Monthly Archives: June 2011

Earnings reports: April 28, 2011

IMAX CORP.

Canadian big-screen movie company Imax Corp. posted a first-quarter loss, hurt mainly by lower box-office collections on a lack of blockbuster films.

The Toronto-based company posted a loss of $1 million, or 2 cents a share. It had posted a profit of $26.5 million, or 42 cents a share, a year ago on the back the release of Avatar.

Revenue in the quarter rose to $20.2 million from $11.6 million. Excluding one-time items, earnings fell to $2.5 million, or 4 cents a share, from $35.3 million, or 53 cents a share.

That compared to an average expectation among 16 analysts polled by Reuters for earnings of 11 cents a share on revenue of $50.5 million.

NORBORD INC.

Norbord Inc. posted a smaller first-quarter loss as the Canadian oriented strand board (OSB) producer gained from healthy business in Europe.

The wood-based panels producer, whose North American operations have been hit by weak housing activity in the United States, expects activity to pick up in the second half of this year.

OSBs are similar to plywood, but are cheaper and commonly used to sheath roofs, walls and floors.

January-March loss narrowed to $2 million, or 5 cents a share, from $7 million, or 16 cents a share a year ago. Revenue at Norbord, which also manufactures plywood and a range of other engineered wood products, rose 28 per cent to $253 million.

MICROSOFT CORP.

Microsoft Corp. reported a dip in quarterly sales of its core Windows operating system, mirroring a recent downturn in personal computers and sending its shares down slightly.

The world’s largest software company met Wall St. profit estimates, as strong sales of its Office suite of applications and game systems took up the slack.

Microsoft shares fell two per cent to $26.06 in after-hours trading following the earnings report.

Microsoft notched a 31-per-cent increase in fiscal third-quarter net profit, reporting net profit of $5.2 billion, or 61 cents per share, compared with $4 billion, or 45 cents per share, in the year-ago quarter. Five cents per share of that profit was attributed to a one-time tax benefit.

Excluding the tax benefit, profit met the 56 cents expected by Wall St. analysts, according to Thomson Reuters. Despite the dip in the Windows unit, overall sales rose 13 per cent to $16.4 billion, ahead of the $16.2 billion expected by analysts, helped by sales of Office and its Xbox game system.

RESEARCH IN MOTION

Research In Motion cuts its earnings outlook for the quarter on Thursday, saying it expects to ship fewer BlackBerry smartphones but maintained its robust full-year guidance.

RIM said it expects diluted earnings of between $1.30 and $1.37 a share for the period to the end of May, down from the $1.47-$1.55 range it forecast in late March.

“This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecast in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices,” the company said in a statement.

EXXON MOBIL CORP.

Exxon Mobil Corp.’s quarterly profit rose a better-than-expected 69 per cent as the world’s largest publicly traded oil company benefited from higher crude prices and better margins for its refineries.

The Irving, Tex., company reported a first-quarter profit of $10.65 billion, or $2.14 per share, up from $6.3 billion, or $1.33 per share, a year earlier.

Analysts on average had expected Exxon to report a first-quarter profit of $2.07 per share, according to Thomson Reuters. Revenue rose 26 per cent to $114 billion.

Oil and gas output rose 10 per cent to 4.82 million barrels oil equivalent per day.

TIME WARNER CABLE INC.

Time Warner Cable Inc. reported on Thursday stronger quarterly profit and revenue, helped by higher advertising sales and an increase in subscribers to its voice and high-speed Internet services.

Time Warner Cable said first-quarter income rose to $325 million, or 93 cents a share, from $214 million, or 60 cents a share, in the year-ago period.

Revenue increased five per cent to $4.8 billion, fueled by higher residential, commercial and advertising sales, it said.

IMPERIAL OIL LTD.

Imperial Oil Ltd.’s first-quarter profit rose 64 per cent on higher oil sands production and rich refining margins, Canada’s second-largest oil producer and refiner said on Thursday.

Imperial, the Canadian affiliate of Exxon Mobil Corp., earned $781 million ($822 million), or 91 cents a share, up from a year-earlier $476 million, or 56 cents a share.

It had been expected to earn 96 cents a share, the average estimate among analysts surveyed by Thomson Reuters.

Revenues rose 11 per cent to $6.9 billion from $6.2 billion in the first quarter of 2010.

JEAN COUTU GROUP INC.

Longueuil-based pharmacy chain Jean Coutu Group Inc. posted a higher quarterly profit, beating analysts’ estimates, with modest gains in both prescription and front-store sales.

The company set a quarterly dividend of six cents a share, up 9.1 per cent from the previous quarter.

Quarterly revenue, which missed analysts’ forecasts, was hurt by government measures to bring down the price of generic drugs in Quebec, the company said.

Retail sales at stores open at least a year rose 1.4 per cent in the quarter. Pharmacy sales gained 0.9 per cent, and front-end sales – food, drink and beauty items – increased 1.5 per cent.

Generic drugs accounted for 55.6 per cent of the company’s prescriptions in the quarter, thanks to the launch of generic versions of large-volume drugs in the past 12 months. This compares with 51.2 per cent a year ago.

Jean Coutu, whose rivals include Pharmaprix, owned by Shoppers Drug Mart , runs nearly 400 drugstores in Quebec, New Brunswick and Ontario under banners including Jean Coutu, Clinique, Santé and Santé Beauté.

Earnings for the fourth quarter, ended Feb. 26, rose to $46.4 million, or 20 cents a share, from $42.8 million, or 18 cents a share, a year earlier.

Analysts, on average, were looking for 19 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose three per cent to $655.6 million, trailing the average analyst estimate of $657.9 million.

STANDARD LIFE FINANCIAL INC.

Montreal’s Standard Life Financial Inc., the Canadian arm of the Scottish-based Standard Life Plc international life insurance giant, said Thursday premiums and deposits in the first quarter of 2011 were up 19 per cent, to $1.5 billion, from a year earlier.

The company cited a good performance by the group life business and favourable markets for the growth. Savings and retirement premiums and deposits were up 36 per cent, to $894 million.

Premiums and deposits for individual investment and insurance products gained slightly, to $480 million. Segregated funds continued their strong showing, though demand for term funds and mutual funds was lower.

Assets under administration reached $41 billion at March 31, up eight per cent from a year earlier.

GARDA WORLD SECURITY CORP.

Montreal’s Garda World Security Corp. posted a fourth-quarter profit, helped by new contracts and lower costs.

The company, which provides armoured cars, cash-handling services and automated teller machine maintenance, reported net income of $10.7 million, or 33 cents a share, compared with a net loss of $40.4 million, or $1.28 per share, a year ago.

Revenue for the company, which has operations in Latin America, Europe and the Middle East, rose seven per cent, to $285.7 million.

MAPLE LEAF FOODS INC.

Maple Leaf Foods Inc. posted a higher-than-expected quarterly profit on Thursday as the food processor passed on rising raw material costs to its customers.

The company sells products, including meats and breads, under various brands, including Schneiders to Dempster’s. Maple Leaf said it saw prepared meat margins rise with the implementation of price increases. But higher prices also resulted in some volume declines.

With food inflation continuing this year, Maple Leaf plans to keep raising prices.

First-quarter earnings fell to $10.5 million, or 7 cents a share, from $19.9 million, or 13 cents a share.

Excluding special items, earnings rose to 18 cents a share. Analysts, on average, had forecast 17 cents a share, according to Thomson Reuters.

Revenue fell four per cent, to $1.15 billion, beating the analysts’ average estimate of $1.14 billion.

Sales at the meat products group, Maple Leaf’s biggest segment, fell seven per cent, to $718.2 million, largely because of the sale in November of the company’s Burlington, Ont., primary pork processing unit.

CANADA BREAD

Canada Bread posted a first-quarter loss, hurt mainly by a $20.1-million pre-tax restructuring cost to shut a fresh-bakery facility in March.

Adjusted operating earnings in the quarter fell 19 per cent, to $16.7 million, as the increase in prices to offset rising costs came at the end of the quarter and volumes in the North American frozen bakery business fell.

The Toronto-based company said it expects the price increases to strengthen margins, and it foresees its United Kingdom bakery business will continue improving through the rest of the year.

The company posted a first-quarter net loss of $966,000, or 4 cents per share.

It had earned $13.0 million, or 51 cents per share, a year ago.

The company, 90 per cent owned by Maple Leaf Foods Inc., said adjusted earnings were flat, at 56 cents per share.

CGI GROUP

Montreal’s CGI Group Inc., Canada’s largest technology outsourcing and consulting company, posted a higher second-quarter profit, as it won new contracts and extended some of the existing ones.

Net earnings for the quarter rose to $117.0 million, or 42 cents per share, compared with $81.6 million, or 28 cents per share, a year ago.

Second-quarter revenue rose to $1.13 billion from $910.0 million as the company booked contracts worth $771 million during the quarter.

POTASH CORP.

Potash Corp., the world’s largest fertilizer maker, reported a first-quarter profit that topped expectations Thursday, as soaring grain prices pushed farmers to increase their use of crop nutrients.

The Saskatoon -based company also said tight global grain inventories, coupled with strong returns on crops, will continue to spur demand for potash, phosphate and nitrogen – the three key nutrients used in fertilizers.

Potash Corp. said demand for its namesake nutrient rose to new highs, with strong demand particularly from Latin America and Asian countries outside China and India, which typically buy potash via longer-term contracts.

Net income rose in the quarter rose to $732 million, or 84 cents a share, from $444 million, or 49 cents a share, a year earlier.

Quarterly revenue rose almost 30 per cent, to $2.20 billion, driven largely by higher prices for all three nutrients.

Analysts, on average, had forecast earnings of 80 cents a share, on revenue of $2.01 billion, according to Thomson Reuters I/B/E/S.

PEPSICO INC.

PepsiCo Inc. reported a lower quarterly profit on Thursday, hurt by higher costs.

The drink and snack maker said net income was $1.14 billion U.S., or 71 cents per share, in the first quarter, compared with $1.43 billion, or 89 cents per share, a year earlier.

Revenue rose to $11.94 billion from $9.37 billion.

COLGATE-PALMOLIVE CO.

Colgate-Palmolive Co. posted a drop in first-quarter profit before one-time items Thursday as higher materials costs cut into margins.

The company earned $576 million U.S., or $1.16 a share, compared with $357 million, or 69 cents per share, a year earlier. But the year-earlier profit was hit by a one-time charge of 52 cents a share from hyperinflation accounting in Venezuela.

Excluding the charge, earnings fell eight per cent in this year’s first quarter, the company said.

VIACOM INC.

Viacom Inc. posted a higher quarterly profit on Thursday on strength in cable advertising and filmed entertainment.

Net profit from continuing operations was $376 million U.S., or 63 cents per share, compared with $255 million, or 42 cents per share, a year earlier.

Excluding items, earnings from continuing operations were 72 cents.

Revenue rose 20 per cent, to $3.27 billion.

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PROCTER & GAMBLE CO.

Procter & Gamble Co. lowered the high end of its profit forecast for the year, as it does what it can to trim costs and increase some prices to offset rising costs for materials.

Earnings rose, but fell short of Wall St.’s expectations in the latest quarter. P&G shares fell in premarket trading.

P&G earned $2.87 billion U.S., or 96 cents per share, in the third quarter ended in March, up from $2.59 billion, or 83 cents per share, a year earlier. Analysts, on average, expected 97 cents per share, according to Thomson Reuters I/B/E/S.

Sales rose five per cent, to $20.23 billion.

SPRINT NEXTEL

Sprint Nextel lost wireless subscribers in the first quarter as it faced new competition from Verizon Wireless, which started selling the Apple Inc. iPhone in February.

Sprint lost 114,000 subscribers in the quarter, compared with the average estimate for losses approaching 40,000 from seven analysts contacted by Reuters.

Its net loss narrowed to $439 million U.S., or 15 cents per share, from a loss of $865 million, or 29 cents per share, a year earlier. Revenue rose to $8.3 billion from $8.09 billion.

DEUTSCHE BOERSE

Exchange operator Deutsche Boerse on Thursday raised its outlook for cost savings as first-quarter operating profit and sales beat expectations.

Earnings before interest and taxes (EBIT) came in at 316.3 million euros ($469.3 million U.S.), beating the most optimistic expectation of 308 million euros in a Reuters poll of 12 analysts.

