Monthly Archives: December 2012

Super resolution microscopy for pharmaceutical industry: Patents granted for 3D complex labeling

Mechanism of action of drugs in body cells becomes transparent – the LIMON 3D microscopy (LIght MicroscOpical Nanosizing) of Prof. Dr. Dr. Christoph Cremer opens new possibilities for pharmaceutical research. 3D molecular complexes so-called biomolecular machines, targets of drugs can thus be studied in vivo.
“By means of these issued patents, our super resolution microscopy is especially important for molecular biotechnology and the pharmaceutical industry, with emphasis on target identification and personalized medicine,” according to Dr. Andrea Nestl, innovation manager of the Technology Licensing Office (TLB) and responsible for the patent management and the commercialization.
Biomolecular machines (BMM) are highly complex nanostructures consisting of several large molecules and which are responsible for basic functions in the body cells. Depending on their functional status they have a defined 3D structure. Examples of biomolecular machines are nucleosomes which enable the DNA, a two meter long carrier of genetic information, to fold in the body cells in a space of a few millionth of a millimeter in diameter only. Therefore, the DNA can serve as an information and control center.

By using Professor Christoph Cremer`s LIMON 3D in combination with LIMON complex labeling it is possible for the first time to make hidden proteins or nucleic acids of a 3D-molecule complex of the so-called biomolecular machines visible without destroying the complex. Up to now, the problem in most cases was that the complex had to be destroyed for detailed analysis of the individual macromolecules therein. Alternatively, virtual computer simulation models or expensive nuclear magnetic resonance methods were used to visualize the three-dimensional structure of such complexes.
The issued LIMON patent family allows the identification and the spatial positioning of individual components of the complex in its original native i.e. in a biologically relevant composition.
Besides the usual labeling of a macromolecule with a single fluorescent molecule, LIMON offers the option to label the target molecule with a variety of fluorescent markers of the same type in order to highlight several different areas. This is especially important for the investigation of such complexes in which not all binding sites for labeling probes are accessible, and thus it is difficult to visualize the individual partners.
“The pharmaceutical industry can trace in this way the interactions of biomolecular machines with pharmaceutically active compounds specifically and answer fundamental mechanistic questions about drugs”, according to Dr. Andrea Nestl, responsible for the development of patenting and marketing strategy on behalf of the University of Heidelberg. The mechanism of drug action in the cells becomes thus transparent, and the expensive development of drugs, which reaches the region from 500 million up to 2 billion U.S. dollars and usually lasts for 10 to 12 years, can take place in less time, and additionally, it is less cost-intensive.
The 3D Super Resolution Microscopy LIMON is an excellent tool for the development and validation of therapeutically active substances. As an example for the importance in pharmaceutical industry by using LIMON, it was possible for the first time to investigate in detail the gene product which is responsible for 20 percent of inherited metastatic breast cancer. The aim is the patient-specific optimization of the existing Herceptin therapies.
Due to individual genetic equipment patients with an identical diagnosis often respond very differently to treatment with the same medicine. Personalized medicine considers and takes into account all diagnostic possibilities for characterizing the personal particularities. Thus the Super Resolution Microscopy LIMON patents will offer a significant contribution. The results of this breast cancer study were recently published in the notable Journal of Microscopy (“Analysis of Her2/neu membrane protein clusters in different types of breast cancer cells using localization microscopy”).
To realize the 3D LIMON Super Resolution Microscopy Professor Christoph Cremer combines two of his 2D Super Resolution Microscopy methods: the localization microscopy SPDM (Spectral Precision Distance Microscopy) and the structured illumination SMI (Spatially Modulated Illumination), both patented by TLB as well. The main LIMON patents are issued in Europe and in the USA. With this European divisional patent application the third member of the LIMON patent family is being granted.
Christoph Cremer is full Professor and Chair of Applied Optics and Information Processing at the Kirchhoff Institute of Physics, and the Institute of Pharmacy and Molecular Biotechnology (IPMB), both at the University of Heidelberg, and he is group leader in the field of Super Resolution Microscopy at the Institute of Molecular Biology gGmbH (IMB) at the University of Mainz. In addition he is scientific member of the US-American Jackson Laboratory in Bar Harbor / Maine.
Professor Christoph Cremer is longtime coordinator of the BMM-network “Biomolecular Machines / Biomolecular microscopy” of the Rhine-Neckar bioregion, where numerous working groups in Heidelberg participated in the in the fields of medicine, mathematics / computer science, chemistry, pharmacy, physics and biology. Objective target is the quantitative analysis and modeling of “biomolecular machines” outside the cell and within the living cell itself.

Pharmaceutical Industry at a Cross Roads

The pharmaceutical (pharma) industry, once a thriving sector, has been cutting costs right and left by closing plants, laying off people, outsourcing jobs to third-world countries, and reducing research efforts to the minimum.

“The good old days of the pharmaceutical industry are gone forever. Even an improved global economic climate is unlikely to halt efforts by the developed world’s governments to contain spending on drugs,” according to a December McKinsey Quarterly report, a business journal published by McKinsey & Company.

Despite a strong third quarter financial performance, Novartis International AG, a Swiss-based pharmaceutical giant, announced that it is closing down three of its subsidiaries, resulting in the layoff of 2,000 people. About 35 percent of the jobs will be outsourced to China and India, according to a conference call.

“Novartis is announcing today additional cost reduction activity, which will be executed over three to five years … resulting in closure of two sites in Switzerland and one in Italy. … In total, approximately 2,000 positions will be reduced in the Group … mostly in Switzerland and the US offset by 700 new positions in low cost and other countries,” according to a Novartis press release.

