, 79.8 percent in Denmark and 77.3 percent in Australia.
Spam levels in Hong Kong reached 79.2 percent and 77.2 percent in Singapore. Spam levels in Japan were at 75.2 percent and 84.6 percent in China. In South Africa, spam accounted for 80.0 percent of email traffic.
South Africa remained the most targeted by email-borne malware with 1 in 132.2 emails blocked as malicious in January.
In the UK, 1 in 178.2 emails contained malware. In the US virus levels were 1 in 771.0 and 1 in 212.3 for Canada. In Germany, virus levels reached 1 in 501.1, 1 in 1,215.0 in Denmark, 1 in 858.7 for The Netherlands.
In Australia, 1 in 667.4 emails were malicious and, 1 in 549.9 for Hong Kong, for Japan it was 1 in 1,233.0 compared with 1 in 733.3 for Singapore and 1 in 644.6 for China.

Vertical Trends:
In January, the most spammed industry sector with a spam rate of 82.8 percent continued to be the Automotive sector.
Spam levels for the Education sector were 80.6 percent, 79.1 percent for the Chemical & Pharmaceutical sector, 78.8 percent for IT Services, 77.9 percent for Retail, 77.2 percent for Public Sector and 77.4 percent for Finance.
In January, Government/Public Sector remained the most targeted industry for malware with 1 in 40.9 emails being blocked as malicious.
Virus levels for the Chemical & Pharmaceutical sector were 1 in 439.0, 1 in 497.8 for the IT Services sector, 1 in 714.9 for Retail, 1 in 194.3 for Education and 1 in 676.4 for Finance.

Local drug makers depend too much on imported ingredients

Despite concerted efforts to produce various types of medicines, Vietnam’s pharmaceutical firms still struggle to overtake foreign competitors due to their strong dependence on imported ingredients.

“We are focusing solely on making common medicines, while overlooking producing materials. We have to import around 700 tons of vitamin C every year as none of local drug maker makes it. We also have to buy cancer treatment drugs at high prices from abroad,” said Phung Ha, head of the Chemical Department under the Ministry of Industry and Trade.

Vietnam’s pharmaceutical industry is growing at a slow pace since 90 percent of pharmaceutical materials in the country were bought from abroad, according to the World Health Organization. Most of them are vitamins and antibiotics, which mostly come from two main countries including China and India.

Depending too much on imported materials made local drug makers pay off, Ha said, adding that many enterprises have incurred losses from the stronger dollar.

While local makers can only produce common medicines, foreign pharmaceutical enterprises offer wide ranges of drugs, which are distributing to pharmacies nationwide.

With strong financial funds, they also captured lot of market shares by offering big commissions to hospitals and distributors and carrying out many marketing packs.

Analysts estimate foreign giants including Zuellig Pharma, Mega Product and Diethelm make an annual revenue of up to VND1 trillion (US$50 million) in Vietnam.

“Most local pharmaceutical firms achieved the GMP [Good Manufacturing Practice] standard. However, their techniques remain low and their products are identical,” said Dr. Nguyen Hai Nam, head of the Pharmaceutical Chemistry Faculty of the Hanoi University of Pharmacy.

“For example, most drug makers produce generic drugs, which have low values. They make 69 percent out of the total amount of drugs on the market”.

Statistics from the Department of Pharmaceutical Management, under the Ministry of Health, show there are 260 different brand names for the same pain-relief medicine, 223 for the same vitamin.

Cao Minh Quang, deputy minister of health, said “researching advanced pharmaceutical technologies requires large investment funds and takes long time.”

“Therefore, the government should strongly finance local drug makers, as well as offer tax exemptions”.

There are around 178 pharmaceutical enterprises in Vietnam, and 50 percent of them gained the GMP standard.

With the population of around 86 million, the Southeast country is a potential market for both domestic and foreign drug makers.

Many international pharmaceutical giants have entered the country, including French drug maker Sanofi-Aventis, Britain’s GlaxoSmithKline, France’s second-largest drug maker Servier, the US’s Pfizer and Switzerland’s Novatis Group.

Vietnam’s pharmacy industry will continue to make an average growth rate of 25 percent per year, making revenue of nearly $2 billion and $6.1 billion in 2013 and 2019 respectively, according to the British healthcare company BMI.

Five questions: Pharmacy specialist touts benefits of competition

With his highly technical mind, Ken Schafermeyer is among the local health care experts who seem to grasp the fluid dynamics of the pharmaceutical industry, from patented research to mail order.