CME GROUP INC.

CME Group Inc. said first-quarter earnings rose 22 per cent, as the biggest United States futures exchange operator handled record trading in energy, commodities and metals.

Earnings rose to $292 million U.S., or $4.36 a share, excluding one-time items, from $240 million, or $3.62 a share, a year earlier, CME said Thursday.

TYCO INTERNATIONAL LTD.

Tyco International Ltd., which is at the centre of takeover speculation, beat Wall St. earnings forecasts on Thursday amid sharply higher operating profits at its core security division.

The maker of security systems for homes and businesses earned $315 million U.S., or 67 cents per share, in the second quarter ended March 25, up from $310 million, or 65 cents per share, a year earlier.

Earnings from continuing operations, excluding special items, were 73 cents per share, five cents ahead of the analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Sales slipped two per cent, to $3.99 billion, matching forecasts.

Wall St. analysts, on average, had expected a profit of $4.20 a share, according to Thomson Reuters I/B/E/S.

AETNA INC.

Aetna Inc. posted higher quarterly earnings on Thursday, helped by lower-than-expected medical costs, and raised its full-year profit forecast, continuing a string of strong results for the health insurance industry.

The company also said it would buy Prodigy Health Group, a third-party administrator of self-funded health plans, for $600 million U.S..

Aetna’s first-quarter net income rose to $586 million U.S., or $1.50 per share, from $562.6 million, or $1.28 per share, a year earlier.

Revenue fell about three per cent, to $8.39 billion.

DOW CHEMICAL CO.

Dow Chemical Co. said its quarterly profit jumped 34 per cent, helped largely by surging plastic sales.

For the first quarter, the largest U.S. chemical maker posted net income of $625 million U.S., or 54 cents per share, compared with $466 million, or 41 cents per share, a year earlier.

Medco Sound Overall, Misses Revs

Medco Health Solutions (MHS – Analyst Report) reported an EPS of 80 cents during the first quarter of fiscal 2011, up 19.4% from the year-ago quarter’s 67 cents. After adjusting for amortization of intangible assets, the company’s EPS came in at 91 cents, beating the Zacks Consensus Estimate of 88 cents and 19.7% higher than the year-ago quarter’s 76 cents.

Medco, the leading pharmacy benefit manager (PBM), recorded an increase of 4.3% in revenues on a year over year basis to $17.0 billion, marginally missing the Zacks Consensus Estimate of $17.1 billion. The increase in revenues was primarily driven by contributions from significant client wins as well as higher prices charged on branded drugs, partially offset by higher volumes of lower-priced generic drugs.

During the quarter, Medco witnessed a 57.5% year-over-year growth in service revenue to $357.8 million based on the acquisition of United BioSource and growth in its client service offerings. Revenues from Medco’s specialty pharmacy segment, Accredo Health Group, increased 14.9% to $3.1 billion primarily due to significant addition of new clients and organic growth across the business.

During the reported quarter, the generic dispensing rate increased 3.4 percentage points to 73.1% compared with the first quarter of 2010. Both the mail-order and retail generic dispensing rates increased 4.5 percentage points to 63.8% and 3.3 percentage points to 74.7%, respectively.

While there was no contribution from new generics during the quarter, the year-over-year rise in the overall generic dispensing rate increased the incremental savings of of the company’s clients and members to approximately $1.1 billion.

For the reported quarter, out of $16.6 billion of net product revenues, retail products accounted for $10.3 billion while mail-order products accounting for the rest. Both retail and mail-order products recorded an increase of 2.6% and 5.2%, respectively, compared with the same period last year.

Total prescription volume (244.3 million) recorded a 2.1% growth compared with the year-ago period, with mail-order volume increasing 1.8% to 27.7 million. Branded mail order prescription volume decreased 9.1% year over year to 10.0 million, while generic mail-order prescription volume increased 9.3% to 17.7 million.

Medco’s gross margin during the quarter increased 20 basis points to 6.3% due to strong generic mail-order prescription volume and growth in service margin. Also changes to the employee postretirement healthcare benefit plan helped expansion of the gross margin. Selling, general and administrative expenses increased 10.4% during the quarter to $387.1 million reflecting higher expenses associated with the acquisition of United BioSource.

Medco exited 2011 with $121.1 million in cash and cash equivalents, down from $853.4 million at the end of December 2010.The company repurchased 13.5 million shares during the quarter for $836.6 million. Moreover, 13.4% reduction in share-count also helped improved the company’s bottom line.The company aims to repurchase shares worth $2 billion during 2011.

Medco is witnessing an impressive selling season with high client retention rates driven by higher generic prescription volumes at mail, growth in Accredo specialty business and Medicare PDP, United BioSource acquisition and new-named business wins. The company’s 2011 client retention rate was 99%.

Outlook

Medco increased its guidance for fiscal 2011. The company expects to record EPS of $4.02-$4.12 (previous range of $3.80-$3.93) representing growth of 13%-16%.

Finally, track/trace action instead of talk

Wanted: pharma manufacturers to help get a track and trace prototype system off the ground.

That could be a sign planted on the lawn of Global Healthcare Exchange, a healthcare supply chain solutions provider. GHX is on its way to building such a prototype as phase 2 of its Track & Trace Project. Some version of the prototype may be in your future.

The company tells Pharmaceutical Commerce that the now complete phase 1 involved a requirements survey of pharma supply chain principals: manufacturers, distributors, and pharmacies. Findings include the gritty detail of master file data to be collected, data security and governance policies. GHX is currently working out the fundamentals of track-and-trace events, including order initiation, delivery receipt and payment, as well as the handling of snafus like missing data.

The phase 2 prototype will help uncover requirements for real-time data handling to validate the deliveries that comprise a pedigree. Transaction data security is another matter to be developed in phase 2, which is where GHX needs drugmaker participation.

It is hoped phase 2 will yield insights useful to regulators and policymakers, while also aiding the manufacturers and distributors now prepping for the California Board of Pharmacy’s 2015 e-pedigree system deadline.

FDA approves Perrigo OTC Minoxidil Foam

The US Food and Drug Administration (FDA) has approved Perrigo’s over-the-counter (OTC) Minoxidil Foam’s abbreviated new drug application (ANDA).

Perrigo ‘s Minoxidil Foam is the generic version of Men’s Rogaine Foam, used to regrow hair on the top of the scalp.

Earlier, GSK company Stiefel Research Australia had filed a lawsuit against Perrigo on Minoxidil Foam ANDA, which has been settled in February 2011.

According to the settlement agreement, Perrigo has received rights to launch the generic version of Men’s Rogaine Foam in the US on 1 March 2012, or earlier, under certain circumstances.

Perrigo chairman and CEO Joseph Papa said this is another example of Perrigo’s commitment to bring new products to market.

J&J pulls submission for Zeltia’s Yondelis

Zeltia has suffered a setback with the news that partner Johnson & Johnson has withdrawn a filing with US regulators for the Spanish drugmaker’s cancer treatment Yondelis.

J&J’s Centocor Ortho Biotech unit announced that it has voluntarily withdrawn the New Drug Application for Yondelis (trabectedin) for the treatment of recurrent ovarian cancer. The decision is based on the US Food and Drug Administration’s recommendation that an additional Phase III study be conducted.

In September 2009, the FDA issued a complete response letter regarding the NDA for Yondelis when administered in combination with J&J’s Doxil (doxorubicin). The agency wanted to see overall survival data from the pivotal OVA-301 trial and additional clinical pharmacology studies.

J&J noted that the OVA-301 overall survival data will be presented in June at the annual meeting of the American Society of Clinical Oncology, adding that it is evaluating the development programme for Yondelis in recurrent ovarian cancer: the US healthcare giant recently initiated a Phase III study with trabectedin for metastatic L-sarcoma.

Last week, Zeltia was hit by the news that the National Institute for Health and Clinical Excellence rejected the Yondelis/Doxil combo for use in ovarian cancer patients because it had concerns over its efficacy compared with standard therapies; it was approved for ovarian cancer in Europe in November 2009 and has been available for the treatment of advanced soft tissue sarcoma since September 2007

Top 10 Pharma CEO salaries of 2010

Welcome to our annual look at the biggest CEO in the pharma industry. Despite a year fraught with manufacturing issues and drug recalls, Johnson & Johnson CEO Bill Weldon takes the top spot, with $28.7 million in 2010 pay. And Novartis’ Daniel Vasella grabs the number two spot thanks to a lucrative golden handshake.

Next year we’ll have to say goodbye to a few familiar faces that are making their final appearance on this list. Pfizer’s Jeff Kindler won’t be back next year, nor will Vasella or Richard Clark of Merck. All of these CEOs will be replaced by new executives that will appear on the list. For example, Ian Read, Pfizer’s new CEO, earned more than $17 million last year, even though he didn’t become CEO until Dec. 5. George Scangos, formerly of Exelixis and now Biogen Idec CEO, was paid $9.4 million last year–and he didn’t come on board until more than halfway through the year.

Others are waiting, too. Allergan’s David Pyott ($12.7 million), Bristol-Myers Squibb’s Lamberto Andreotti ($11.8 million) and Baxter’s Robert Parkinson ($11.5 million) were close to making the list. Click below to get all the details on the top 10 highest paid biotech and pharma CEOs of 2010.

1. Bill Weldon – J&J – $28.7M

2. Daniel Vasella – Novartis – $27M

3. Miles White – Abbott- $25.6M

4. Jeffrey Kindler – Pfizer- $24.7M

5. Richard Clark – Merck – $24.6M

6. Robert Coury – Mylan – $22.9M

7. Kevin Sharer – Amgen – $21.1M

8. James Mullen – Biogen Idec – $20M

9. John Lechleiter – Eli Lilly – $16.5M

10. John Martin – Gilead Sciences – $14.2M

Kantar Health’s Anne Laprade Honored as 2011 HBA Rising Star

Anne LaPrade, R.Ph., Account Director at Kantar Health, a leading healthcare-focused global consultancy and marketing insights company, was honored today as an industry Rising Star by the Healthcare Businesswomen’s Association (HBA) at its 2011 Woman of the Year luncheon in New York.

As Account Director in the Commercial Development practice, Ms. LaPrade is responsible for ensuring that her clients receive the maximum benefit from engaging Kantar Health’s global consulting services. In her client-facing role, she is responsible for understanding the specific business needs of her clients and ensuring they obtain the support they need. Ms. LaPrade’s activities provide direct support for strategy development, market access, epidemiology and forecasting, business development and other major client requirements in the increasingly complex healthcare marketplace.

“Through challenges with deadlines and clients, Anne remains highly professional, operating smoothly and ensuring client expectations are fulfilled,” says Ian Hicks, Senior Vice President in Kantar Health’s Commercial Development practice. “Her ‘can-do’ attitude makes her a trusted advisor to the client and her Kantar Health colleagues, leading her to be sought after for insight, opinion and comment.”

Ms. LaPrade has over 20 years of direct pharmaceutical industry experience spanning research and development, operations, strategic planning, global commercialization, marketing, sales operations, and regulatory. Her experience spans several pharmaceutical companies, including the predecessors of Novartis, Pfizer, Sanofi-Aventis, and AstraZeneca. Ms LaPrade has been involved in new product development launches from the research and development side all the way through to sales planning, training, and launch. Ms. LaPrade has an extensive background in strategic planning, forecasting, and project management. Ms. LaPrade received her Pharmacy degree from the University of Nebraska Medical Center.

Witness Collaboration in Action and Be a Part of the Pharmacy Industry Transformation at NCPDP’s 201

As the healthcare industry moves toward its goals of improving the quality of care and reducing costs, NCPDP invites industry stakeholders to celebrate the successes of pharmacy industry collaboration at its 2011 Annual Technology & Business Conference, May 15-19, 2011 at the Arizona Biltmore Resort in Phoenix, Arizona. The Conference attracts representatives from pharmacies, health plans, payers, PBMs and technology vendors that have supported the transformation of the pharmacy industry over the past 30+ years, bringing solutions to standards development that have improved patient care and the efficiency of pharmacy/healthcare systems.

NCPDP’s 2011 Annual Conference is on track to draw record-breaking attendance this year. In addition to comprehensive educational sessions on Fraud and Abuse, Healthcare Reform, DEA (Drug Enforcement Administration) Interim Final Rule, Clinical Interoperability, and more, the conference includes an exhibit hall, networking opportunities and social events. Conference attendees may also participate in NCPDP Work Group meetings, which will be held during the conference, and join the teams of professionals that are committed to solving the information technology challenges that impact the delivery of healthcare/pharmacy services.