During the third quarter, net sales had increased by 18 percent to $14.8 billion compared to the same time period in 2010. Net income increased by 7 percent to $2.5 billion.

Global giant AstraZeneca, based in London and the world’s seventh-largest pharmaceutical company in terms of revenue, announced in December that it would reduce its U.S. sales force by 1,150 people, about 24 percent of their U.S. sales force, by February 2012.

Cost reduction efforts, including the above reduction in force, saved the company between $50 million and $100 million, resulting in a third quarter profit of $3 billion, an increase of 36 percent over the third quarter 2010 numbers.

Rich Fante, president of AstraZeneca U.S., said in a recent press release, “These are difficult decisions that impact valued employees. The changes we are making, however, will help us deliver better results for our business and, most importantly, continue delivering on our mission of patient health.”

Global Pharmaceutical Firms’ Business Model Flawed

“Profit margins will be substantially lower than they are today. This dramatic situation requires Big Pharma executives to envision responses that go well beyond simply tinkering with the cost base or falling back on mergers and acquisitions,” the McKinsey report advised.

Despite total global 2010 drug sales of $856 billion, the pharmaceutical industry is distressed, given that the industry has not produced a blockbuster drug over the past years. New drugs are just improved copies of existing drugs.

Drug development history suggests that out of 10,000 drugs under development only one or two will hit the market big time, and that each one will take between 10 to 15 years to be developed. Although development costs are hard to assess, suggestions are that it costs more than $1 billion to develop a new drug.

In 2011, there were around 3,000 medicines being tested in clinical trials and/or awaiting Food and Drug Administration evaluation.

Most importantly, the industry is facing the expiration of a large portion of patents, such as Plavix (Bristol-Myers Squibb) and Zyprexa (Eli Lilly & Co.), resulting in the loss of revenue-producing income. Generic drug manufacturers are lurking around the corner and probably already have cheaper generic drugs waiting, which will be sold the day the patents expire.

“The next five years are expected to reflect a significant imbalance between new product introductions and patent losses,” suggested an article on the Zacks Investment Research website.

In response to large corporate inflexibility and bureaucratic environments, the industry has begun to fragment into different segments, including generic, biotech, life-sciences, health-care equipment, and midsize pharma companies.

From 84 companies in 1989, the industry has grown to 192 companies, with 51 midsize pharma and 51 health-care equipment firms being the majority of firms.

“Fragmentation is especially troubling for Big Pharma because it would be natural to expect that economic rents will accrue to an industry’s most innovative companies. Since some Big Pharma players can’t deliver innovations as quickly as biotech players can, only brand strength and a global commercial footprint would allow it to go on charging premium prices,” according to the McKinsey article.

Furthermore, unbridled research and development (R&D) spending are a sore point for investors, who have become vocal as such activities cut into their dividends and just don’t bring value to the investor.

Analysts have been especially honing in on the pharma industry and suggest that most growth will no longer happen in the large global companies, but will be found in the small and midsized firms that have sprung up over the past few years. Most importantly, the best results would be achieved when the industry players work collaboratively in the development of new drugs instead of going at it alone.

Scripts-Walgreen dispute forces consumer switch

With less than two weeks left before Walgreen’s contract with Express Scripts expires, can the two corporate giants resolve their differences?

If not, tens of thousands of consumers relying on Express Scripts Inc. – one of the nation’s largest pharmacy benefit managers – are likely to switch pharmacies and fill prescriptions at a location other than Walgreens, the nation’s largest drugstore chain.

Walgreen Co. broke off talks with Express Scripts on June 21, saying Express Scripts had offered a 3-year contract that would have cut reimbursement rates to below the industry’s average cost to fill prescriptions. Express Scripts – which manages prescription benefits for large employers, insurers and the Defense Department – says Walgreen has proposed dispensing rates that would eventually put the drug chain at about 20 percent above the rate paid to other contracted pharmacies.

The sides now remain at loggerheads.

“We would welcome them back to the table at any time to negotiate,” said Express Scripts spokesman Thom Gross. “We would love to have them back in the network if their prices are competitive to other prices.”

Michael Polzin, a Walgreen vice president, responded: “We’ve said all along, if Express Scripts presented us a fair and competitive offer, then we would certainly be willing to consider it….We are still planning to be out of their network as of Jan. 1.”

Some consumers say they are at the mercy of the health insurance and pharmacy titans.

“It certainly seems like several local health care players are throwing their weight around….It is hitting the consumer,” said Dolores Dace, an elementary school teacher who lives in Florissant, Mo.

If she changes pharmacies, Dace said, she’ll need to switch from a Walgreens that’s nearby and open until 10 p.m. to either a supermarket or independent that is up to three miles away.

Meanwhile, operators of chain discounters such as Wal-Mart and Target have posted signs welcoming new customers. In addition to Walgreen’s most obvious local competitor, CVS, prescriptions can be filled by smaller pharmacies and specialty pharmacies along with grocery stores and warehouse stores like Costco and Sam’s Club.

Meanwhile, Express Scripts, based in north St. Louis County, Mo., downplays the significance of the switch for consumers. If Walgreen leaves Express Scripts, “we’ll still have 56,000 (pharmacies) in our network,” Gross said. “On average, there’s one pharmacy in our network within one-half mile of any Walgreens. And over 90 percent of independent pharmacies are in our network.”

Walgreen Co., based in Deerfield, Ill., has about 7,800 stores nationwide, including 6,600 drive-through pharmacies nationwide.