Steeped in the world of prescription medicines, he seems to revel in discussing the latest permutations of rebates, discounts, community pharmacies and pharmacy benefits managers. He also has a yen for public policy, eager to size up the strengths and inequities of U.S. health care.

Schafermeyer is a professor of pharmacy administration at St. Louis College of Pharmacy, where he has worked since 1990. He’s also director of the college’s Division of Liberal Arts and Administrative Sciences. He worked previously as a state pharmacy association executive and lobbyist, and also as a consultant for several managed care and Medicaid agencies in Missouri and Indiana.

A licensed pharmacist in Missouri, he earned his bachelor of science degree in pharmacy from the St. Louis College of Pharmacy, a master of science degree in pharmacy administration from the University of Tennessee, and a Ph.D. in pharmacy administration from Purdue University.

He has authored and co-authored 27 books and manuals, written chapters in eight textbooks, as well as articles on various areas of health economics, managed care coverage of pharmaceuticals, and financial management.

Taking a break from his teaching and research, Schafermeyer sat with the Post-Dispatch last week for an interview on topics ranging from pharmacy costs for the average consumer, to the pricing of drugs for the elderly and the poor. What follows is an edited transcript:

Is the health care reform law making prescription medicines any more affordable for the average American?

The average American probably won’t see much change at all, because they already have health insurance. Their health insurance plan is already trying to do what it can to control drug costs, so most people won’t be affected.

The people who will be affected the most will be people with pre-existing conditions who can’t get health insurance. And it will effect those 32 million people who don’t have health insurance now who are expected to obtain health insurance as of 2014. For those people, the cost of prescription drugs is going to go way down because insurance will cover it. At least it will increase access.

People will have opportunities to get affordable health care without going to the emergency room and probably will seek earlier diagnosis and treatment — and that in itself would help reduce costs.

Even with more consumers using generic drugs rather than brand-name drugs, the cost of prescription medicines in the U.S. seems sky high. What can be done to lower or cap the cost of medicines?

About 58 percent of all the prescriptions now are dispensed for generic products. The 42 percent of prescriptions for brand names represent 80 percent of costs. So it’s really disproportionate.

The average brand name prescription is in the range of $140 to $160, and generics are a small fraction of that. A lot of big brand-name drugs are ready to go generically, and everyone predicts year after year that that’s going to save money. What they don’t anticipate is that there are going to be new brand-name products on the market that physicians are going to want to write prescriptions for, and while there are savings in some places, there are new costs of expensive brand name products elsewhere.

So what can the consumer do? They can ask their pharmacist or their physician if a generic is available, and whether a generic could be dispensed. Most physicians really don’t know the cost of these products.

How successful is the federal secretary of Health and Human Services in negotiating good prices for Medicare drugs?

I’d say totally ineffective.

(The 1990 Medicare law) required manufacturers to give rebates, because government saw that hospitals and PBMs (pharmacy benefit managers) and other groups were getting rebates, and they wanted them, too. They claim they are saving all this money, but there’s nothing saying what the original price was.

So look, if my price is $100, and you demand a 15 percent rebate, why don’t I increase the price to $115 or $125? So we all act like we’re saving money by getting rebates, but I think people in the industry know there’s no savings there because a company can charge more money if they want and they can give a discount off of whatever they charge.

So the biggest purchasers of pharmaceuticals (Medicare and Medicaid) aren’t necessarily getting a break on price. But with Medicare D, when that was passed (in 2005), there was a specific provision that said the federal government would not negotiate prices. That was a concession to the pharmaceutical industry.

We’re the only industrialized nation in the world that doesn’t negotiate drug prices with manufacturers.

Are the states any more successful in negotiating good drug prices for Medicaid programs for the poor?

What they can do is give incentives to dispense lower cost products, and they do that by requiring the use of generics when possible.

There are certain things they can’t control, (such as) the reimbursement for brand-name drugs if the drugs are covered. They’re not very effective at controlling the price. They pretty much have to reimburse based on the cost.

And they can certainly create incentives to dispense generics. They can give incentives to find therapeutic alternatives to an expensive product.

But at the end of the day, there’s a limit to how much they can do. And so they’re not all that effective at reducing costs for the high cost branded products.

Should independent family owned pharmacies receive any special protection from the government against large retail pharmacy chains and mail order pharmacies?

No, I don’t think they should have special protection. I think they should have a level playing field. I think they should be able to compete in an open market.

So if there’s a mail order situation, a pharmacy shouldn’t be put at a disadvantage where they can’t meet the same terms as a mail order plan. So if a mail order plan can dispense a 90-day supply, why couldn’t a community pharmacy dispense a 90-day supply? If the co-payment is different for mail-order versus a community pharmacy, why? Why shouldn’t it be the same?