Witness Collaboration in Action and Be a Part of the Pharmacy Industry Transformation at NCPDP’s 2011 Annual Conference

SCOTTSDALE, AZ–(Marketwire – May 2, 2011) – As the healthcare industry moves toward its goals of improving the quality of care and reducing costs, NCPDP invites industry stakeholders to celebrate the successes of pharmacy industry collaboration at its 2011 Annual Technology & Business Conference, May 15-19, 2011 at the Arizona Biltmore Resort in Phoenix, Arizona. The Conference attracts representatives from pharmacies, health plans, payers, PBMs and technology vendors that have supported the transformation of the pharmacy industry over the past 30+ years, bringing solutions to standards development that have improved patient care and the efficiency of pharmacy/healthcare systems.

NCPDP’s 2011 Annual Conference is on track to draw record-breaking attendance this year. In addition to comprehensive educational sessions on Fraud and Abuse, Healthcare Reform, DEA (Drug Enforcement Administration) Interim Final Rule, Clinical Interoperability, and more, the conference includes an exhibit hall, networking opportunities and social events. Conference attendees may also participate in NCPDP Work Group meetings, which will be held during the conference, and join the teams of professionals that are committed to solving the information technology challenges that impact the delivery of healthcare/pharmacy services.

Bill Would Repeal Maine Restrictions on Pharmacy Benefit Managers

Insurers and big employers hire them to handle drug plans and negotiate discounts with drug manufacturers. Consumer advocates say it’s a complicated set-up that needs monitoring to keep PBM’s from cutting lucrative side deals for favoring certain drugs over others, but doing nothing to keep prescription costs down.

But the industry says requiring PBMs to disclose its contractual agreements with drugmakers is, among other things, bad for business. “This law has indeed shaped the marketplace in Maine but in a way that’s not good for Maine patients or Maine customers. It’s had a chilling effect,” said Andy Friedell, a lobbyist for MedCo, one of the three largest PBM’s in the country, with more than 80 percent market share among them.

Friedell said the law has led the company to turn down business in Maine. “We believe that payors deserve competition–that’s the best way to drive better prices in this marketplace–not restrictive laws. It’s going to give them a a better deal if they have more choices. If one of our competitors is not offering a customer a good deal, we’d be eager to go in and talk to that customer about giving them a better price.”

Friedell was speaking before the Legislature’s Health and Human Services Committee, testifying in favor of a repeal bill sponsored by the committee’s co-chair, Republican Rep. Meredith Strang-Burgess, of Cumberland.

Democratic Rep. Sharon Treat, of Hallowell, sponsored the legislation to regulate PBM’s, which passed in 2003. She says that the law is needed as much as ever. “I find it actually very hard to believe that in this time of tight budgets, Medicaid shortfalls and legislative oversight investigations into improper agency spending that this Legisiature would knowingly enact a bill that would increase prescription drug costs,” she said.

Treat said that the law requires PBM’s to give notice if they are to switch patients to similar, but higher-cost, drugs and to pass on any savings from contracts they have with drugmakers to customers.

Treat said contrary to what PBM’s say, the law is better for their customers. “Our law requiring transparency of BPM practices is intended to give PBM clients the tools they need to monitor self-interested PBM practices or to confidently chose a competing PBM that offers better terms.”

Treat was backed by community pharmacies, which face competition from PBM’s mail-order operations. Besides, Medco, the two other major PBMs–Express Scripts and Caremark, which is owned by drugstore chain CVS–also testified in support of repeal, portraying the law regulating the industry as the most extreme in the country.

Michael Cianchette, an attorney for the LePage adminstration agreed, saying that Maine should conform to the national norm.

This prompted a retort from commitee member Linda Sanborn, a Democratic Rep. from Gorham, and a retired doctor. “When we are doing something better than a lot of other places in the country, people want to bring us back to the federal level, even if it’s not better,” she said. “And I think that’s wrong.”

Sanborn told Cianchette that the LePage administration appears to be siding with big business over local community pharmacies.

Cianchette replied that’s completely untrue. “We believe that businesses can take care of themselves,” he said. “They don’t need representatives, the senators, the governor in Augusta to tell them what they need to have in their contracts, tell them what they must do.”

This is the first time the law, passed during the Democratic Baldacci administration, has faced a serious challenge in the Legislature, where Republicans now have a majority.

But the law has survived attacks in the courts. A federal appeals court in Boston in 2005 upheld the law. The trade group for PBM’s appealed the decision but the Supreme Court decided not to hear the case.

Pay for Delay: U.S. Says Drugmakers Block Cheaper Generic Rivals

The Federal Trade Commission has found an “unprecedented” 60% jump in drug industry “pay for delay” deals that stall consumers’ access to cheaper generic drugs, hurting consumers’ and taxpayers’ wallets.

The report could lay the groundwork for even more antitrust, anti-monopoly actions the government has increasingly been bringing against Big Pharma.

Drug companies “struck an unprecedented number of deals” in fiscal 2010, where drug makers of brand name pharmaceuticals paid “potential generic rivals and generic companies to defer the introduction of lower-cost medicines for American consumers, the FTC said in a statement.

The FTC adds in its statement that its review “found that the number of these deals skyrocketed more than 60%, from 19 in FY [fiscal] 2009 to 31 in FY 2010.

The deals spanned 22 brand-name drug products with total annual U.S. sales of roughly $9.3 billion.

This hurts consumers and senior citizens in Medicare. Under a deal struck by the Administration with the drug industry in health reform, Medicare is prohibited from negotiating lower drug prices in Medicare Part D.

President Barack Obama recently noted in a speech however that his Administration will seek to “cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.” That had the drug industry crying foul, that the President had backtracked on its health-reform deal. (EMac Bottom Line, April 21: “Drug Industry: President Reneges on Health-Reform Deal.”)

Joseph Paduda, a principal at Health Strategy Associates, says Medicare would save about $20 billion a year if it was allowed to negotiate lower drug prices.

Companies like Merck, & Co. have paid generic drug rivals to settle their patent challenges, in exchange for agreements that delay the introduction of lower-cost drugs. The FTC staff study found that such moves can delay a new generic drug “by 17 months longer on average than those that do not include a payment.”

“Collusive deals to keep generics off the market are already costing consumers and taxpayers $3.5 billion a year in higher drug prices,” said FTC Chairman Jon Leibowitz in a statement. “The increasing number of these deals is a win-win proposition for the pharmaceutical industry, but a lose-lose for everyone else.”

The FTC says though that generic drugs typically are “at least 20% to 30% less than the name-brand drugs, and in some cases are up to 90% cheaper.”

The FTC also says in its statement that it has increasingly challenged these pay to delay deals in court on the grounds that they are anticompetitive and violate U.S. antitrust laws.

The FTC staff report says that patent settlements filed with the FTC and the Department of Justice last year totaled 113. Of those, 31 settlements contained a payment to a generic manufacturer and also restricted the generic’s ability to market its product, the FTC says.

Notably hurt here are Medicare and Medicaid. In health reform, the Administration reportedly agreed to not allow the reimportation of cheaper generic drugs from Canada and elsewhere, and to not use the massive purchasing power of Medicare to negotiate cheaper drug prices via its Part D program.

The Administration did so in order to get the drug industry to endorse health reform and to pony up an estimated $80 billion in cost savings over a decade. Certain states do negotiates with drug companies to get cheaper drug prices in Medicaid programs.

Joseph Paduda, a principal at Health Strategy Associates, says Medicare should be able to negotiate lower drug prices, to protect taxpayers and consumers, and cut the deficit.
Paduda notes however that “Medicare is prohibited from negotiating with pharma due to legislation passed in 2003, the “Medicare Modernization Act.”

Instead, Medicare has to pay pharmacy benefit managers like Express Scripts, CVS Caremark or Medco to act as intermediaries to negotiate lower drug prices with pharmaceuticals on behalf of seniors and taxpayers.

Moreover, Paduda notes that the government is “prohibited from basing reimbursement on effectiveness of a drug or device – thus taxpayers have to fund drugs or devices that are only 1% effective.”

And the Veterans Administration is the only federal entity that is allowed under the law to negotiate drug prices, either the minimum 24% discount off the non-federal average manufacturer price or the “best price” the manufacturer will give, whichever is lower.

Pharmacy Benefit Management Institute (PBMI) Announces New Executive Director

The Pharmacy Benefit Management Institute (PBMI), a national organization committed to research and education in pharmacy benefit management, announced today the appointment of its new Executive Director. Dr. Brenda Motheral accepted the position following a rigorous search process.

“PBMI has a well-established reputation as the nation’s leading, independent research organization of current trends and best practices in the pharmacy benefit management industry,” Motheral said. “I look forward to furthering the organization’s commitment to provide the best research and educational tools available which serve to continually foster enhancements throughout the PBM marketplace.”

Dr. Motheral began her career as a research scientist in the area of cost-effectiveness of pharmaceuticals. Since that time, she has led research, product development, and strategy in the pharmacy benefit and disease management industries. Her work has focused on leveraging applied research for drug coverage decisions, identifying and designing new products, and implementing large health services programs. Over the last decade, Dr. Motheral has published more than 50 peer-reviewed articles in the areas of cost-effectiveness, pharmaceutical cost management, and disease management and has received national research awards from both The Academy for Managed Care Pharmacy and The International Society for Pharmacoeconomics and Outcomes Research.

Dr. Motheral also holds a faculty appointment at The University of Kentucky College of Pharmacy and previously served as a faculty member at The University of Arizona College of Pharmacy and as the Director of the University’s Center for Pharmaceutical Policy. Dr. Motheral has a PhD focused in Health Economics, an MBA, and BS in Pharmacy.

About The Pharmacy Benefit Management Institute (PBMI)

PBMI provides research and education to help healthcare benefit executives work with pharmacy benefit managers (PBMs) and other professionals to design prescription drug benefit programs. PBMI provides a forum for purchasers to exchange ideas and drive marketplace changes that improve pharmacy benefits and control costs.

Pharmacist named Clinician of the Year

National, April 19, 2011—While the pharmaceutical industry is typically thought to be at odds with the natural products industry, a nationally recognized pharmacist continues to buck that stereotype and successfully build bridges and understanding between the two.

Named one of the “50 Most Influential Pharmacists” by American Druggist magazine, Jim LaValle has now also been named 2011 Clinician of the Year by the Natural Products Association.

“Ninety five percent of all physicians and nurses take nutritional supplements,” says LaValle, who has been integrating natural therapies into various medical and business models for 27 years. “I want to see natural medicine take its rightful place in helping improve and maintain the health and well being of people everywhere.”

With a comprehensive understanding of body chemistry, LaValle is among the nation’s most trusted health care professionals. He currently trains thousands of physicians and other health care professionals each year on the application of natural therapies in their contemporary practices. And LifeTime Fitness, the nation’s largest health and fitness chain, just partnered with LaValle to implement a comprehensive approach to weight management as part of their fitness and weight loss programs. LaValle also founded LaValle Metabolic Institute, an interdisciplinary medicine facility in Cincinnati where he has served thousands of patients using his metabolic model for health. And he founded Integrative Health Resources, a natural products industry consulting company. He also served as an adjunct associate professor at Cincinnati College of Pharmacy for over 14 years and currently serves as Adjunct Professor in Metabolic Medicine at the University of South Florida Medical School.

“In considering you for this award, we considered the breadth of your work in the field of integrative health care,” said John Gray, Executive Director and CEO of the natural products association, a group that represents more than 10,000 retailers, manufacturers, wholesalers and distributors of natural products including foods, dietary supplements, and health and beauty aids. “Congratulations on this honor.”

CVS to pay $17.5M over inflated Medicaid claims

CVS Pharmacy, the pharmacy division of CVS Caremark Corp., will pay $17.5 million to the United States and 10 states to settle False Claims Act accusations, the Department of Justice announced late Friday afternoon.

The settlement resolves allegations that CVS overbilled the government for prescription drugs by charging the Medicaid programs in Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island more than what CVS was owed.

According to the DoJ, CVS billed and was paid a higher amount by Medicaid than what the insured would have been obligated to pay had the claims been submitted solely to a third-party insurer.