TIPS FOR SWITCHING PHARMACIES:

Customers can switch their retail pharmacy by taking one of these steps:

— Take a pill bottle or a prescription to a new pharmacy of your choice. The pharmacist will call to verify the information with your physician or current pharmacy.

— Phone your current pharmacist and request that your prescription information be transferred.

— Phone your physician’s office and ask that your prescription records be sent to a new pharmacy.

Insight: Pharma asks the money question earlier for new drugs

Pasteris is one of 25 executives appointed last year to shepherd the British drugmaker’s experimental medicines. He consults insurance companies and former officials from national health agencies about the Alzheimer’s drug on the best way to show its value to patients.

In the past, that meant proving that a drug worked, and did so safely, so that health regulators would approve it. But as governments in the United States and Europe look to slash spending and avert a debt crisis, Glaxo and its rivals want to make sure their medicines are a must-have for patients.

To do it, they are seeking input from the people who hold the purse strings earlier than ever in the clinical research process, in some cases five years or more before regulators would even look at a product, executives told Reuters.

“The ultimate goal was not optimal reimbursement and access,” Pasteris said. “Today it is.”

These views are shaping more clinical trials, such as which products to test against and study goals to pursue. And that’s having major ramifications for the business of Big Pharma.

“If you’re going to go out there with a drug that you don’t know whether it’s better than what’s out there, what are you trying to do? Who are we all trying to kid?” said Angus Russell, CEO of British drugmaker Shire Plc. His company has more than doubled its “pharmaco-economic” staff focusing on the value of medicine in the past few years.

Russell said companies “all over the industry” are dropping experimental products they fear will not gain strong reimbursement. For example, Glaxo abandoned a diabetes treatment in mid-stage development in 2009.

Pharmaceutical investors are also a huge source of pressure, with little forgiveness on Wall Street when it comes to medicines that cost hundreds of millions of dollars to develop, but do not get widely used once they reach the market.

Even smaller players are changing their ways. Ron Cohen, CEO of Acorda Therapeutics, regrets not consulting insurers early about its Ampyra, the first drug to help multiple sclerosis patients walk better.

Now, Acorda plans to hold discussions with health insurers once products reach mid-stage development and is getting informal input earlier — including for a potential multiple sclerosis treatment yet to enter human testing.

“I have no question that the entire industry is moving toward this sort of model,” Cohen said.

As drug manufacturers invite marketing input earlier than before, some fear they risk the very innovation that leads to landmark new medicines.

Industry experts point to advances that took time to prove their worth or worry that drugmakers may abandon categories where “good enough” medicines already exist, like depression, partly because it’s not worth the economic risk.

“There is a concern that in five, 10 years we won’t have anything really new for patients with major mental illnesses, and that would be absolutely a tragedy,” said Dr. Alan Schatzberg, former president of the American Psychiatric Association. “It’s an unfortunate outcome that we are slowing drug development.”

Glaxo, which brought antidepressants Paxil and Wellbutrin to market, is one company to pull away from the field. Atul Pande, who leads Glaxo’s neuroscience research, says the science has not advanced enough to identify new ways to significantly improve treatment, but he acknowledged the reimbursement fears.

CLOSER TIES

In this climate of soaring healthcare costs, the drug industry has been sharply criticized for launching expensive new medicines that proved only slightly better than their predecessors. Health insurers and government agencies pushed back, and now drug companies are forging closer ties with those “payors”.

This year alone, Pfizer Inc allied with insurer Humana Inc to research elderly health; AstraZeneca Plc and HealthCore, a unit of insurer WellPoint Inc, agreed to study how to economically treat disease; and Sanofi SA signed on pharmacy benefit manager Medco Health Solutions Inc.

Sanofi may soon overtake Pfizer as the world’s top drugmaker. CEO Chris Viehbacher says the industry’s new crop of drugs must demonstrate “why is this better than what we’ve already got.”

“In defining value — in whose eyes? So you need a payor perspective,” he said.

A closer relationship to payors allows access to vast databases of medical claims to see how drugs are used once they are approved. Drugmakers can learn which medicines they should be comparing their own products to and what goals they should seek in clinical trials.

That can help demonstrate the value of new treatments over a growing pool of cheaper generic drugs. For example, instead of testing a drug just to show whether it lowered blood pressure, the manufacturer could also show that it helped reduce stroke rates or hospitalizations.

Medco, which manages prescription benefits for millions of Americans, is discussing Sanofi’s drugs in their initial human trials.

“We’re there at late Phase I, stress-testing their entire development program, and it’s a very rich conversation,” said Medco’s chief clinical research and development officer, Robert Epstein.

He believes more companies should not wait until a drug is being tested in hundreds, or thousands, of people by Phase II or III, when they are close to being submitted to regulators.

“Most of the companies still show up in mid-Phase III saying they have a cake in the oven and it’s baking and you’re going to love it when it comes out,” Epstein said.

FAILURE TO LAUNCH

The motivation for these tie-ups strengthened with a series of new drugs that did not catch on widely.

Dendreon Corp’s Provenge therapy for advanced prostate cancer is one cautionary tale. Provenge is a novel treatment for patients who have limited options, but sales of the $93,000 therapy have been a huge disappointment.

That’s largely because doctors fear they will not be reimbursed after they buy and administer the drug in their offices. The company’s market value has plunged about 80 percent.

Glaxo is grappling with similar issues with its lupus drug marketed with Human Genome Sciences Inc.

To try to avoid such hurdles in the future, Glaxo and other companies hold advisory board meetings on their experimental products with representatives of insurers and others with expertise on payment for medicines.