Let a patient decide if mail order is better for them or a community pharmacy is better for them. Don’t put them at an economic disadvantage and force them to do something they may not want to do…

Competition is a good thing. Let it happen.

CVS: Use of Generics Kept Costs Down in 2010

CVS Caremark Corp. said an increasing use of generic drugs by its customers helped keep costs in check last year as the industry copes with pricing pressures and sweeping changes in U.S. health-care policy.

In an annual review of drug and pharmacy trends, the pharmacy-benefits manager and second-largest pharmacy chain in the U.S. said complex specialty pharmaceuticals remained the fastest growth area, up 14% year-to-year, while the use of prescription drugs also was up overall, CVS Caremark expects the trends to continue this year.

“Last year was one of uncertainty and change for our clients as they worked to understand the impact of health-care reform while also dealing with a sluggish economic recovery,” said Per Lofberg, president of CVS Caremark’s pharmacy-benefit management business.

The company’s generics-dispensing rate reached 71.5% in 2010 as more products became available and were more widely accepted for use by physicians and consumers.

About a quarter of CVS Caremark clients’ medication costs fell from a year earlier, the company said.

The company in February reported that its fourth-quarter earnings fell 2.2% on weaker results at its pharmacy-benefits business. The industry has been under pressure amid reduced consumer spending and as Americans have been using fewer health-care services.

PBL’s adventure could have big consequences

OPINION: Pharmacybrands (PBL) is small and easy to miss among stock market giants such as Fletcher Building and Telecom.

The casual observer probably wouldn’t know, but the $45 million-valued PBL now controls about a third of the retail pharmacy industry.

In 2005, PBL was Life Pharmacy. The impetus behind its establishment was a 2003 law change allowing non-pharmacists to own up to 49 per cent of a pharmacy, up from 25 per cent previously. Additionally, pharmacists could now own up to five pharmacies rather than just one.

The path has not been smooth. Life Pharmacy lost $6.6m in 2007 and a further $570,000 in 2008 before achieving a profit of just $61,000 in 2009. But it doggedly pursued the idea of industry consolidation. After a merger with unlisted Pharmacybrands in 2009, Life Pharmacy changed its name to PBL. This month another unlisted company, Radius Pharmacy Group, was acquired.

According to industry figures there are about 900 pharmacies in New Zealand. PBL operates more than 300 franchised stores under the Life Pharmacy, Unichem, Amcal, Care Chemist and Radius brands. It has ownership stakes (mostly of about 49 per cent) in 68 of those stores. The 68 stores collectively have $200m of annual turnover.

For the half-year to September, PBL reported after-tax profits of $2.2m, up from $1.35m for the same period in 2009. The company was cashed-up, with $40.3m of shareholders’ funds against just $45.6m of total assets.

The Radius purchase has changed that. Radius cost $17m to buy, but PBL is also taking on $18m of its debt. To fund the acquisition PBL is using $12m of cash reserves and $23m of bank financing, meaning its debt will rise to $24.5m, though it will still have a debt-to-equity ratio of just 1-to-2.

Its profitability is therefore difficult to gauge. Figures for the March 31, 2010 year supplied by PBL for the Radius acquisition give combined after-tax earnings for the two companies of $7.5m. However, the figures don’t incorporate the extra debt PBL is taking on for the Radius purchase.

Like any retail operation, pharmacies have been doing it tough. Health and beauty product sales are under pressure from other retailers and online competition, while policy changes under the last government saw dispensing fees dropped.

Grouping pharmacies in franchises gives them greater buying and distribution power, so bringing down costs. But for a few years, your columnist did wonder if the overall levels of profitability for PBL would ever match the effort in bringing it all together.

However, something interesting has happened. Big hitters have climbed on board PBL.

First up in 2007 was Andrew Bagnall, a 64-year-old motor sport and franchise enthusiast. He created Gullivers Travel Group back in 1976 and carried away well north of $100m from its sale in the mid-2000s. He has, by Chalkie’s reckoning, pumped about $13m into buying 26.7 per cent of PBL.

Then there was the Zuellig Group. This US$12 billion (NZ$15.3b) turnover, privately- controlled Asian conglomerate owns the C B Norwood Distributors agricultural equipment firm and has had longstanding investments in New Zealand’s healthcare supplies industry. Peter Merton was a senior manager for the company in New Zealand, ending up in a joint venture with Zuellig.