“Medicaid covers the poorest, most vulnerable people in American society. Overcharging this needed government program for prescriptions is a disservice to everyone, and won’t be tolerated,” Daniel R. Levinson, Inspector General of HHS, said in a statement. “OIG will work vigilantly with law enforcement partners at all levels of government to safeguard this vital program.”

Under the agreement, CVS will pay the U.S. $8 million and the 10 states $9.5 million, plus interest.

CVS has denied any wrongdoing and said it chose to settle the claims to avoid the expense and uncertainty of protracted litigation. “CVS/pharmacy did not intentionally overcharge any state Medicaid program,” it said in a statement. “The company regularly receives reimbursement from Medicaid and believes it is in compliance with each state’s billing requirements for dual eligible patients.”

The case was brought to the DoJ by a whistleblower in Minnesota. The St. Paul CVS pharmacist will receive $2.6 million.

Health Care Up, Financials Down As Chinese Indices Close Flat

The Shanghai Composite Index was up 0.27 percent or 8.00 points to close at 3,007.04 points today on transaction value of 143.80 billion yuan.

The Shenzhen Component Index dipped 0.35 percent or 45.40 points to close at 12,753.85 points today on transaction value of 104.39 billion yuan.

Led by Shandong Lukang Pharmaceutical (600789, 9.67, +10.01%) and Jilin Zixin Pharmaceutical Industrial (002118, 37.76, +9.99%), the health care sector outperformed today. Both Sichuan Dikang Sci&Tech Pharmaceutical Industry (600466, 13.29, +9.47%) and Tibet Cheezheng Tibetan Medicine (002287, 24.06, +9.21%) surged by more than 9 percent. In addition, several health care stocks rose by more than 5 percent, including Zhejiang CONBA Pharmaceutical (600572, 25.68, +6.78%), Huadong Medicine (000963, 28.32, +6.71%), Renhe Pharmacy (000650, 20.56, +6.14%) and Shandong Shanda Wit Science & Technology (000915, 18.22, +5.20%). Shang Dong Dong-E E-Jiao (000423, 46.00, +3.23%) posted a 60.99 percent year-on-year increase in first quarter net profit to 268 million yuan. However, Shenzhen Hepalink Pharmaceutical (002399, 103.97, -10.00%) extended yesterday’s falls to fall by its daily limit of 10 percent. It said first quarter net profit attributable to shareholders dropped 39.11 percent year-on-year to 152 million yuan.

The information technology sector gained today. Sichuan Jiuzhou Electric (000801, 14.78, +9.97%), Leshi Internet Information & Technology (300104, 69.70, +10.01%) and Vtron Technologies (002308, 18.11, +10.02%) jumped by their daily limits. Vtron Technologies posted a 44.58 percent increase in 2010 net profit to 201 million yuan. Shandong Uroica Automatic Equipment (300099, 40.85, +8.38%) and Shenzhen Sunyes Electronic Manufacturing Holding (002388, 26.08, +7.41%) followed the increases with gains of above 7 percent. ZTE Corporation (000063, 29.15, +2.68%) posted a 15.86 percent year-on-year increase in first quarter net profit to 127 million yuan.

The non-ferrous sector metals sector stopped declining today as a majority of the companies from this sector finished with gains. Baoji Titanium Industry (600456, 31.31, +6.93%), Sichuan Hongda (600331, 18.77, +5.63%), Zhejiang Hailiang (002203, 18.70, +5.29%) and Jiangsu Alcha Aluminium (002160, 18.59, +5.03%) all gained more than 5 percent. Yunnan Copper (000878, 25.42, +1.32%) said first quarter net profit attributable to shareholders rose 5.69 percent year-on-year to 174 million yuan. Share prices of gold mining companies such as Zhongjin Gold (600489, 39.57, +4.85%), Henan Yuguang Gold & Lead (600531, 33.00, +2.61%) and Zijin Mining Group (601899, 8.17, +2.90%), gained.

The chemicals sector fell today. Cangzhou Mingzhu Plastic (002108, 19.68, -10.01%) and Xinjiang Zhongtai Chemical (Group) (002092, 14.20, -10.01%) dropped by their daily limits. Meanwhile, Xinjiang Dushanzi TianLi High & New Tech (600339, 15.88, -8.68%), Shandong Liaherd Chemical Industry (002217, 13.90, -7.58%) and Jiangsu Chengxing Phosph-Chemicals (600078, 11.35, -7.42%) fell. Inner Mongolia Yili Energy (600277, 16.02, -2.20%) traded lower despite posting a 626.07 percent year-on-year surge in net profit to 11.89 million yuan in the first quarter.

Shares of most banks dropped today, including Industrial Bank (601166, 29.97, -3.29%), Shenzhen Development Bank (000001, 18.07, -1.95%) and China Merchants Bank (600036, 14.66, -1.15%). Insurers fell as well. China Pacific Insurance (Group) (601601, 24.22, -0.66%), Ping An Insurance (Group) (601318, 52.62, -0.34%) and China Life Insurance (601628, 21.63, -0.14%) ended with losses today.

Pharmacist named Clinician of the Year

National, April 19, 2011—While the pharmaceutical industry is typically thought to be at odds with the natural products industry, a nationally recognized pharmacist continues to buck that stereotype and successfully build bridges and understanding between the two.

Named one of the “50 Most Influential Pharmacists” by American Druggist magazine, Jim LaValle has now also been named 2011 Clinician of the Year by the Natural Products Association.

“Ninety five percent of all physicians and nurses take nutritional supplements,” says LaValle, who has been integrating natural therapies into various medical and business models for 27 years. “I want to see natural medicine take its rightful place in helping improve and maintain the health and well being of people everywhere.”

With a comprehensive understanding of body chemistry, LaValle is among the nation’s most trusted health care professionals. He currently trains thousands of physicians and other health care professionals each year on the application of natural therapies in their contemporary practices. And LifeTime Fitness, the nation’s largest health and fitness chain, just partnered with LaValle to implement a comprehensive approach to weight management as part of their fitness and weight loss programs. LaValle also founded LaValle Metabolic Institute, an interdisciplinary medicine facility in Cincinnati where he has served thousands of patients using his metabolic model for health. And he founded Integrative Health Resources, a natural products industry consulting company. He also served as an adjunct associate professor at Cincinnati College of Pharmacy for over 14 years and currently serves as Adjunct Professor in Metabolic Medicine at the University of South Florida Medical School.

“In considering you for this award, we considered the breadth of your work in the field of integrative health care,” said John Gray, Executive Director and CEO of the natural products association, a group that represents more than 10,000 retailers, manufacturers, wholesalers and distributors of natural products including foods, dietary supplements, and health and beauty aids. “Congratulations on this honor.”

I, Robot, in the pharmacy

On one side of the double white steel doors is Remedi SeniorCare’s present: a conventional pharmacy, complete with rows of shelves, hundreds of prescription drug bottles and staffers who fill thousands of orders a day for nursing homes and assisted-living centers.

It’s adequate, but certainly not cutting-edge.

“This is the dinosaur of medication administration,” said Michael G. Bronfein, Remedi’s chief executive, during a recent tour of the 50,000-square-foot floor.

But push through to the other side of the white doors and you see Remedi’s future: robots.

The Rosedale-based company has spent about $30 million to design and build an automated, computerized system that packages, labels and conducts quality control on thousands of individual drug orders a day.

Robotics has long played a role in the automation of industries from electronics to automobiles. Increasingly, robots are being deployed in health care settings to help cut costs and staff time, and improve efficiency and safety.

“It’s like a big Pez dispenser,” Bronfein said gleefully about two machines, each roughly the size of a cargo container. “But with a super-gigantic brain.”

Remedi and its robots represent Bronfein’s ambitious, high-tech re-entry into the world of long-term-care pharmaceutical services.

Bronfein, who grew up in Randallstown, co-founded NeighborCare, which started as a local pharmacy chain in the 1980s and grew into a massive player in the institutional pharmacy industry, which fills the prescription drug needs of nursing homes and assisted-living centers. That company was sold to a larger rival six years ago for $1.8 billion.

Now, Bronfein is starting over with a smaller company, but he’s gearing up to go toe-to-toe with bigger institutional pharmacy competitors. With health care costs soaring, skilled-nursing and assisted-living facilities are looking for savings on prescription drug costs for their residents. So Bronfein and some other companies with access to capital are turning to automation for an economic and operational edge.

Using robotic technology to automate the drug dispensing and packaging process — a round-the-clock operation for institutional pharmacies — is still a rare technological step in a fragmented industry with scores of small local and regional companies.

CVS to pay $17.5M over inflated Medicaid claims

CVS Pharmacy, the pharmacy division of CVS Caremark Corp., will pay $17.5 million to the United States and 10 states to settle False Claims Act accusations, the Department of Justice announced late Friday afternoon.

The settlement resolves allegations that CVS overbilled the government for prescription drugs by charging the Medicaid programs in Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island more than what CVS was owed.

According to the DoJ, CVS billed and was paid a higher amount by Medicaid than what the insured would have been obligated to pay had the claims been submitted solely to a third-party insurer.

“Medicaid covers the poorest, most vulnerable people in American society. Overcharging this needed government program for prescriptions is a disservice to everyone, and won’t be tolerated,” Daniel R. Levinson, Inspector General of HHS, said in a statement. “OIG will work vigilantly with law enforcement partners at all levels of government to safeguard this vital program.”

Under the agreement, CVS will pay the U.S. $8 million and the 10 states $9.5 million, plus interest.

CVS has denied any wrongdoing and said it chose to settle the claims to avoid the expense and uncertainty of protracted litigation. “CVS/pharmacy did not intentionally overcharge any state Medicaid program,” it said in a statement. “The company regularly receives reimbursement from Medicaid and believes it is in compliance with each state’s billing requirements for dual eligible patients.”

The case was brought to the DoJ by a whistleblower in Minnesota. The St. Paul CVS pharmacist will receive $2.6 million.

FDA needs teeth to avert drug shortages

It didn’t used to be in Sandy Binder’s job description to be a drug sleuth.

As director of oncology community practices at UCLA, she didn’t have to spend two hours a day checking on the supply of crucial cancer drugs at her six clinics and dickering with suppliers to make sure her doctors could get their hands on what their patients needed, even if at a markup that tripled the normal cost.

Those were the old days, before the crisis of drug shortages in the United States spiraled out of control.

In 2004, the authoritative drug information service of the University of Utah recorded critical shortages for 58 drugs. Last year the number of new shortages reached 211, and this year reports of new shortages are arriving at a pace of more than one a day. So stand by for a record-breaking year, the service’s director, Erin Fox, told me.

We’re not talking about obscure medications or “orphan drugs,” which are those used to treat rare conditions. These are drugs used every day in operating rooms, by emergency crews and in cancer centers.

They include such widely used medications as leucovorin, a component of the gold standard for the treatment of colorectal cancer. Since about 2008, leucovorin has been in a “chronic, lingering, malignant, festering shortage” despite its importance, says Dwight Kloth, director of pharmacy at Fox Chase Cancer Center in Philadelphia.

Although there are multiple reasons for the explosion of drug shortages in this country, taken together they show that the structure of the pharmaceutical industry and its system of regulation are both deeply flawed. It doesn’t help that Congress, which often behaves like a subsidiary of the drug industry, hasn’t given the Food and Drug Administration decent tools to address the problem.

Those tools include information and clout. The FDA lacks both. Except in limited cases, drug companies aren’t required to issue advance notice of a decision to discontinue making a drug — not to the government, nor to hospitals, doctors, or patients.

Drug companies are required to give the FDA advance notice if they’re the sole supplier for a “medically necessary” drug. But the definition of “medically necessary” is murky; even widely used cancer drugs aren’t usually on the list, says Michael Link, a Stanford pediatrics professor and president-elect of the American Society Of Clinical Oncology.

What’s the legal penalty for violating the advance-notice rule? There isn’t one. The FDA can give the violator a stern talking-to, but after that, it’s shot its bolt. It can try to jawbone a company into continuing to manufacture an important product, but “if they refuse to reconsider, there’s nothing we can do,” says Valerie Jensen, head of the FDA’s drug shortage program.

Drug makers aren’t required to say why they’ve stopped making a drug. As Utah’s Fox reported in November at a conference on drug shortages, the reason most often cited — in 47% of the cases — is “unknown.” It’s known to the manufacturer, of course, just not to the public.