Pfizer’s advisory panels also include pharmacy benefit managers and employers to review many of the products in the company’s mid to late-stage portfolio, said James Harnett, Pfizer’s senior director of U.S. health economics and outcomes research.

But some are concerned that bringing in market considerations too soon will undermine the serendipity of scientific discovery, such as medicines that were found to treat a different condition than initially intended.

Pfizer might have never developed a rheumatoid arthritis medicine, now one of its most important experimental products, according to former research chief John LaMattina. The drug was first developed to prevent rejection of organ transplants, he said, a far less enticing market.

Only when Pfizer began human testing of tofacitinib did it see the potential for treating rheumatoid arthritis with a conventional pill, a more attractive option to the injectable medicines that dominate the market, he said.

“I don’t think people dreamed that you could have a small molecule that would successfully challenge the large biologics … so you never would have gone down that pathway,” said LaMattina, Pfizer’s research chief from 2004 to 2007.

LaMattina likened this to how Steve Jobs, Apple Inc’s founder, said that people often did not know what products they wanted until they saw them.

“When you’re doing market research, people are basing their responses and judgments on what’s known and not necessarily looking out of the box,” LaMattina said. “The earlier you get in the discovery/development continuum, the less valuable I think it is.”

Drugs also can prove more useful when used with other therapies, which has been true in the cancer field. That testing may never occur if they look marginally beneficial on their own.

“You find other uses, you find combinations, you find other indications — so many things can happen,” said Nils Behnke, a healthcare partner with Bain & Co.

PAYOR NEEDS

Glaxo has also changed how it rewards researchers. Bonuses are linked to winning reimbursement, not just drug approval.

“This balance between cost control and innovation arguably has swung a little bit more to cost control,” said Jack Bailey, Glaxo’s senior vice president for institutional customers.

In his discussions about the Alzheimer’s drug, SB-742457, Pasteris learned that in some countries, Pfizer’s Aricept is the standard therapy, while in others, Forest Laboratories’ Namenda is being used with Aricept. Both drugs likely will be sold more cheaply in generic form by the time SB-742457 would reach the market.

“If we have to satisfy the regulators, all we need is a trial versus Aricept,” Pasteris said. “To satisfy the payors in some countries, we may need to show evidence versus the combination of Aricept plus Namenda.”

Researchers presented mid-stage data on SB-742457 this summer and are designing Phase III studies, the last stage before seeking approval.

“That’s really where we shape the asset the most,” Pasteris said. “We want to make sure that the endpoints, the trial design, the clinical development plan, the medicine development strategy — it’s all aligned, and it’s all trying to meet the payor needs.”

Catalyst Pharmaceutical Partners (CPRX) Soars & Fades…. Again. Here’s a Closer Look.

The good news is, Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) is up 1.8% today. The bad news is, the current price of $1.12 per share is well under today’s high of $1.39, underscoring a nagging problem that’s been plaguing CPRX since 2009… it just can’t hold onto its gains. Were the news fro the company meaningless, or even bad, the stock’s inability to get anywhere would be understandable. The news has been good though, and got even better today. Still, nothing.

Catalyst Pharmaceutical Partners develops drugs to fight addictions, manage pain, and treat diseases of the central nervous system. There are two in the pipelines, covering eight different ailments. CPP-109 is being developed as a therapy to fight cocaine dependency, addictions to methamphetamines, and a cocaine/alcohol combination addiction. The drug’s in Phase I and Phase II testing right now. CPP-109 is also in preclinical development as a therapy for opiate addiction, primarily for pain management patients.

The drug addiction market isn’t often targeted – at least not with a great deal of pomp – by major pharma names. CPRX isn’t barking up a fruitless tree though. The drug addiction market in the U.S. alone is worth approximately $3 billion per year, most of which is spent on pharmaceuticals. Yet, there still aren’t enough effective treatments, which is largely why it’s been given a Fast Track status by the FDA.

The other in-development drug Catalyst Pharmaceutical Partners is working on is CPP-115. It’s being developed as a therapy for cocaine and opiate addiction, epilepsy, and other nervous system indications. The foundational molecule is the same as CPP-109, but it’s been tweaked to better fight other ailments. The FDA is also as hungry for CPP-109 as it was for CPP-115, granting it a Fast Track status as well, per this morning’s announcement.

By all accounts, CPRX should be soaring. The fact that it’s not is a clue that the market may be seeing or thinking more than the news alone is indicating. On that note…

The ‘word in the street’ is that Pfizer is interested in co-developing CPP-115. It’s strictly a rumor, and in no way has been confirmed – though not denied – by Catalyst Pharmaceutical Partners, and could be something cooked up entirely by those with a vested interest in seeing shares move upward. That rumor is underscored by a similar one that GlaxoSmithKline is also interested in the company for its patent portfolio. Again though, neither Glaxo nor CPRX have indicated such a deal was on the table, and it should be regarded as only a rumor at this point. The fact that the stock plunged right after the trading halt was cancelled forces one to think there’s not much substance to the acquisition speculation.

China Nuokang Bio-Pharmaceutical Inc. Appoints David Gao to Board of Directors

China Nuokang Bio-Pharmaceutical Inc. NKBP
+4.58%
(“Nuokang” or the “Company”), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that Mr. David Xiaoying Gao was appointed to the Company’s board of directors (“the Board”) and as a member of the audit committee and corporate governance & nominating committee, effective on December 19, 2011. Mr. Gao will be replacing Mr. William Keller, who is leaving the Board for personal reasons.