In 2007, Mr Merton and Zuellig sold their wholesale pharmaceutical and medical supplies businesses to Ebos Group for $72m in cash and $14m in Ebos shares, but retained a 67 per cent interest in the then unlisted Pharmacybrands.

When that merged with Life Pharmacy in 2009 they became 26.71 per cent shareholders in the merged PBL entity. Mr Merton is now chairman.

Mr Bagnall, Mr Merton and Zuellig have fabulous investment pedigrees and very deep pockets. They must see much more to PBL than has been shown so far.

The company provides a hint of its true ambitions with a brief reference in the background documentation for the Radius acquisition, sent to shareholders last month. It appears that pharmacy consolidation is merely an entry point for investment in primary health services.

PBL is considering buying into eight medical practices. It would buy one outright and take stakes of between 10 per cent and 50 per cent in seven others. In addition it may buy another company that provides management services to those eight medical practices as well as to another 11 independent practices. No decision has been made on these acquisitions, but Chalkie is prepared to bet they go ahead.

So, PBL’s interest goes far beyond pharmacies. It appears interested in extending franchising right through primary healthcare – creating the one-stop shop and the obvious operational and cash efficiencies this could bring. There would appear no limit to how far this corporatisation of health services might go, if PBL can find the money.

The company is already suggesting it may raise more capital later this year to fund further expansion. And if you look at the major backers’ resources there is plenty of petrol left in the tank.

SURVEYING the wider picture, public health spending, at $12.7b, made up over 15 per cent of total government/ taxpayer expenditure last year. The Government is looking for ways of getting more bang for our buck. Health Minister Tony Ryall has spoken of how demand for health services is expected to double in the next 10 years and how much of this demand needs to be met on a “lower cost platform” out in the community and closer to home.

Pharmacies and GPs are well placed to take up more frontline health duties. Pharmacies, for example, can take responsibility for the monitoring of issue of certain drugs to patients or the keeping of detailed health records.

Government policy will therefore be important for PBL and the strategy its main backers are quietly unfolding.

If primary healthcare providers do indeed receive a greater share of both funding and responsibilities, then the PBL strategy has a fair chance of bearing fruit over time.

And how far might this strategy extend? It is interesting to look at some of the people involved in private sector health services and the associations they have. Mr Merton is a director of healthcare supplies group Ebos. He owns 2 per cent of that company, while Zuellig has 3 per cent. The largest shareholder in Ebos is South Island investor Mark Stewart, with 10 per cent. Mr Stewart also owns nearly 20 per cent of Wakefield Health, the operator of two private hospitals in Wellington and one in Hawke’s Bay. Ebos director Liz Coutts chaired PBL when it was still known as Life Pharmacy. Ebos chairman Rick Christie is also on the Wakefield board. Given these associations, it is not hard to imagine some sort of either informal or official linkage in future between Ebos, Wakefield and PBL. A tie-up would take in all areas of health, from medical supplies wholesaling, to retailing, to GP care and to hospital care. That would be some sort of one- stop shop. Because so much depends on future government policy, the investment being made by the principals in PBL is still somewhat speculative. But the rewards are potentially rich if those backing PBL have correctly anticipated future health policies and direction.

There is no doubt PBL is on an adventurous journey. Where the journey leads is still open. But given the track records of the people in its driving seat, PBL’s little adventure could have big consequences for the healthcare industry.

Don’t swallow this pill

Are the European Union and its multinational pharmaceutical companies now pressuring the Indian prime minister’s office? In recent months, as negotiators from India and Europe have been thrashing out the details of a free trade agreement to be signed within months, people living with HIV have been hitting the streets. From New Delhi to Nairobi and Brussels to Bangkok, they have been protesting against the very real threat posed to India’s ability to supply life-saving generic medicines to people across the developing world.

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Publicly, both sides have assured that the trade deal will not harm access to the affordable generic medicines, and have reiterated, as if by rote, the primacy of people’s health over economic interests. But the Indian press now reports that the PMO, under pressure to conclude the deal, has asked the concerned government department to reconsider intellectual property (IP) provisions it had earlier rejected.

What is at stake? India became the ‘pharmacy of the developing world’ because its generic manufacturers are able to produce medicines that are patented elsewhere. This has made it a safe haven for affordable medicines. Medecins Sans Frontieres now purchases more than 80% of the medicines it uses to treat 1,60,000 people living with HIV/AIDS around the world from producers in India. But this safe haven has been under constant attack.

Six years ago, the first attack came when India was obliged under international trade rules to introduce patents on medicines. Already, patents have been granted on cancer, AIDS and hepatitis medicines. But crucially, India’s parliamentarians sought to balance patents with public health, and designed a strict patent law that would stand up to trade rules and protect access to affordable generic medicines.