Almost all the critical shortages occur among generic products, which tells us that this has a lot to do with money. Profit margins for generics are a fraction of those for drugs still under patent. Consequently the cost-benefit calculus for a generics company getting bugged by the FDA over its manufacturing standards, say, are a lot different from those for a company with a blockbuster monopoly.

Genentech, for instance, has a huge economic incentive to keep turning out its cancer drug Avastin, for which colon cancer patients might pay more than $50,000 a year. Avastin racked up about $7.2 billion in sales in 2010, more than 17% of the pharmaceutical sales of Genentech’s parent, Roche.

By contrast, the maker of some aging product that sells for $1,500 per course of chemo might decide that the profit in the drug isn’t worth the hassle of upgrading its plant to meet FDA safety requirements.

Contributing to the crisis is a rapid consolidation of the generics industry over the last decade or so. When generics firms snarf each other up, the available sources for individual drugs shrink accordingly.

Then there’s the drug industry trend of acquiring raw materials from overseas sources, like China, where quality control doesn’t always meet Western standards and where problems are harder to fix when they crop up.

One huge driver of the current crisis is the yearlong shutdown of Teva’s Irvine factory, which was the source of as many as 55 products, including an injectable form of the cancer drug leucovorin. The factory went offline last April, not long after it flunked an FDA inspection, and still hasn’t come back. Teva says it hopes to restart the plant in “the very near future,” but says even then it will step up production slowly.

Teva’s shutdown has had a ripple effect across the generics industry, for the company was such a dominant source of several of the impacted drugs that its rivals can’t easily ramp up to replace those supplies.

Congress hasn’t exactly fallen over itself to meet this crisis. One promising approach is a bill still being drafted by Sens. Amy Klobuchar (D.-Minn.) and Bob Casey, (D.-Pa.). Their measure would require that drug makers notify the FDA of any event that might affect supply — a manufacturing glitch, a merger, a simple business decision — and impose a penalty for silence.

That would be a good start, because the FDA has shown it can sometimes avert shortages by authorizing alternative drug sources or expediting approvals for new manufacturers — if it has time. Last year, the agency says, it managed to prevent shortages of 38 drugs with these tactics.

Yet the structural issues persist. The problem might be alleviated if the FDA could require a manufacturer to commit to a minimum period of manufacturing as a condition of its license, or if merger regulators could consider the effect on drug supply of allowing one drug company to buy out a rival. Don’t expect to see anything like that in upcoming legislation. “We’re trying to get to something that’s doable in Congress right now.” Klobuchar told me.

Meanwhile doctors and their patients have no choice but to deal with one more uncertainty in their lives.

As a big customer, UCLA has more leverage over drug suppliers than most hospitals, but it’s not immune from pervasive shortages. Securing reliable supplies is “a constant battle,” Binder says.

In years past, she says, one hospital might offer another a crucial drug to fill in a momentary shortage, confident the loan would be paid back in a day or so. No longer. Hospital administrators today live in fear that they could be giving away the last of their own supply.

“There’s no being nice to anyone anymore,” Binder says wryly. “You want to save it for your own patients.”

Top Trends and Key Drivers of Pharmacy Spend In Workers’ Comp

The primary concern of the workers’ compensation industry continues to be centered on pharmacy spend. A workers’ compensation pharmacy benefit management (PBM) offering must control costs and respond to industry issues. Successful PBM programs should drive network and mail order penetration and optimize outcomes through strong, industry-specific clinical oversight.

The importance of understanding spending trends, mainstream challenges and the industry landscape being faced by payers and employers cannot be overemphasized. A comprehensive analysis of the workers’ compensation industry should be based on robust informatics and a keen understanding of market trends.

For the past four years, PMSI has issued a study of drug trends in the workers’ compensation arena. Its recent 2011 Annual Drug Trends Report provides a review of 2010 pharmacy spend and strategies for mitigating pharmacy cost. The 2011 report findings are based on data analysis of PMSI’s 5.4 million retail and mail order transactions during calendar years 2008–2010.

The report identifies the top 10 drivers that affect pharmacy spend across the areas of cost, utilization and drug mix; provides perspectives regarding pharmacy benefit management and clinical programs; and explores industry trends, such as physician dispensing, expanded use of pharmacy networks, pain management, and the broadening of formularies and utilization controls.

Drivers Impacting Pharmacy Spend

A sharp reversal in the overall pharmacy spend per injured worker was experienced in 2010 with a decrease of 2.3 percent, as compared to a 6.9 percent increase in 2009. This decline was made up of a variety of factors related to cost and utilization, including the effectiveness of clinical controls and mail order penetration strategies. The most important findings of the report are:
Average Cost per Day of Supply: Average drug cost per day of supply fell 2.0 percent from $5.03 to $4.93. The decrease was attributed primarily to three factors: The limited average wholesale price (AWP) increase in 2010, increased use of generics, and increased mail order penetration.
AWP Change: Average wholesale price changes represented a 3.5 percent increase in the average cost per day of supply in 2010—45 percent less than the increase in 2009.
Brand and Generic Mix: Generic efficiency increased to 92.6 percent in 2010 while the average cost per day of supply of a generic medication was approximately 70 percent less than a brand medication.
Mail Order Impact: Mail order penetration increased to 29.3 percent while the cost per day of supply through mail order was 19 percent less than through a retail pharmacy.
Days of Supply per Injured Worker: A 0.3 percent reduction in average days of supply was observed. This decrease in prescription utilization was related to a decrease in dosing frequency and the use of medications for shorter durations.
Dosing Frequency: During 2010, there was a 1.8 percent decrease in the average number of doses per day.
Duration of Injury: The overall duration of injury increased by 1.0 percent to 4.7 years. Despite this, prescription cost and utilization notably decreased, especially for claims older than three years.
Generic Dispensing and Efficiency: The generic dispensing rate increased 3.5 percent over the prior year and generic efficiency also increased 0.7 percent over 2009.
Duration of Injury and Impact of Generic Medications: In contrast with previous years, generic efficiency increased as claims aged, especially for those over four years old.
New Medication Releases: New medications released in 2010 had only a small impact on total drug spend.

Ending drug companies’ addiction to price rises

Drug companies are dosing up on price increases to prop up stagnant sales, but will soon need to break that addiction as more medicines face generic competition.

Industry executives — notably on the pharmacy management and specialty drugs side — told the Reuters Health Summit this week that prices for some drugs have been sharply increased because manufacturers need to make up for a lack of new products and the loss of patent protection on older medicines.

“Prices were just shoved up every year to make more money and meet earnings, to be blunt,” Shire (SHP.L) Chief Executive Angus Russell said.

He was referring to so-called mass market drugs used to treat common conditions like high blood pressure, rather than the specialty products for rare genetic diseases that are Shire’s hallmark.

Payments for two-thirds of the 15 best-selling drugs in the United States rose by double-digit percentage rates last year, according to an analysis of medical claims data by Thomson Reuters MarketScan.

“The industry has been in volume decline for three years — it’s been propped up on price,” said Tim van Biesen, head of Bain & Co’s healthcare practice. “You have to ask how long that can continue.”

He forecast that worldwide sales for the top 25 pharmaceutical companies will be flat for the next five years.

“This is the only industry in the world that has never had to go down the experience curve in cost,” van Biesen said, pointing out that prices for electronics always drop as new technology comes on the market.

According to MarketScan, paid claims for Pfizer’s (PFE.N) Lipitor, which will go off patent in November, rose 11.4 percent last year, compared with 5 percent annually in the previous five years. Drugs with price rises in the mid-teens included: cholesterol drug Crestor made by AstraZeneca (AZN.L); blood-clot preventer Plavix sold by Bristol Myers Squibb (BMY.N) and Sanofi (SASY.PA); and asthma treatment Singulair, from Merck & Co. (MRK.N)

“As their branded drugs approach the patent cliff, there has always been the tendency to see increased pricing toward the end, just to get the last dollar out of every drug before they lose brand protection,” said David Snow, chief executive officer at Medco Health Solutions (MHS.N), one of the nation’s largest managers of prescription drug benefits.

PREMIUM PRICES

When it comes to ground-breaking new medicines, premium pricing is still the order of the day. The trouble for companies like Pfizer, Merck and Sanofi is that they are not producing enough breakthrough treatments.

Swiss drugmaker Novartis (NOVN.VX) set an average annual U.S. price for Gilenya, the first oral treatment for multiple sclerosis, of $48,000 last October — a hefty premium to the price charged for older medicines, which must be injected.

Novartis was able to justify that price, given the new drug’s effectiveness and the fact that it frees patients from injections. But the premium pricing has since been followed by steep price rises for some of the older injectable products.

Drugmakers say the limited lifetime of their brand-name medicines — they will eventually be supplanted by low-cost generics — and high development costs mean they need to bring in as much revenue as possible before patents expire.

Medco’s Snow said other costs, including the 10-year $80 billion excise tax that will be assessed on brand pharmaceutical companies under last year’s U.S. healthcare reform law, are also taken into account.

“If you think for a second they are just going to take their bottom line, hand it over in taxes to the government and not consider it a cost of doing business, then people don’t understand how business works,” he said. “So it does not surprise me we’ve seen an acceleration in price increases to make up — to pay for those taxes.”

Drug companies typically offer hefty discounts and rebates to insurers and government payers, making list prices virtually useless as a tool for tracking drug sales.

“We really don’t have good transparency on pricing in the United States market,” said AstraZeneca CEO David Brennan, while noting that it is one of the few markets where companies can freely raise prices.

Bain’s van Biesen said pharmaceutical companies — barring a major innovation leap — are facing several years of stagnant growth.

“We have observed some really high price increases being taken by other companies in the U.S. … which I just find absolutely incredible,” GlaxoSmithKline (GSK.L) CEO Andrew Witty said on a recent conference call.

“We think it is probably not the right moment for people to be taking crazy price increases. We think ultimately that is going to come back to bite.”

Cardiologists among top users of electronic prescriptions

An estimated 36% of office-based physicians were sending their prescriptions to the pharmacy electronically at the end of 2010, up from 26% the year before, according to a pharmacy-industry group that promotes e-prescribing. Cardiovascular specialists led the way, with 49% of physicians in this specialty “actively e-prescribing,” their report says. Family physicians, internists, and ophthalmologists were also heavy users of e-prescriptions, with between 40% and 50% pushing the “send” button for scrips, the group says.

That organization, called Surescripts, reports these numbers in its annual report for 2010, scheduled for release today. Surescripts’s national data network accounts for the vast majority of electronic prescriptions in the US.

In all, some 190 000 physicians were e-prescribing at the end of 2010. Counting nurse practitioners and physician assistants, the number of e-prescribers stood at 234 000, up from 156 000 at the end of 2009.

Technically, an e-prescription is one transmitted electronically from a prescriber’s computer to a pharmacy’s computer, as opposed to being entered into a computer and then either printed out or faxed to the pharmacy. E-prescriptions include not only new prescriptions but also renewals, which begin with the pharmacy transmitting a request to the provider and the provider responding. Overall, the number of new prescriptions and replies to renewal requests transmitted electronically went from 190 million in 2009 to more than 326 million in 2010, an increase of 72%. By the end of 2010, roughly one in four prescriptions was electronic.

The number of prescription histories electronically delivered to prescribers grew from 81 million in 2009 to 230 million in 2010. And during that same time span, responses to electronic requests—easier than phone requests—for prescription benefit information such as formularies rose from 188 million to 423 million.

Two federal programs pay bonuses to physicians who e-prescribe, and Surescripts says these financial carrots help explain the rising numbers in their annual survey.

Under a 2009 law called the Medicare Improvements for Patients and Providers Act (MIPPA), physicians could receive a 2% Medicare bonus in 2010 if they e-prescribed using approved software. The bonus decreases to 1% in 2011 and 2012 and 0.5% in 2013 and disappears in 2014. Coupling carrot with stick, Medicare introduces a 1% pay-cut penalty in 2012 for physicians who fail to report at least 10 electronic prescriptions in the first six months of 2011 on their Medicare claims. The penalty grows to 1.5% in 2013 and to 2% in 2014.