Mr. Gao served as the chief executive officer and a director of BMP Sunstone from February 2004 until its acquisition by Sanofi-aventis in February 2011. Following the acquisition, he transitioned to become a senior integration advisor for Sanofi-aventis from February 2011 to August 2011. Previously, Mr. Gao served as chairman of the board of directors and CEO of Abacus Investments Ltd, a private wealth management company, and also held various executive positions at Motorola, Inc. including vice-president and director of the integrated electronic system sector, Asia-Pacific operations; and served as a member of the management board of Motorola Asia Pacific, Motorola Japan Ltd. and Motorola China.

Mr. Gao holds a B.S. in mechanical engineering from the Beijing Institute of Technology, a M.S. in mechanical engineering from Hanover University in Germany and an M.B.A. from the Massachusetts Institute of Technology. Mr. Gao also currently serves as an independent director for China Biologic Products Inc CBPO
-3.45% .

Mr. Baizhong Xue, the Company’s chairman and chief executive officer, stated, “We would like to begin by thanking William for his contributions over the past few years. We wish him the best moving forward. We are also excited to welcome David to our board. We believe his experience in building BMP Sunstone into a China-based pharmaceutical company with over a hundred million dollars in annual sales will contribute to Nuokang’s future growth prospects. Furthermore, we believe his diverse expertise in the various stages of a corporation’s development garnered from completing and integrating a multinational acquisition and serving as an independent director of a fellow U.S.-listed, China-based peer is invaluable.”

Health Plans Steer Members Away From Walgreen’s Drugstores

As Walgreen Co. (WAG) gets closer to leaving Express Scripts Inc.’s (ESRX) pharmacy-benefit network on Jan. 1, big health plans are steering members toward other drugstores to make sure their medication is still covered.

These efforts highlight the potential fallout Walgreen faces in its contract-renewal dispute with Express Scripts, which manages drug benefits for health insurers and employers. Express Scripts represents about 90 million prescriptions and $5.3 billion in annual Walgreen revenue, and while Walgreen doesn’t expect to lose it all, the shift in traffic to competing drugstores could be substantial.

WellPoint Inc. (WLP) and the U.S. military’s Tricare health plan–which combined represent roughly half of Express Scripts’ revenue–are among the big clients alerting their members.

“Unless an agreement is reached between Express Scripts and Walgreens, members will no longer be able to receive coverage for their prescription medications from Walgreens pharmacies,” WellPoint warned in an online post.

The insurer, Express Script’s biggest client, has sent letters about the change to pharmacy members who used Walgreen recently, plus all members on Medicare plans, a spokeswoman said. WellPoint has also reached out through automated and live phone calls, plus inserts in open-enrollment packages.

Tricare has been working with Express Scripts since August to alert beneficiaries to the potential Walgreen network loss. These efforts include phone calls to members on specialty drugs, direct mailings and outreach to providers, a Tricare spokesman said. The military health plan is also following up with members whose prescriptions are still filled at Walgreen; the drugstore’s current contract with Express Scripts runs through this year.

Walgreen has tried hard to keep the Tricare business, which includes nearly 6 million beneficiaries and is Express Script’s second-biggest client. Walgreen has an online petition for Tricare members to voice their desire to maintain Walgreen access; the drugstore recently said it had collected more than 250,000 signatures.

Walgreen, which last month indicated little customer disruption, declined to offer updated comments on where things stand or potential changes ahead of its quarterly earnings report next week.

The drugstore, which posted net sales above $72 billion in the fiscal year ended Aug. 31, has said long-term fall-out from accepting Express Scripts’s terms would be worse than the short-term impact of losing business. Walgreen could win back some prescriptions if Express Scripts clients eventually depart for pharmacy-benefit managers that provide Walgreen access.

While Walgreen is the biggest U.S. pharmacy chain with 7,700 outlets, there are tens of thousands of other pharmacies in Express Scripts’s network. Tricare said about 99% of beneficiaries will have an alternative pharmacy within five miles, meeting or exceeding access standards in the health plan’s contract with Express Scripts.

Elsewhere, Blue Cross Blue Shield of Massachusetts said it has notified members they will have to switch from Walgreen pharmacies before Jan. 1. The largest private health plan in Massachusetts, with nearly 3 million members, said it is confident it will retain good pharmacy access.

Arise Health Plan, a Wisconsin non-profit that covers the Green Bay Packers, has also advised members to move their prescriptions, Chief Operating officer Mark Minsloff said. Express Scripts–which has online tools to find other drugstores–has assured Arise all members who have used Walgreen have another option within four miles, Minsloff said.

Likewise, WellPoint has done its own analysis and believes that, on average, members will have another in-network pharmacy within a half mile, spokeswoman Lori McLaughlin said. The insurer didn’t have an estimate for how many members are affected.

The Walgreen loss may still be straining WellPoint’s relationship with Express Scripts, which earlier this week disclosed a contract dispute with the insurer. Express Scripts and WellPoint wouldn’t disclose details, but some analysts believe the Walgreen issue could be involved.

Walgreen shares have tumbled about 24% since the Express Scripts dispute went public in June. Analysts at William Blair believe losing Express Scripts-related traffic could cost Walgreen $3.1 billion in sales this fiscal year and $5.2 billion the next year.

That would benefit companies like CVS Caremark Corp. (CVS) and Rite Aid Corp. (RAD), the second- and third-largest drugstore chains, respectively. “We’re certainly in a position to capitalize,” CVS Chief Executive Larry Merlo said in a recent interview.

Walgreen, which has retained a handful of Express Scripts clients with contracts that allow them to maintain Walgreen access, has said it expects to achieve 97% to 99% of its fiscal 2011 prescription volume in the current year. Express Scripts, meanwhile, has said it expects 95% or more of its volume to move forward without Walgreen.