One core provision of the law stops pharmaceutical companies from abusing the patents system. Section 3d says no patent shall be granted for a minor change to an existing medicine, if it shows no significant therapeutic efficacy over one which already exists. This prevents “evergreening”, when companies seek monopolies to block out generic competition for as long as possible, simply by making minor changes to a drug.

This has irked multinational pharmaceutical companies, which launched a second attack on the pharmacy of the developing world. As patent applications for several big-ticket drugs – oseltamivir for avian and swine flu, imatinib for leukaemia and, very recently, lopinavir/ritonavir and atazanavir for AIDS – failed to pass the patentability test in India, companies sought to overturn the law, or empty it of any substance. Novartis notoriously took the government of India to court in 2006, but lost. Other companies like Bayer have taken a stab, but have yet to succeed.

Enter the free trade agreement negotiations, as the European trade agenda becomes the latest mouthpiece for the multinational pharmaceutical companies. Until now, much of the debate on generic production in India has focussed on patents. Now, the EU has changed track and is pushing hard for India to sign up to another means of blocking off generic production: data exclusivity.

With data exclusivity, India would be agreeing to grant a period of exclusivity over the clinical trial data submitted by a pharmaceutical company. This in turn would prevent the Drugs Controller General of India – the body responsible for approving medicines for market – from registering a generic medicine until that time was over. The multinational pharmaceutical industry has asked for that time to be 10 years.

Data exclusivity is a backdoor to monopoly protection. It also sweeps away the attempts by India’s parliamentarians to balance health and profits. It makes a mockery of India’s patent offices’ work to apply rigorous standards and ensure only innovative medicines are granted a monopoly. Now, a pharmaceutical company would merely have to submit clinical trial data to obtain several years of monopoly, whether the drug was patented or not, whether it was old or new, whether it showed inventive step or not, or gave added therapeutic benefits or not.

The effect on access to affordable medicines is clear. India can learn from the countries that have preceded it down this path. Jordan brought in data exclusivity as part of a trade deal with the US. A study by Oxfam found that of 103 medicines registered and launched since 2001 that had no patent protection in Jordan, at least 79% had no competition from a generic equivalent as a consequence of data exclusivity. The study also found that prices of these medicines under data exclusivity were up to 800% higher than in neighbouring Egypt.

India should not repeat others’ mistakes, or the effect would be felt far beyond India’s borders. The country is the source of the vast majority of drugs used to treat AIDS in developing countries. Affordable medicines produced in India have played a major part in reaching the more than five million people receiving HIV/AIDS treatment across the developing world today.

In 2000, treating one HIV positive person for a year cost more than Rs 4,00,000. Thanks to competition among generics from India, this same treatment today costs Rs 3,000. Any measure in the free trade agreement that would have the effect of blocking competition would effectively be turning the clock back on access to medicines. India needs to stand strong and resist European demands.

Government lets fraudulent drug companies deal with Medicare

Seven years ago, Lee Chartock, a psychiatrist in South Weymouth, Mass., got a visit from a drug saleswoman offering to pay his expenses to an “advisory meeting” in Boca Raton, Fla.

There, hucksters encouraged him and other attendees to prescribe the drug Zonegran, approved by the Food and Drug Administration (FDA) as one of several medications to treat epilepsy seizures in adults. That small market wasn’t growing. But physicians had been paid up to $1,250 to attend Florida sessions where they were encouraged to increase the drugs’ sales by prescribing it “off-label” as a diet pill, to treat mood disorders, and for epilepsy in children.

Back in Massachusetts, the saleswoman offered to pay him to give speeches on behalf of the drug’s maker, an Irish firm with R&D and other operations headquartered in South San Francisco called the Elan Corporation.

Chartock declined. Instead he filed a federal whistle-blower complaint describing an illegal marketing scheme by Elan to market Zonegran for “off-label” uses.

On Dec. 15, the Justice Department announced that Elan would pay criminal and civil penalties totaling more than $200 million. As part of a legal settlement, Elan signed a so-called corporate integrity agreement, designed to ensure it doesn’t repeat this kind of practice. For the next five years, it will employ a “compliance committee” and regularly report back to the government on whether employees are breaking the law.

U.S. Attorney General Eric Holder said in a Dec. 16 speech that the cash settlement and the agreement were examples of how the Obama administration is “fighting back in bold, innovative ways” against health care fraud.

“Ironic” might be a word more apt than innovative. That’s because, when it comes to pharmaceutical companies, the federal government’s antifraud strategy has itself smacked of flimflam.