In addition, the economic stimulus legislation of 2009 called the American Recovery and Reinvestment Act (ARRA) authorizes up to $44 000 under Medicare over five years and almost $64 000 under Medicaid over six years to physicians who demonstrate “meaningful use” of an electronic health record (EHR) system. One criterion of meaningful use is e-prescribing. The Centers for Medicare and Medicaid Services (CMS) began cutting bonus checks under the program this year. As part of a penalty phase, the CMS will begin to reduce Medicare reimbursement in 2015 for physicians who fail to become meaningful users of EHRs.

Google Busted for Advertising Illegal Pharmacies

Unnamed sources told the Wall Street Journal that Google is close to settling a U.S. criminal investigation into allegations that the search engine giant raked in hundreds of millions of dollars by displaying ads from online pharmacies selling counterfeit drugs and those not requiring a prescription. The probe is currently trying to determine if Google knowingly accepted the ads and purposely turned a blind eye.

The news arrives after Google disclosed in a cryptic regulatory filing earlier this week that it had set aside $500 million to potentially resolve a case with the Justice Department. Google didn’t go into specific details about the investigation in its filing, only stating that the probe involved “the use of Google advertising by certain advertisers.”

According to insiders close to the matter, the probe has been conducted by the U.S. Attorney’s Office in Rhode Island and the Food and Drug Administration, among other agencies. One major avenue the investigation has taken is into the extent to which Google ignored the alleged illicit activities of various advertisers and how much the executives knew about the situation.

After the FDA began its official investigation back in February 2010, Google decided refuse ads by online pharmacies that weren’t registered by the National Association of Boards of Pharmacy and the Canadian International Pharmacy Association. Then in September 2010, Google filed a lawsuit in San Jose, Calif. seeking to block illegitimate pharmacies from advertising on its serch engine, and to recover any damages caused by these illegal operations.

“Rogue pharmacies are bad for our users, for legitimate online pharmacies and for the entire e-commerce industry—so we are going to keep investing time and money to stop these kinds of harmful practices,” said Google lawyer Michael Zwibelman last September.

Prior to February 2010, Google required that all online pharmacies be verified by PharmacyChecker.com. Unfortunately, numerous rogue pharmacies advertised on Google but never registered with PharmacyChecker despite Google’s policy, and were discovered by the Food and Drug Administration’s office of criminal investigation. The Rhode Island US attorney subpoenaed Gabriel Levitt, vice president of Pharmacychecker, in July 2009 to find out what was going on.

“The U.S. attorney asked me why Google was allowing such rogue sites to advertise,” Levitt said. “I responded that I did not know. I still don’t know. We were never the gatekeeper for Google.”

The investigation is still ongoing, but as sources previously stated, Google is close to a deal. According to the Wall Street Journal, Google co-founder, high-ranking executive and board member Segey Brin ignored questions about the current investigation Wednesday during a conference, acknowledging the current company leader Larry Page.

“Luckily, since we changed roles a few months ago, I don’t have to deal with filings, and the DOJ, the SEC or other acronyms,” Brin said.

Ending drug companies’ addiction to price rises

Drug companies are dosing up on price increases to prop up stagnant sales, but will soon need to break that addiction as more medicines face generic competition.

Industry executives — notably on the pharmacy management and specialty drugs side — told the Reuters Health Summit this week that prices for some drugs have been sharply increased because manufacturers need to make up for a lack of new products and the loss of patent protection on older medicines.

“Prices were just shoved up every year to make more money and meet earnings, to be blunt,” Shire (SHP.L) Chief Executive Angus Russell said.

He was referring to so-called mass market drugs used to treat common conditions like high blood pressure, rather than the specialty products for rare genetic diseases that are Shire’s hallmark.

Payments for two-thirds of the 15 best-selling drugs in the United States rose by double-digit percentage rates last year, according to an analysis of medical claims data by Thomson Reuters MarketScan.

“The industry has been in volume decline for three years — it’s been propped up on price,” said Tim van Biesen, head of Bain & Co’s healthcare practice. “You have to ask how long that can continue.”

He forecast that worldwide sales for the top 25 pharmaceutical companies will be flat for the next five years.

“This is the only industry in the world that has never had to go down the experience curve in cost,” van Biesen said, pointing out that prices for electronics always drop as new technology comes on the market.

According to MarketScan, paid claims for Pfizer’s (PFE.N) Lipitor, which will go off patent in November, rose 11.4 percent last year, compared with 5 percent annually in the previous five years. Drugs with price rises in the mid-teens included: cholesterol drug Crestor made by AstraZeneca (AZN.L); blood-clot preventer Plavix sold by Bristol Myers Squibb (BMY.N) and Sanofi (SASY.PA); and asthma treatment Singulair, from Merck & Co. (MRK.N)

“As their branded drugs approach the patent cliff, there has always been the tendency to see increased pricing toward the end, just to get the last dollar out of every drug before they lose brand protection,” said David Snow, chief executive officer at Medco Health Solutions (MHS.N), one of the nation’s largest managers of prescription drug benefits.

PREMIUM PRICES

When it comes to ground-breaking new medicines, premium pricing is still the order of the day. The trouble for companies like Pfizer, Merck and Sanofi is that they are not producing enough breakthrough treatments.

Swiss drugmaker Novartis (NOVN.VX) set an average annual U.S. price for Gilenya, the first oral treatment for multiple sclerosis, of $48,000 last October — a hefty premium to the price charged for older medicines, which must be injected.

Novartis was able to justify that price, given the new drug’s effectiveness and the fact that it frees patients from injections. But the premium pricing has since been followed by steep price rises for some of the older injectable products.

Drugmakers say the limited lifetime of their brand-name medicines — they will eventually be supplanted by low-cost generics — and high development costs mean they need to bring in as much revenue as possible before patents expire.

Medco’s Snow said other costs, including the 10-year $80 billion excise tax that will be assessed on brand pharmaceutical companies under last year’s U.S. healthcare reform law, are also taken into account.

“If you think for a second they are just going to take their bottom line, hand it over in taxes to the government and not consider it a cost of doing business, then people don’t understand how business works,” he said. “So it does not surprise me we’ve seen an acceleration in price increases to make up — to pay for those taxes.”

Drug companies typically offer hefty discounts and rebates to insurers and government payers, making list prices virtually useless as a tool for tracking drug sales.

“We really don’t have good transparency on pricing in the United States market,” said AstraZeneca CEO David Brennan, while noting that it is one of the few markets where companies can freely raise prices.

Bain’s van Biesen said pharmaceutical companies — barring a major innovation leap — are facing several years of stagnant growth.

“We have observed some really high price increases being taken by other companies in the U.S. … which I just find absolutely incredible,” GlaxoSmithKline (GSK.L) CEO Andrew Witty said on a recent conference call.

“We think it is probably not the right moment for people to be taking crazy price increases. We think ultimately that is going to come back to bite.”

Cardiologists among top users of electronic prescriptions

An estimated 36% of office-based physicians were sending their prescriptions to the pharmacy electronically at the end of 2010, up from 26% the year before, according to a pharmacy-industry group that promotes e-prescribing. Cardiovascular specialists led the way, with 49% of physicians in this specialty “actively e-prescribing,” their report says. Family physicians, internists, and ophthalmologists were also heavy users of e-prescriptions, with between 40% and 50% pushing the “send” button for scrips, the group says.

That organization, called Surescripts, reports these numbers in its annual report for 2010, scheduled for release today. Surescripts’s national data network accounts for the vast majority of electronic prescriptions in the US.

In all, some 190 000 physicians were e-prescribing at the end of 2010. Counting nurse practitioners and physician assistants, the number of e-prescribers stood at 234 000, up from 156 000 at the end of 2009.

Technically, an e-prescription is one transmitted electronically from a prescriber’s computer to a pharmacy’s computer, as opposed to being entered into a computer and then either printed out or faxed to the pharmacy. E-prescriptions include not only new prescriptions but also renewals, which begin with the pharmacy transmitting a request to the provider and the provider responding. Overall, the number of new prescriptions and replies to renewal requests transmitted electronically went from 190 million in 2009 to more than 326 million in 2010, an increase of 72%. By the end of 2010, roughly one in four prescriptions was electronic.

The number of prescription histories electronically delivered to prescribers grew from 81 million in 2009 to 230 million in 2010. And during that same time span, responses to electronic requests—easier than phone requests—for prescription benefit information such as formularies rose from 188 million to 423 million.

Two federal programs pay bonuses to physicians who e-prescribe, and Surescripts says these financial carrots help explain the rising numbers in their annual survey.

Under a 2009 law called the Medicare Improvements for Patients and Providers Act (MIPPA), physicians could receive a 2% Medicare bonus in 2010 if they e-prescribed using approved software. The bonus decreases to 1% in 2011 and 2012 and 0.5% in 2013 and disappears in 2014. Coupling carrot with stick, Medicare introduces a 1% pay-cut penalty in 2012 for physicians who fail to report at least 10 electronic prescriptions in the first six months of 2011 on their Medicare claims. The penalty grows to 1.5% in 2013 and to 2% in 2014.

In addition, the economic stimulus legislation of 2009 called the American Recovery and Reinvestment Act (ARRA) authorizes up to $44 000 under Medicare over five years and almost $64 000 under Medicaid over six years to physicians who demonstrate “meaningful use” of an electronic health record (EHR) system. One criterion of meaningful use is e-prescribing. The Centers for Medicare and Medicaid Services (CMS) began cutting bonus checks under the program this year. As part of a penalty phase, the CMS will begin to reduce Medicare reimbursement in 2015 for physicians who fail to become meaningful users of EHRs.

Google under government investigation for online pharmacy ads

Government officials are investigating whether Google profited by displaying ads from illegal online pharmacies, federal regulators said Thursday.

An explosion of online companies claiming to sell prescription drugs has forced the search giant into what it has called a “cat-and-mouse game” to sort out legitimate retailers from frauds.

Yet it appears Google would still be liable for running ads from so-called rogue pharmacies. The company said in an earnings filing this week that it had set aside $500 million — equivalent to about one-fifth of the profits it made during the last quarter of 2010 — toward a settlement relating to a Justice Department investigation into its advertising practices.

Google and the Justice Department declined to comment Thursday. A spokeswoman for the Food and Drug Administration confirmed an ongoing investigation into the company’s advertising practices.

Google has said that illegal pharmacies have tried to circumvent controls in the tech firm’s powerful platform for selling ads, called AdWords.

The company has had to increase enforcement as ad spending by companies selling drugs has boomed. Healthcare and pharmaceutical companies spent an estimated $1 billion on Internet ads, according to research firm eMarketer, up 13.9 percent from last year. The firm estimates that ad spending will grow another 13 percent this year.

Last September Google filed suit against a group of unnamed defendants for violating the company’s ad sales policies relating to drug sales.

“In recent years, we have noticed a marked increase in the number of rogue pharmacies, as well an increasing sophistication in their methods,” wrote Michael Zwibelman, the company’s litigation counsel, in a blog post on the company’s site at the time of the lawsuit. “This has meant that despite our best efforts — from extensive verification procedures, to automated keyword blocking, to changing our ads policies — a small percentage of pharma ads from these rogue companies is still appearing on Google.”

Online ad sales are Google’s main source of revenue. Its share of the entire online advertising market, estimates eMarketer, is expected to reach 43 percent this year.

As consumers look for cheaper drugs, some industry experts say they are turning to online pharmacies that do not always meet legal standards, sell counterfeits or sell drugs without prescriptions.

“The illicit drug trade by rogue online pharmacies continues to be a huge concern for community pharmacists,” said Kevin Schweers, vice president of public affairs for the National Community Pharmacists Association.

In February, Google beefed up its policing by requiring pharmacies displaying ads to have a specific accreditation known as VIPPS, or Verified Internet Pharmacy Sites. Canadian pharmacies were also newly required to be accredited by the Canadian International Pharmacy Association.

“Google’s policy change is a major step toward ridding the Internet of these operations, and we applaud Google’s commitment to patient safety,” Gary Schnabel, president of the National Association Boards of Pharmacy, said at the time earlier this year.

‘Govt should support pharmaceutical industry’

The government should support the local pharmaceutical industry that earns millions of dollars annually for the country through exports to more than 60 countries. This was stated by the speakers at a seminar held on Friday. The seminar was jointly organised by the Baqai Medical University and Central Drug Laboratories, Ministry of Health.

The theme for the event was to increase the quantity and improve the quality of drugs and pharmaceutical goods.