Web of business news: 25 top picks from reader clicks

The end of a year generally affords journalists time to decompress, reflect and then pontificate about the year gone by and what we thought were the most significant stories of the year.

This year, the laggards at Crain’s Detroit Business thought we would compile a list of the top stories and blogs between Jan. 1 and Dec. 1, 2011, as selected by you, based on your mouse clicks or BlackBerry button pushes on our various emails and our website, crainsdetroit.com.
1. Feb. 11: “Deal to sell Pistons has been reached, source says”

If private equity player Tom Gores didn’t appreciate the pleasure and pain of delayed gratification before this year, he probably does now. It took nearly four months from when this story ran until Gores actually closed on the purchase of the Detroit Pistons and its umbrella corporation, Palace Sports & Entertainment Inc.

And Gores barely had begun making his presence known through personnel moves when a labor dispute between the National Basketball Association and its players shut down the league and delayed the opening of the NBA’s regular season more than two months.
2. Feb. 7: “The Eminem Chrysler ad, and what Detroiters think”

After years of saying nice things about Detroit (remember Emily Gail?), singing “Hello, Detroit” (Sammy Davis Jr.) and promoting that “It’s a Great Time in Detroit” — to say nothing of the untold numbers of earnest and determined campaigns featuring the word “renaissance” — all it took was two minutes of Eminem’s driving a Chrysler 200 sedan to the thrum of his 2002 hit “Lose Yourself” to give the city some viral marketing props.

Chrysler Group LLC’s Super Bowl commercial, which also featured a gospel choir, became a YouTube sensation and the beginning of a noted ad campaign and slogan of the year: “Imported From Detroit.”
3. Dec. 15, 2009: “American Jewelry and Loan pawn shop featured on TruTV”

Now this one’s a puzzler. We wrote exactly one Web story about American Jewelry and Loan this year — and it wasn’t this one. How did this story from 2009 — about the store’s becoming the star of the TruTV series “Hardcore Pawn” — attract more than 6,700 page views? (Another great moment in search engine optimization, perhaps?)

“Hardcore Pawn” features father and son Les and Seth Gold along with sister Ashley Broad as they run their busy Detroit pawn shop. They’re probably busier these days: On Aug. 25, we reported that American Jewelry and Loan planned to open a pawn shop in Pontiac.
4. Sept. 4: “Attract, retain, repeat — What’s cool in 2011: Hiring, helping workers build careers”

Apparently, the next best thing to working at a cool place is reading about a cool place to work. (OK, maybe a distant second.) This year’s iteration of Crain’s Cool Place to Work awards program was cheerier than its predecessor in 2009, when the recession felt like a depression.

Many employees who nominated their workplaces this year noted that their employers worked hard to avoid major cuts in pay and benefits during the worst years. Better yet, quite a few said one of the coolest things about the company they work for is that it is growing and hiring. And, yes, there was at least one mention of a foosball table.

5. Feb. 17: “Snyder budget: The era of the tax credit is over”

Early this year, having “Rick Snyder” in a headline guaranteed an attentive online audience, as he began to sketch out and then act on his agenda for Michigan. In this Feb. 17 Web report about Snyder’s budget presentation, the governor made plain what we all know today: The way the state offers business tax incentives is gonna change.

Snyder proposed replacing the Michigan Business Tax with a 6 percent flat corporate income tax for “C” corporations. He also wanted to end or change tax credits for brownfield redevelopment, the Michigan Economic Growth Authority program, energy and film incentives, among others.

And then, with the Legislature’s approval, he did just that.
6. Aug. 2: “Canton pharmacy owner, 25 others accused of billing fraud involving painkillers”

Stories about fraud in health care were popular this year, none more so than Chad Halcom’s Web report that Canton Township pharmacist and businessman Babubhai “Bob” Patel allegedly oversaw a statewide health care fraud in which he distributed painkillers valued at more than $57 million and fraudulently billed Medicare, Medicaid and private insurance carriers.

All told, 25 people were charged along with Patel. Federal prosecutors allege that Patel provided kickbacks, bribes and “other inducements” for physicians to write prescriptions for patients with Medicare, Medicaid or private insurance coverage to be presented at a Patel pharmacy for billing — he owns 26 across the state. He remains in jail until trial.
7. Feb. 11: “Regulators shut down Peoples State Bank; First Michigan buys assets”

Troy-based Talmer Bank and Trust is the state’s fastest-growing, having come a long way from 2009 when it was the 136th-largest bank and known as First Michigan Bank. One reason for that growth is that it has scooped up struggling rivals, such as Community Central Bank Corp. and, as this story reported, Madison Heights-based Peoples State Bank.

In August 2010, federal regulators ordered Peoples to either find investors willing to buy enough stock to get the bank adequately capitalized or find a buyer. About six months later, it found Talmer.

Peoples was founded in Hamtramck more than a century ago and built its business serving generations of Polish immigrants as they migrated here for work in the auto plants or to run the bakeries, restaurants and butcher shops that served those factory workers.
8. April 3: “Whole Foods Market browses in Midtown”

After weeks of hearing murmurings, on April 3, Crain’s restaurant writer Nathan Skid reported online that Austin, Texas-based Whole Foods Market Inc. was shopping for a location in the Midtown area of Detroit. Amid his carefully chosen words, Detroit Mayor Dave Bing said of a Whole Foods deal, “It’s not a question of “if’ but “when.’ ”

In this story, Whole Foods would not confirm any interest in Detroit. But today, the company is poised to sprout up at John R and Mack Avenue.
9. Feb. 4: “Matt Prentice explains what did in his company — Sudden move of No. VI Chophouse”

Not that we really needed website analytics to tell us that our readers like to eat or that they like to eat at Matt Prentice restaurants. But when Nate Skid listened to Prentice talk about the reasons behind the demise of the restaurant group bearing his name, thousands wanted a place at that table.