Elan is one of hundreds of entities under corporate integrity agreements requiring them to audit their own behavior under the supervision of the U.S. Department of Health and Human Services. Such negotiated deals have quietly become America’s preferred method of battling criminal activity in Big Pharma, the largest source of documented fraud against the U.S. government.

But even the feds’ top cop in charge of investigating Medicare fraud points out these agreements can be shams. “Sometimes you can dance around corporate integrity agreements and still be in compliance,” said Timothy Menke, deputy inspector general for investigations with the U.S. Department of Health and Human Services, during congressional testimony in March.

Peter Rost, a former Pfizer marketing vice president who blew the whistle on drug marketing fraud, takes Menke’s criticisms a step further. “In my opinion, this whole thing is a bit of a circus for the consumption of the masses,” he says. “The Department of Justice can say we’ve extracted hundreds of millions of dollars in fines. But it’s a game, and the reason it’s a game is that it really doesn’t change anything.”

As if to confirm Rost’s point, Elan’s official statements seem to suggest the company got caught up in a minor legal quibble and emerged with hardly a scratch. “We are pleased to have reached this agreement, which concludes a longstanding legal matter on a product Elan divested over six years ago,” counsel John Moriarty said. “Elan is committed to adhering to the highest ethical and legal standards.”

Management of health care is one of America’s greatest concerns. In California, new Gov. Jerry Brown’s austere 2011-2012 budget included more than $41 billion to fund Medi-Cal payments for disabled and elderly residents. The federal HHS budget, which includes Medicare and Medicaid health insurance programs for the elderly and poor, is $880 billion.

Medicare fraud, meanwhile, is estimated to take up $60 billion per year of these funds. Much of that problem can be traced to Big Pharma, which can sometimes earn a quarter of its income selling medicine paid for by the government.

Drug company reps can boost sales radically by bribing doctors to prescribe medicines for conditions for which the FDA has not approved them. Laws prohibit off-label marketing to prevent snake-oil salesmen from poisoning the public. For example, the FDA specifically did not approve Zonegran for use in children because of severe potential side effects of heat exhaustion and dehydration. Nonetheless, according to a federal indictment, one sales rep went so far as to instruct physicians to administer the drug to a child by emptying a capsule into applesauce.

According to Chartock’s complaint, between 2001 and 2003 Zonegran’s sales increased 87 percent to more than $80 million “due in large part to” bribes and off-label marketing.

Medicare rules banish companies convicted of felony fraud. But that rarely happens, even in cases of multibillion-dollar fraud.

The reason is simple: Like Bear Stearns and AIG, pharmaceutical giants seem too big to fail. Felony convictions would require banning big drug companies that defraud the government. That would make certain types of medicine unavailable to Medicare patients. And given pharmaceutical companies’ reliance on Medicare sales, banishment would drive companies out of business, eliminating thousands of jobs.

So instead of pursuing felony cases, companies get fines and wrist-slaps in the form of corporate integrity agreements. There’s no drug industry equivalent to Martha Stewart, a famous cheating executive who was jailed as a warning to others.

Clinical practice guidelines as marketing tools

Creating clinical practice guidelines can be a long and expensive process, and guideline writers are always in search of funding. Enter the pharmaceutical industry. Of course, whenever drug companies foot the bill for any type of medical research, the question invariably arises: Will the money bias the outcome?

It is well known that the results of clinical trials tend to favour the bodies that fund them. But less scrutiny has been applied to the recommendations made in industry-funded clinical guidelines, which are used extensively by clinicians and therefore have a direct impact on patient care.

It would be naive to think that clinical guidelines recommending drugs manufactured by the companies that sponsor the guidelines are any less free of bias than clinical trials, says Dr. Alan Detsky, a professor in the health policy, management and evaluation department at the University of Toronto in Ontario.

If the guidelines are funded by government or private donors, a bias toward recommending particular pharmaceuticals may not be present. The opposite is likely true, however, if the guidelines were created by a medical society dedicated to combating a particular disease, says Detsky.

“These societies get up to 50% or more of their funding from pharmaceutical companies,” says Detsky. “Who do you think is driving the agenda? These guidelines are little more than marketing tools.”

Most published guidelines list the bodies that fund them. For example, the Canadian Thoracic Society’s 2010 guidelines on asthma management for adults and children ages six and above (Can Respir J 2010;17:15-24) received “unrestricted grants to facilitate knowledge translation” from AstraZeneca Canada, GlaxoSmithKline Inc. Canada, Merck Frosst Canada and Novartis Pharmaceuticals Canada Inc.. The Canadian Diabetes Association’s 2008 clinical practice guidelines for the prevention and management of diabetes lists 10 industry sponsors, including Bayer Inc., Eli Lilly Canada Inc. and Pfizer Canada Inc..