Senator Abdul Haseeb Khan, President Pharmaceutical Manufacturers Association of Pakistan, Haroon Qasim, Director of Central Drug

Laboratories, M. Tanvir Alam, Head of Baqai Institute of Pharmaceutical Sciences, Prof Shaukat Khalid, Prof Ghulam Mujtaba of Department of Pharmacology, Karachi University, and others addressed the session. The speakers opined that officials must acknowledge the fact that against all odds the local pharmaceutical industry emerged to be the seventh largest export oriented industry in Pakistan.

Senator Abdul Haseeb Khan regretted that lack of coordination among different stakeholders had compromised the efforts made to strengthen the industry.

Haroon Qasim said that health must be incorporated as an undeniable right of the masses in the constitution of the country.

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He was of the view that increased number of qualified pharmacists was extremely essential to maintain check and balance on the drug retailers.

M. Tanvir Alam stated that meeting international standards was a must in the drug manufacturing sector as this was directly linked to precious human lives.

Prof Shaukat Khalid said that institutions imparting education in pharmacy must update the curriculum frequently to get adequately trained human resource.

The seminar was followed by an exhibition of pharmaceutical goods. It was largely visited by students and faculty members of the university.

M’sia expects OECD member status next year

Malaysia has applied to become a member of the Organisation for Economic Co-operation and Development (OECD).

This was disclosed by the Health Ministry’s Pharmaceutical Services Division Senior Director, Dato’ Eisah A. Rahman, Saturday.

Speaking after officially opening the new warehouse-cum-office of Medical Supplies (Sabah) Sdn Bhd at the Makat Industrial Estate, here, she said:

“Hopefully, it will become a reality next year. To attract potential investors to come and invest here in the pharmaceutical industry, we are working very hard to adopt best practices such as Good Laboratory Practice (GLP).

“We have set all the regulatory standards (GMP, GLP and Good Clinical Practice (GCP), for example). So if an investor wants to look for facilities for pre-clinical testing, it is readily available here in Malaysia.”

The OECD is an international economic organisation of 34 nations founded in 1961 to stimulate economic progress and world trade. It is a forum of nations committed to democracy and the market economy, providing a setting to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policies.

Eisah, who represented Deputy Health Minister, Datuk Rosnah Hj Abdul Rashid Shirlin, also said Malaysia is on track for full liberalisation of trade in the pharmacy sector by 2015.

“We are ready for liberalisation as we have been giving emphasis to high standards and good practices. Internationally, we have actually put ourselves on a very high standing.

“Our local pharmaceutical manufacturers are in compliance with international regulatory standard in terms of Good Manufacturing Practice (GMP),” she told a press conference.

The Ministry has also imposed the Good Distribution Practice (GDP) on wholesalers and warehouse operators.

“This is in line with the latest World Health Organisation (WHO) requirements.” Eisah said Malaysia’s liberalisation of the pharmacy sector had taken place in stages since 1985.

“Implementation is of course gradual, step by step, phase by phase.

As far as Good Manufacturing Practice (GMP) is concerned, we became a member of the Pharmaceutical Inspection Co-operation Scheme (PICS) in January 2002.”

Asked how membership in PICS has benefited the local pharmaceutical industry, the Senior Director said there is mutual co-operation in terms of GMP with other PICS member countries.

“Today we have over 30 member countries and Malaysia became the 26th just behind Singapore. But we still hold the record because we became a member in the shortest time.” Malaysia is exporting quality pharmaceutical products to over 30 countries.

“Of course, some countries such as Australia have imposed inspections on our GMP facilities here.

Pharmaceutical companies are ready for such inspections.

“If you are brave enough to export your products to potential markets, you must be ready to accept them for inspection of your premises,” Eisah said matter-of-factly.

“After all, our standards are high and our regulatory system is very much recognised by the World Health Organisation (WHO).”

She said PICS view Malaysia as an emerging country able to comply with international regulatory standards. “This is very encouraging and why our local pharmaceutical manufacturers are able to export their products to over 30 countries.”

States vs. data collectors at the Supreme Court

When a doctor writes a prescription and the patient has a pharmacist fill it, the transaction generates information companies have increasingly sought out, compiled and sold to drug manufacturers.

What often happens next, say Vermont officials trying to block disclosure of prescription records, is that “doctors’ names and prescribing habits travel from pharmacy records to the laptop computers of pharmaceutical sales representatives.”

Those sales reps, Vermont Attorney General William Sorrell tells the Supreme Court in a case to be argued Tuesday, show up at doctors’ offices armed with a marketing strategy, samples and gifts, intended to persuade doctors to switch patients to new and expensive drugs.

That scenario, counters Randy Frankel, a vice president at IMS Health, challenging Vermont’s law restricting this data, is “an attempt to show a darker side to the process.” Frankel stresses that patients would suffer if pharmaceutical companies could not track and market to physicians whose patients most need new medications. Information in the hands of those sales reps, Frankel says, can get new drugs for Alzheimer’s and other diseases to the doctors who treat those diseases.

Vermont’s law, similar to measures in Maine and New Hampshire, prohibits pharmacies from selling prescription information for drug marketing without a physician’s consent. The U.S. Court of Appeals for the 2nd Circuit declared the law an unconstitutional restriction on commercial speech. (A separate U.S. appeals court upheld the similar New Hampshire law. )

The Supreme Court case pitting states against data collectors and the drug industry comes at a time of national concern about escalating medical costs.

Vermont officials say its measure was intended to protect the doctor-patient relationship and ensure patients are not unnecessarily steered to brand-name drugs over generics. They say there is no First Amendment right to information pharmacies collect under state and federal drug regulations.

The challengers, IMS Health and, separately, the Pharmaceutical Research and Manufacturers of America, counter that not only do private companies have a free speech right to use the information but that making it available enhances drugmakers’ ability to swiftly pass on medical breakthroughs to the doctors and patients who need them.

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Vermont’s law traces back to 2006 when members of the Vermont Medical Society, attending a meeting in New Hampshire, heard from physicians there that pharmacies were selling records to pharmaceutical companies. Until then, says Paul Harrington, executive vice president of the Vermont society, “physicians were completely unaware that pharmaceutical companies had access to this information when they were coming to the physicians’ offices.” He said doctors had two concerns: that their private relationships with patients could be breached and that the information could be used to promote more expensive drugs, driving up the overall costs for all patients.

At the Vermont Medical Society’s urging, the state Legislature in 2007 passed the law prohibiting pharmacies from selling the records for drug-marketing purposes without the physician’s consent. The information includes the name of the physician, the patient’s age and sex, the type and strength of each drug and the date and locale of prescription. Though patients’ names are encrypted, pharmaceutical companies are able to track the types of patients seen and prescribing patterns.

When the appeals court invalidated the law, it said that concerns about doctor-patient privacy were “speculative” and that Vermont had other ways to hold down health care costs without infringing on speech, such as by requiring generic drugs as a first course of treatment for patients on Medicare.

In the state’s appeal, Assistant Attorney General Bridget Asay, who will argue the case Tuesday, says, “Pharmacies have this prescription information only by virtue of government regulation. They do not have an unfettered right to sell or use it for purposes unrelated to the patient’s care.”

The U.S. Department of Justice, backing the state, agrees in a court filing: “There is no First Amendment right to obtain information that is in private possession solely as a result of such governmental regulation.” Justice Department lawyers add that drugmakers “spend nearly $8 billion each year on marketing efforts directed at doctors” and limiting the use of data would lower spending on prescription drugs without harming public health.

Lawyers for IMS Health say Vermont’s law wrongly restricts “truthful speech” on a matter of public concern, such as the health benefits of particular drugs.

Asked about physicians’ privacy assertions, Thomas Goldstein, who will argue for the challengers Tuesday, said, “When it enacted the law, Vermont admitted its purpose was to keep information about drugs out of doctor’s hands, not improve the doctor-patient relationship. Doctors are always free not to visit with drug representatives, and many do. And none of this information contains any information about individual patients.”

Asia Pacific Institute of Management sets Seven State-of-the-Art Technical Education Institutions in Lucknow

After running the institute successfully in the Delhi region, Asia Pacific Institute of Management is now setting up another unique ‘Green’ project in Lucknow, UP in a site of 40 Acres with a total built up area of 12, 82, 000 sq ft which consists of 2 Engineering colleges, 2 MBA Colleges, 1 Architectural college, 1 pharmacy college, 1 B. Ed. College- all planned together as one integrated campus. Asia Pacific Institute of Management held a press conference at Chand Sarai, Gosaiganj, Lucknow, stating that it would be designed as a ‘Green Campus’.

Mr. AK Shrivastava, Chairman, Asia Pacific Institute of Management, said, “The movement towards a global economy and unprecedented economic and technological changes has given rise to great opportunities for developing newer methodologies in the field of management. With companies’ growing awareness of increasing opportunities as well as competitive threats, they are looking for management graduates, who with their fresh insights and innovative ideas can develop strategies for sustainable growth. Asia-Pacific Institute of Management (AIM) at New Delhi contributes to this challenging situation by providing cutting edge knowledge to its students.”

He added, “I look forward to welcoming you all to join us in our journey towards exploring new frontiers in global business management. On our part, we at our Delhi and upcoming Lucknow campuses will strive to enhance our contribution.”

Dr. Manas Das, Director, Asia Pacific Institute of Management, said, “Asia-Pacific Institute of Management, New Delhi, a premier institution imparting business education, following this same principle of minimum necessary expansion and diversification in related areas, decided to set up its Lucknow campus. In addition to two institutes each in engineering and management, the Lucknow campus will also have institutes of education, pharmacy and architecture.

Dr. Manas Das said, “Demands on management institutes are increasing over a period of time. This is because management is a science of application of knowledge. Most sectors of our economy, like agriculture, forestry, food processing, manufacturing, mining, education and higher education, are under-managed, and hence a big requirement of manpower equipped with management education.”

Dr. Manas Das said, “Given the above background, diversification of the Asia-Pacific Institute of Management into several related disciplines under the umbrella of the Asia-Pacific Group of Institutions is extremely opportune and timely. Time will prove it.”

Asia Pacific Institute of Management, New Delhi established in 1996, under the aegis of All India Educational Foundation, is amongst the top Business schools in India, having highly experienced faculty and world class infrastructure.

Notes to Editor

Asia-Pacific Institute of Management is ranked amongst the top Business Schools in the country. Established in 1996, the Institute has achieved a status of distinction by following the path envisioned by its founders.

Their passion for supreme quality management education is evident in every endeavor undertaken at the institute. Asia-Pacific is proud of its faculty consisting of dedicated thought leaders, an infrastructure that can compete with the best and a curriculum that is upgraded regularly to keep in tune with industry needs. Concerted effort on the part of the management, the faculty and the staff enables Asia-Pacific to groom business leaders capable of contributing towards a global corporate order.

A robust interface with Industry is ensured through guest lectures, industry visits and industry training opportunities. A symbiotic relationship is encouraged between the industry and the academia through a mutual exchange of practical and theoretical aspects of management knowledge.

Supreme Court Weighs Whether To Limit Data Mining

At the U.S. Supreme Court Tuesday, the justices for the first time will hear a case that tests what limits the government may put on data mining for commercial purposes. At issue is whether a state may bar the buying, selling, and profiling of doctors’ prescription records for use by pharmaceutical sales representatives.

Under federal and state law, pharmacies are required to keep records of every doctor’s prescription, and while patient privacy is protected by federal law, doctor privacy is not.

Pharmacies can and do sell prescription information to data miners, who in turn aggregate it to show each doctor’s name, the number of prescriptions written for each drug, prescriptions for similar drugs, and changes from one drug to another. The data miners then sell that information to drug manufacturers, to help sales representatives target doctors for sales pitches and try to get them to prescribe, for example, a brand name instead of a generic.

Until relatively recently, doctors did not know this was happening, according to Paula Duncan, president of the Vermont Medical Society. She says that Vermont doctors were “very surprised” to learn that their prescription patterns could be so easily identified and sold.

So the medical society went to the state legislature to “[make] sure that the privacy of the physician-patient relationship was really kept intact and free from other influences.”

The state enacted a law that bars the selling and buying of prescription information without a doctor’s consent. Under the law, doctors must fill out a form as a part of their license renewal application, which indicates whether they agree to have their prescription information sold for marketing purposes.