All it took to bring down his empire, Prentice said, was the unexpected relocation of his top-performing restaurant, the No. VI Chophouse, out of the Hotel Baronette in Novi. He also filed for personal bankruptcy in March. But in the Dec. 12 issue, Crain’s reported that a series of business decisions appears to have revived the Prentice restaurants and even the Matt Prentice Restaurant Group name.
10. March 16: “University of Michigan moves up law school rankings; MSU, Wayne make list for first time”

Next time you tell a lawyer joke, keep in mind that enough of them live here to help a Web story about law school rankings crack our top 10.

In U.S. News and World Report’s 2011 Best Law Schools List, the University of Michigan Law School was No. 7 out of 190 accredited U.S. law schools, compared with a consistent No. 9 in 2008-2010. The Michigan State University College of Law and Wayne State University Law School both made the list for the first time — at Nos. 95 and 121, respectively — because of changes in the magazine’s list format.
11. Feb. 16: “Grow Blue: UM’s first chief marketing officer’s goal is to ‘sell out Crisler’ ”

It’s hard to fathom that the University of Michigan’s athletic program needs its own chief marketing officer, given all the residents of Southeast Michigan who refer to UM teams as “we.” But that’s what the university got in December 2010 when it hired Hunter Lochmann away from the New York Knicks of the National Basketball Association.

In this Page 1 story, Lochmann said his top priority was to fill Crisler Arena, home of the basketball Wolverines: “That’s a personal agenda,” he told Crain’s Bill Shea. “I’ve got to get to the bottom of why that doesn’t happen. I want to get into the data on why people don’t come to the games.” Maybe it helps now that the men’s team, for the first time in years, has been nationally ranked.
12. March 17: “Dan Gilbert: Quicken’s triumph in overtime trial ‘a victory for right over wrong’ ”

Among the many articles of faith woven into the vast tapestry of Crain’s office banter, one stands above all others, invulnerable to the ebbs and flows of the capricious news cycle.

And that is this: People will read anything about Dan Gilbert. They would read his horoscope. His dry cleaning bill. Dan Gilbert Haiku, written good or very bad, would attract eyeballs.

If the Newsmaker of the Year were based on page views, Dan would be the man. When Bill Shea blogged this month about Gilbert’s dissing of the Detroit Lions on Twitter, more than 2,500 people clicked to read more.

In this Web story, Gilbert celebrated his victory and that of Quicken Loans Inc. in a federal lawsuit involving Quicken’s policy to not pay overtime to loan officers who also earn commissions. Gilbert called the jury’s decision “a victory for right over wrong” — hence the headline.

This we exaggerate? Keep reading.
13. Oct. 12: “As hedge fund buys the farms, prices rise — but what happens come the downturn?”

So this is how viral marketing works, eh? The Crain’s Michigan Business weekly Wednesday email reported on a hedge fund that was buying up farmland and, in the process, raising land prices and a few eyebrows. Freelance writer Howard Lovy sent a link of his story to Glenn Reynolds, creator of the Instapundit blog.

With more than 4,100 page views to date, we needn’t add that Instapundit is widely followed.
14. Jan. 12: “More red flags up at Borders”

For years, bookworms throughout Southeast Michigan would speak of exploring the canyons of literature that made up the original Borders bookstore in downtown Ann Arbor, evoking memories of a sort reserved for such iconic regional brands as Vernors, Kmart, Highland Appliance … hmm.

This Jan. 12 Web story by Crain’s Daniel Duggan reported, among other things, that Chapter 11 was an option for Borders Group Inc., which had grown from a single, revered outlet into a chain of more than 600 book and music stores that had been unable to transition into the digital age. Asked about the possibility of bankruptcy, analyst Jim McTevia neither hemmed nor hawed: “Yes.” And even Chapter 11 wasn’t sufficient. In September, Borders was liquidated.
15. Feb. 2: “5 Questions With … sports executive and team investor Andy Appleby”

No other story this year generated as many reader comments as Bill Shea’s Q&A blog with Andy Appleby, chairman and CEO of the marketing and management firm General Sports and Entertainment LLC — and, it turns out, an owner of an English professional soccer team with a substantial fan base.

And passionate? Well, when comments to a story suggest new lyrics for “Over There” (Hint: “The Yanks are coming, the Yanks are coming”), that’s a pretty reliable sign of real, live, visceral, unspellchecked British football passion.

Appleby’s observation during the interview that British soccer fans “take it very seriously” could be a contender for “Understatement of 2011,” if we had a category for that.

Now if we could just get Dan Gilbert to buy an English professional soccer team so we could write about it …
16. Feb. 23: “Taking stand in overtime class-action case, Dan Gilbert defends Quicken culture, explains his e-mails”

… Like we wrote about him here. In this story, Gilbert defended Quicken Loans’ corporate culture and business model during the jury trial involving his company’s overtime policy.

At one point, the exchanges between Gilbert and the attorney for the former Quicken loan officers who were seeking overtime drew a warning from U.S. District Judge Steven Murphy.