Whether or not guideline writers need to look to industry for funding may depend in part on the breadth of the guidelines. Some are modest in scope, such as guidelines for end-of-life care for people with heart failure. Others are much more ambitious, such as guidelines for all aspects of diabetes care.

“They can be very specific or very general,” says Dr. Valerie Palda, medical director of the Guidelines Advisory Committee (part of the Centre for Effective Practice, an Ontario-based independent organization), which for more than a decade has assessed the quality of clinical guidelines. “If there is an extensive process, it could take 18 months to three years.”

In general, the process consists of defining the primary clinical question the guidelines will address, surveying stakeholders (physicians, patients, policy makers) to identify priority areas, conducting an extensive systematic review of the scientific literature on the chosen topic (which can span many decades), rating and synthesizing the evidence, convening a panel of experts to discuss the evidence and make clinical recommendations, submitting the recommendations for review to independent experts, and finally, publishing the guidelines and creating knowledge translation tools to push the information out to clinicians.

Though members of a clinical guideline panel typically volunteer their time, there are other expenses. Library staff is often hired to conduct literature searches, or the searches may be farmed out to a business. There are travel costs — air fare, hotels, taxis, food — associated with bringing panel members together to discuss evidence and make recommendations. Creating knowledge translations tools, such as laminated reference guides, can also add up.

“Publishing isn’t the biggest cost. The big cost is the systematic review and the meetings of panel members,” Palda says, adding that using industry money to cover these costs is acceptable if safeguards against bias are in place. “It’s not so much that you can’t use industry sponsorship, but can we mitigate the effects of it?”

Indeed, taking measures to ensure clinical recommendations are based on evidence alone is a critical part of the process, says Dr. Alexandra Papaioannou, a professor in department of medicine (geriatrics division) at McMaster University in Hamilton, Ontario, and the lead author of the 2010 clinical practice guidelines for diagnosis and management of osteoporosis in Canad.

“We put additional safeguards in place to ensure our recommendations were evidence-based and impartial,” says Papaioannou. “We know that drugs have side effects and we wanted to make sure those at highest risk of fractures are being treated appropriately.”

The safeguards included establishing a framework for creating the guidelines, putting a clear clinical question in place and not veering from it, publishing the search strategy so that others could replicate it (to prevent the cherry-picking of evidence), submitting the clinical recommendations to independent experts from various disciplines for review, providing the guidelines to numerous health organizations for review and endorsement, and working with CMAJ, the journal that published the guidelines, to facilitate its review process.

The best safeguard against industry influence, of course, is to attain funding elsewhere, though that is easier said than done. Still, it is possible. Dr. Tamara Pringsheim, an assistant professor in the faculty of medicine (departments of clinical neurosciences and paediatrics) at the University of Calgary in Alberta, received funding from the Canadian Institutes of Health Research to write an as-yet unpublished guideline for monitoring the effectiveness and safety of antipsychotics use amongst children.

”When you have full funding, you will do the Cadillac version of the guidelines,” says Pringsheim. “Often, you don’t have that kind of funding behind you.”

The budget for Pringsheim’s guidelines allotted $16 000 for research assistants, $6000 to cover the travel costs of getting panel members to a meeting in Calgary (actual costs came closer to $10 000), $3000 for a facilitator for that meeting, $5000 to conduct focus groups with families, $5000 to purchase materials needed to use licenced symptom severity rating scales and $500 for communications. Pringsheim also plans to create knowledge translation tools — which may include aids for doctors, lectures, web seminars and a website — but does not yet have funding for them.

Pringsheim has also received a $15 000 private donation to begin work on a guideline for Tourette’s syndrome. A drug company offered an unrestricted grant for that guideline but Pringsheim and her collaborators turned it down, fearing it might influence their work.

“There will always be that worry,” says Pringsheim. “The last thing you want is for people to say your work is biased.”

New Oral Biologics Delivery Company, Entrega, Announces Strategic Partnership with Pharma

BOSTON, Jan. 10, 2011 /PRNewswire/ — Entrega, Inc., a new company developing oral drug delivery technologies, today announced its formation by Enlight Biosciences, a Boston-based company established in partnership with a group of leading global pharmaceutical companies. As part of its initial development program, Entrega will use its unique spatially-directed proprietary drug delivery platform to create orally bioavailable formulations of several of the biologic drugs of Enlight’s pharmaceutical industry partners, for which Entrega will receive undisclosed payments including upfront and research milestone payments. Entrega will remain independent and retain all rights to the platform technology.