Data miners, backed by the pharmaceutical industry, immediately challenged the law in court, and won. The state then appealed to the Supreme Court, which hears arguments in the case on Tuesday.

The Two Arguments

The data miners will tell the justices that the law unconstitutionally impedes free speech. “Vermont can’t try and keep information out of the hands of doctors and nurse practitioners that’s truthful and incredibly important about the health and safety of prescription drugs,” says the industry’s lawyer, Thomas Goldstein.

But Vermont counters that its law stops no one from speaking. Assistant Attorney General Bridget Asay will tell the justices that the state’s law “doesn’t do anything to stop pharmaceutical manufacturers from sending their salespeople to doctors” or from telling doctors “why they think their products are better, or are more effective, or worth the money.”

This isn’t a case about the right of free speech, she says. It’s about “whether doctors have a right to control the use of their prescribing information against an unwanted marketing practice.”

Goldstein counters that there is more at stake here because the state allows insurers and its own Medicaid managers to have access to prescribing information, while barring the same information from data miners and pharmaceutical manufacturers. The Constitution, he maintains, does not allow the state to “play favorites in this way.”

“Vermont can and does encourage doctors to use generics,” says Goldstein. “But what it can’t do is at the same time tie the hands of the people who want to convey the opposite message.”

But Asay replies that insurers and state Medicaid managers do not buy their information from pharmacies and data vendors. She says they get the information directly from doctors and patients as part of managing benefits.

The pharmaceutical industry, with an army of thousands of salespeople, spends at least $8 billion each year marketing drugs in person to doctors. It is a system that has proven highly resistant to change, despite criticism from experts such as Philip Pizzo, dean of Stanford University School of Medicine.

“Given today’s information technology there is no reason why information about new drugs, side effects or drugs in general needs to come from marketing reps,” Pizzo said during a 2006 discussion of medical ethics at the Cleveland Clinic. And Roy Vagelos, a former CEO of Merck, said that his attempts to use technology for marketing to doctors had failed, largely because of opposition from the very sales reps who make their living selling pharmaceuticals to doctors.

Larger Implications

Tuesday’s case, however, extends far beyond the pharmaceutical industry, with larger implications for the data mining industry and for consumers in general.

Lawyer Goldstein describes the issue from the industry perspective, arguing that “if Vermont is right that the collection and manipulation of data isn’t free speech, then the government can regulate it however it wants.” He says that even data mining for non-marketing purposes, such as news reporting and analysis, could be in danger.

But Vermont’s Asay takes the opposite view. If the Supreme Court says a pharmacy has a First Amendment right to sell the information it collects from its patients and doctors, she says, “that ruling would extend … to other businesses that also collect personal information from consumers, like banks and other financial institutions, other health care organizations, tracking on the Internet, and credit card purchasing information.”

Indeed, there are countless companies that collect and sell consumers’ personal information, and Tuesday’s Supreme Court case is the first to test the limits of that practice.

RelayHealth Launches First On-Demand Pharmacy Claims Adjudication Reporting Solution to Deliver Payer Savings and Improved Customer Service

-RelayHealth, a leading provider of healthcare connectivity services, and its Prospective Health Services business unit, today announced the general availability of ProSMARTTM, the healthcare industry’s first on-demand pharmacy claims adjudication reporting solution for payers. Restat, the nation’s largest independent PBM (pharmacy benefits manager), will deploy ProSMART to ensure accurate member documentation, optimize adjudication rule configurations and provide superior customer service to retail pharmacies.

“As long-time customers of RelayHealth, we appreciate their continued commitment to the development of innovative, automated pharmacy benefits management tools that drive customer service improvements while achieving elusive time and cost savings.”

“ProSMART will give Restat instant access to comprehensive claims adjudication reports – the required information for fast and accurate resolution of pharmacy claims transaction queries. Until now, this instant access to claims adjudication reports was not available in the industry,” said John Bergan, chief operating officer of Restat. “As long-time customers of RelayHealth, we appreciate their continued commitment to the development of innovative, automated pharmacy benefits management tools that drive customer service improvements while achieving elusive time and cost savings.”

Payers typically spend hours in claims adjudication rules research while still risking incorrect assumptions due to incomplete adjudication information. With RelayHealth’s ProSMART, the latest addition to the ProPBM platform, payers can generate a step-by-step trail of the claims’ course through the ProPBMSM application, gaining immediate insight into the benefits and rules configurations that affect the final claims outcome for rapid pharmacy query resolution, as well as optimization of adjudication rule configurations.

“RelayHealth’s Prospective Health Services developed ProSMART to address the increasing complexities and frequent changes in pharmacy benefits management plans, including Medicare Part D claims,” said Jeff Felton, president of RelayHealth Pharmacy Solutions. “For example, when a pharmacist calls to ask why a patient’s co-pay didn’t apply to a given prescription, the payer customer service representative can quickly run a ProSMART claims adjudication report, resolving the pharmacy query in minutes – exceeding customer expectations while positively having an impact on payers’ bottom lines.”

RelayHealth Prospective Health Services is an integral part of RelayHealth Pharmacy Solutions. Prospective Health Services’ platform combines transaction processing and rule-driven clinical and business strategies with testing, reporting, and financial systems to deliver innovative benefit management solutions that bring reliable online, real-time transaction processing to payer organizations. The business unit primarily serves as an expert knowledge partner providing the information technologies and data tools that payer organizations need to provide members with premier, cost-effective, high-quality healthcare coverage. Prospective Health Services’ proprietary benefit management systems are in use throughout the country and internationally. Annually the systems manage pharmacy benefits for more than 100 million members, and process over 550 million transactions.

UAE: GMU Students pay a onsite visit to Global Pharma, Dubai Investment Park!

Pharmaceutical Technology is one of the courses taught in Level 6 of the Pharma D Program. To gain valuable exposure to pharmaceutical plant design and various unit operations in the pharmaceutical industry, 14 students along with Dr. Arun Shirwaikar, Dean, College of Pharmacy and Dr. Mona Hassan, Lecturer , College of Pharmacy from Gulf Medical University, Ajman paid an onsite visit to Global Pharma, Dubai Investment Park, Dubai.

The objective of their study was to gain insight and knowledge about the design and layout of pharmaceutical industry, to familiarize the students with the importance of quality assurance and good manufacturing practice in pharmaceutical operations, to gain exposure in various operations, viz: size reduction, mixing, granulation, drying, compression, capsule filling etc., to understand the important packaging techniques used for different dosage forms.

During the onsite visit the students gained immense knowledge on the pharmaceutical operations which goes a long way to help them in their studies in Level 6 of the Pharma D Program.

Mr. Ejaz Shahid, Quality Assurance Manager of Global Pharma, Dubai supported the visit by assisting the students and the faculty throughout the onsite tour.

Scientists uncover how immune system responds to invading anthrax bacteria

Scientists at the University of California, San Diego School of Medicine and Skaggs School of Pharmacy and Pharmaceutical Sciences have uncovered how the body’s immune system launches its survival response to the notorious and deadly bacterium anthrax. The findings, reported online today and published in the June 22 issue of the journal Immunity, describe key emergency signals the body sends out when challenged by a life-threatening infection.

Exposure to anthrax often proves deadly. The anthrax bacterium can invade immune cells called macrophages and release potent toxins that paralyze key biochemical pathways, causing rapid cell death. Unchecked, the process may completely collapse the body’s immune defenses, allowing the bacteria to proliferate, and ultimately lead to septic shock and high mortality.

The researchers discovered that the fight against invading anthrax bacteria begins with the first infected cell. They found that initially impacted macrophages immediately communicate with other immune cells to sound the alarm and develop a survival strategy. Remarkably, the key signaling molecule involved in the survival response is adenosine triphosphate or ATP, a basic currency of energy transfer used by all organisms.

“The warning alarm sounded during anthrax infection is elegant, complex and can be effective in slowing spread of the pathogen,” said Michael Karin, PhD, distinguished professor of pharmacology and senior author of the study.

Karin explained that ATP is released from macrophages infected and poisoned with anthrax toxins through a special channel in the cell membrane. This ATP is then sensed by a receptor on a second macrophage, which assembles and activates a complex of molecules known as the inflammasome. The inflammasome then releases into the bloodstream an immune-activating molecule known as interleukin-1beta (IL-1beta), which alerts macrophages throughout the body to mobilize and increase their resistance to anthrax-induced cell death.

Researchers confirmed the importance of this complex signal transduction pathway in fighting anthrax in a series of experiments using genetically altered mice or inhibitor drugs. Whenever the researchers interfered with the ATP channel, the ATP receptor, inflammasome proteins or the IL-1beta molecule, they found that the macrophages could not survive, anthrax bacteria grew unchecked or the infected mouse died rapidly. They also noted that the immune response pathway responded only to the most dangerous bacterial pathogens. Infections using a mutant anthrax bacterium lacking the deadly toxins did not set off the alarm system in test animals.

“We hope these findings can be exploited for the design of new treatments to help the body combat serious bacterial pathogens,” said Victor Nizet, MD, professor of pediatrics and pharmacy, whose infectious disease research laboratory contributed to the study. “Supporting the survival of macrophages and preserving their immune function may buy patients precious time until antibiotic therapy is brought on board to clear the infection.”

CAQH partnership focuses on synchronizing med, pharmacy e-transaction rules

The National Council for Prescription Drug Programs (NCPDP) and the Council for Affordable Quality Healthcare’s Committee on Operating Rules for Information Exchange (CAQH CORE) have agreed to collaborate on activities related to harmonizing electronic data interchange standards and operating rules across the healthcare industry. The two organizations, which have been working together informally for several years, made this formal agreement to simplify administrative transactions for providers and patients and to meet the goals of the Patient Protection and Affordable Care Act (PPACA) in this area.

The Department of Health and Human Services (HHS) has asked the National Committee on Vital and Health Statistics (NCVHS), a government advisory body, to make recommendations that will enable HHS to implement the administrative simplification provisions of the ACA. In turn, NCVHS has tasked NCPDP with providing operating rules for pharmacy transactions and CORE–which represents health plans and other industry stakeholders–with devising operating rules for non-pharmacy transactions. The rules apply to areas such as eligibility, claims status, electronic funds transfer, and electronic remittance advice.

In an interview with FierceHealthIT, Gwendolyn Lohse, deputy director and CORE managing director at CAQH, notes that NCVHS expects CORE to deliver a set of operating rules for payment and remittance by Aug. 1 of this year. “Those rules will address how the medical and the pharmacy [payment systems] collaborate and reference one another,” she says. After going through a government rulemaking and comment process, she adds, the operating rules must be ready for industrywide use by July 2012.

As they develop their own sets of rules, CORE and NCPDP will look ahead to see where they need to be harmonized, Lohse points out. Examples of areas that may require collaboration include:
Payment enrollment: Whether providers elect to receive payment by check, EFT, or some other method, the medical and pharmacy industries will discuss how to make this easier. “For instance, if providers enroll for payments that have both pharmacy and medical included, how can we coordinate that?” Lohse asks. This already occurs, she notes, in the oncology field.
Denial codes: With over 100 of these codes in use, NCPDP and CORE are discussing the possibility of harmonizing frequently used codes to make it easier for the end user to deal with them.
Billing over the Internet: Medical and pharmacy groups could agree on common digital certificates in line with the efforts of the Office of the National Coordinator for Health IT to improve online security.
Shared milestones: CORE and NCPDP should adopt rule changes in a coordinated way so that, Lohse says, “when we move to a fully electronic system, we’re not setting up so many variations in how security works, or in how approaches to simplification work, that we actually cause more confusion [among end users and patients].”

Online MHT CET results out, Pune division students fare badly

The online results for MHT CET 2011 were declared at 10 am on Tuesday. Over three lakh students had appeared for the combined entrance examination for medical, engineering and pharmacy on May 12. Admission process for autonomous as well as other engineering and pharmacy colleges will begin on June 21.

Directorate of Technical Education said 2.98 lakh students appeared for the test, out of which 2.5 lakh were for engineering. While a total of 37 students secured 190 plus marks, performance of Pune division was not satisfactory as only four students secured more than 190, a press note said.

With 19 state government-aided colleges with an intake capacity of 5,768 students and 290 unaided colleges that can accommodate 1,08,500 students, the state has a total capacity to train 1,14,268 students for engineering. The number is 9,170 in case of Pharmacy. The intake is expected to increase for the year 2011-12.