Testimony also featured a Gilbert email telling Quicken employees to have a nice Thanksgiving but adding: “How many mortgages will you sell at your Thanksgiving dinner?” Gilbert explained in court: “That was kind of tongue-in-cheek. The rates had come down, and we had some great products, so there was some truth to it.”
17. May 29: “Energy drink king behind $100 million fund: Bhargava sets up tech park for new firms”

Just how big is 5-Hour Energy? Big enough that its creator, Manoj Bhargava, could start a $100 million fund to invest in emerging businesses in the state.

The Stage 2 Innovations Fund was co-founded by Bhargava — CEO of Living Essentials LLC, maker of the popular energy drink — and former Chrysler Group LLC CEO Tom LaSorda. The fund looks to capitalize two to six companies that are about 12-18 months away from commercializing a patented, major new technology. A company should have the potential to reach $100 million to $200 million in net income within a few years, LaSorda and investment fund CEO Simon Boag said in this Page 1 story by Daniel Duggan and Dustin Walsh.
18. April 27: “Snyder reveals details of plan to reform K-12 education system”

Throughout the year, Gov. Rick Snyder has delivered a series of policy addresses that have come to be known as “special messages.” This Web story by Dustin Walsh reported on Snyder’s plan for fixing what he called a “broken” educational system.

Among proposals that have since become law: A pool of funds to award additional per-pupil money to districts that meet financial best-practice measures and changes in the tenure system that make it easier to fire bad teachers.
19. May 27: “New hotel plan emerges for the David Whitney building”

You know downtown Detroit is hot when someone is thinking about opening a hotel. Daniel Duggan reported that the new hotel was being planned as part of a mixed-use development for the historic David Whitney Building.

The building was purchased in March by Whitney Partners LLC, an evenly split joint venture between The Roxbury Group in Detroit and the Farmington Hills-based hotel investment firm Trans Inns Management Inc.

In a Dec. 12 Web story, Duggan reported that Starwood Hotels & Resorts Worldwide Inc. would bring its Aloft hotel brand to the Whitney space.
20. Aug. 28: “Lawyers flee Fieger over workload rule — Ethics concerns cited, disputed”

Now how in the world did a story about Geoffrey Fieger attract so many readers? In the Aug. 28 issue, Crain’s Chad Halcom reported on the turnover at Fieger, Fieger, Kenney, Giroux & Danzig PC — a result of what former Fieger colleagues claim were unreasonable workload requirements.

In a memo, Fieger proposed withholding paychecks from attorneys who didn’t maintain a minimum of 30 pending lawsuits or imposing a $25,000 fine on attorneys who didn’t try at least three cases a year.

The attorneys who left the firm said the penalties created “an ethical minefield where attorneys’ own financial interests could be at conflict with their professional responsibility to clients.” Fieger’s response, in part: “I’m not interested in having people come here to retire on a paycheck from me.”
21. Nathan Skid’s blog, March 29: “The reincarnation of Joe Muer’s”

Two Joes who aren’t average by any means helped return a fabled name to Detroit’s restaurant scene. Joe Vicari, CEO of Warren-based Andiamo Restaurant Group, opened a reincarnation of Joe Muer Seafood in the former Seldom Blues space inside the Renaissance Center. Crain’s restaurant writer Nathan Skid first reported the deal in this March blog.

Vicari purchased the original Muer recipes and licensing agreements and signed on Joe Muer as a consultant for the restaurant, which opened in September to a brisk business.
22. March 3: “Magna plant fire in Howell slows OEM production”

How delicate is the auto industry’s supply chain?

Consider the concern after a fire gutted the Howell plant of Canadian auto supplier Magna International Inc.

The Magna Atreum interiors plant supplied door panels, interior trim and instrument panels to the three Detroit automakers, Mazda Motor Corp. and Nissan North America Inc. Within 24 hours of the fire, some assembly plants slowed production while others shut down.

Yet within six days, 450 employees in Howell were operating the plant at 80 percent of capacity.
23. May 5. “Pinnacle Race Course gives up 2011 horse-racing license”

In the era of the casino, Michigan’s horse racing industry has been hobbled. One local example of the plight of the ponies was Pinnacle Race Course’s announcement that it was surrendering its racing license for 2011.

Pinnacle closed in November 2010, planned to reopen in January 2011, then July. The Huron Township track also said it planned to file an application for 2012 live and simulcast racing permits. Seven months after this Web story was posted, it had not done so.
24. March 7: “Carbone resigns as Beaumont Hospitals’ COO after 9 months on job”

After hiring K. Bobbi Carbone, M.D., as William Beaumont Hospitals’ COO in 2010, CEO Gene Michalski said, “Having a physician as our COO will also enhance our partnership with physicians both in patient care and in business operations.”

Less than nine months later, Carbone resigned for undisclosed reasons. She settled an employment contract dispute with Beaumont for an undisclosed sum and now works in Abu Dhabi in the United Arab Emirates as an executive at a 12-hospital health care company. Sam Flanders, M.D., is Beaumont’s interim COO.
25. Jan. 3: “A&P bankruptcy creates new headache for subleasing tenants”

Call it the ghost of Farmer Jack. When the Great Atlantic & Pacific Tea Co. closed the Southeast Michigan supermarket chain in 2007, it had store leases extending to 2020 in some locations. It was able to sublease some of the space to other chains, while other space was left vacant.

In this story in the Jan. 3 issue, Daniel Duggan reported that A&P, as part of its Chapter 11 bankruptcy, filed a motion to terminate leases at the 20 locations where the space was leased to a subtenant. The move would require the businesses and landlords involved to renegotiate leases and decide which will lose roughly $350,000 per year on a typical lease — money previously paid by A&P. The grocery chain expects to emerge from bankruptcy early next year.