“Entrega’s technology could have a major impact on medicine by enabling the oral delivery of drugs that would typically require injection,” said Dr. Robert Langer, David H. Koch Institute Professor at MIT, Entrega SAB Chair. “The relationship with pharma will support Entrega’s unique technology and strengthen the platform significantly.”

Biologic drugs (biologics), such as insulin and antibodies, represent over $120 Billion in annual revenues and address major medical needs in areas such as cancer and inflammatory disease. However, most biologics need to be delivered by injection, which leads to challenges in compliance and effectiveness. The ability to deliver biologics orally would address a significant unmet need for patients around the world. Entrega’s proprietary drug delivery technology offers an innovative approach to deliver a wide variety of peptides and proteins via oral administration.

Entrega, Inc. was formed by Enlight Biosciences, a unique entrepreneurial collaboration to discover and develop platform technologies that will have a transformational impact on drug discovery and development. “Enlight’s innovative model, bringing together pharma companies and academic innovators, is addressing what has fundamentally been one of the foremost challenges in drug delivery,” said Dr. Bennett Shapiro, former EVP of Worldwide Research at Merck, and currently PureTech Ventures Senior Partner, and Enlight Board member. Enlight was founded by PureTech Ventures and a group of the world’s leading pharmaceutical companies.

About Entrega

Entrega, Inc.’s proprietary delivery technology provides a powerful platform for oral administration of proteins, peptides and difficult-to-deliver small molecules. Entrega (meaning “delivery” in Spanish) is led by a world-class group of scientific leaders including SAB Chair and Board member Dr. Robert Langer, the foremost leader in the field of drug delivery, one of only 14 Institute Professors at MIT, a member of the U. S. National Academy of Sciences, the U.S. National Academy of Engineering, and the U. S. Institute of Medicine. Dr. Langer has written over 1,100 scientific articles and has approximately 760 patents. Other founding Scientific and Business Advisors include Dr. Colin Gardner, former CSO of Transform Pharmaceuticals, SVP of Research and Site Head at Johnson & Johnson and formerly VP of Pharma R & D at Merck; Dr. Samir Mitragotri, Professor of Chemical Engineering at UC Santa Barbara; Dr. Rodney Pearlman, formerly CEO of Nuon Therapeutics, President & CEO of Saegis Pharmaceuticals, and Director of Pharmaceutical R&D at Genentech; and Mr. Howie Rosen, former President of ALZA. Entrega, Inc. was formed by Enlight Biosciences.

About Enlight

Enlight Biosciences is a unique entrepreneurial collaboration to discover and develop platform technologies that will have a transformational impact on drug discovery and development. Enlight is a Boston-based company established in partnership with a group of leading global pharmaceutical companies. Enlight has four active portfolio companies, most of which are moving forward on a confidential basis in partnership with Enlight’s pharma members. Enlight was founded by PureTech Ventures and a team of industry leaders and academic luminaries including Chairman Dr. H. Robert Horvitz of MIT, Nobel Laureate, an Investigator of the Howard Hughes Medical Institute and a member of the U.S. National Academy of Sciences, the U.S. Institute of Medicine, and a Fellow of the American Academy of Arts and Sciences. Other founding Scientific and Business Advisors include Dr. Sanjiv Sam Gambhir, the Virginia & D.K. Ludwig Professor of Radiology and Bioengineering at Stanford University, Head of Nuclear Medicine, Director of the Molecular Imaging Program at Stanford, Director of the Canary Center at Stanford for Cancer Early Detection, recipient of over 20 awards including the Hounsfield Medal and Tesla Medal, and a member of the U.S. Institute of Medicine; Dr. Rakesh Jain, the Andrew Werk Cook Professor of Tumor Biology in the Department of Radiation Oncology at Harvard Medical School and Director of the Edwin L. Steele Laboratory of Tumor Biology at Massachusetts General Hospital, recipient of more than 50 major awards and lectureships and a member of the US National Academy of Sciences, Institute of Medicine, the National Academy of Engineering and the American Academy of Arts and Sciences; and Dr. Raju Kucherlapati, Professor of Medicine and the Paul C. Cabot Professor of Genetics at Harvard Medical School and the first Scientific Director of the Harvard-Partners Center for Genetics and Genomics, a fellow of the American Association for the Advancement of Science, and a founding Board member of Abgenix, Cell Genesys, and Millennium Pharmaceuticals.