Market Place
High-level exit at Dr. Reddy’s; Drug stockpiling starts as firms face ‘no-deal Brexit’ blues
With Britain preparing for a ‘no-deal Brexit’, Phispers this week looks at how pharmaceutical companies are exploring various options, such as stockpiling, to equip themselves for such a scenario. In M&A news, Bayer AG is selling off its prescription dermatology brands to Denmark’s Leo Pharma. A new report analyzes 12 bestselling drugs in the US and reveals how drugmakers file hundreds of patents to extend their monopolies beyond the 20 years of protection intended under the US patent law. Last month, a drug recall was initiated worldwide due to a cancer-causing impurity found in the valsartan API being supplied by China’s Zhejiang Huahai Pharmaceutical. Now, the FDA is reporting that the impurity may have been on the market for years, not weeks or months. And India-headquartered Dr Reddy’s Laboratories saw another high-level exit.
Dr Reddy’s faces setback as CEO of developed markets quits
Barely five months after he was promoted to the role, Alok Sonig, the CEO of developed markets at Dr Reddy’s Laboratories, has quit the Indian drugmaker. This is a second top management change at the Indian drug major in recent months as its COO Abhijit Mukherjee retired after 15 years and was replaced by an ex-Teva executive — Erez Israeli.
Sonig’s unexpected departure is being seen as a setback for Dr Reddy’s. His peers describe him as a man for all seasons. During his six-year tenure, Sonig handled challenging roles.
“We confirm that Alok Sonig, CEO – Developed Markets, will be leaving the organization, effective September 7, 2018,” a Dr Reddy’s spokesperson said in a statement. “The company appreciates his contributions over the past six years and wishes him success in his future endeavors.”
Sonig’s exit comes at a critical time when Dr Reddy’s is focusing on a band of specialty and proprietary drugs in the US, much like some of the other Indian pharma companies.
On his part, the new COO Israeli is confronted with several challenges at Dr. Reddy’s — from reversing declining revenues in the US, firing the R&D engine, and getting back on track the compliance standards at the company’s manufacturing sites. Israeli’s experience at Teva will come in handy as he executes these changes at Dr Reddy’s.
Meanwhile, news reports suggest Dr Reddy’s recently trimmed staff across departments. News reports say the company has cut 75 to 80 jobs recently.
Tainted
valsartan API has been on market for four years, says FDA
Last month, PharmaCompass had reported on the discovery of suspected cancer-causing impurity — N-nitrosodimethylamine (NDMA) — found in valsartan API. China’s Zhejiang Huahai Pharmaceutical had set off a global recall after it informed regulators worldwide that it had discovered NDMA in its valsartan API after changing its manufacturing process.
In its recent update, the US Food and Drug Administration (FDA) has now said that the tainted ingredient may have been on the market for years, not weeks or months.
“Based on records from the manufacturer of the recalled valsartan, some levels of the impurity may have been in the valsartan-containing products for as long as four years,” FDA said.
The FDA scientists estimate that if 8,000 people took the highest valsartan dose (320 mg) from the recalled batches every day for the full four years, there may be one additional case of cancer over the lifetimes of those 8,000 people. “This assessment led to FDA’s decision to have these batches recalled,” the agency said.
The report comes as two more Chinese companies — Zhejiang Tianyu Pharmaceutical and Zhuhai Rundu Pharmaceutical — have stepped forward to say they are recalling blood pressure drugs tainted with NDMA.
Batches of valsartan, which is packaged as tablets, capsules and in liquid form, from Zhejiang Tianyu Pharmaceutical and Zhuhai Rundu Pharmaceutical, were found to contain NDMA, which is believed to cause cancer in extreme cases.
The EMA also made a similar assessment as the FDA. The EMA also updated their valsartan recall information and said: “Following a preliminary evaluation, EMA estimates that there could be one extra case of cancer for every 5,000 patients taking the affected medicines at the highest valsartan dose (320 mg) every day for 7 years. This is based on average levels of this impurity detected in the active substance from Zhejiang Huahai Pharmaceuticals (60 parts per million).”
The EU regulator had earlier said that the valsartan from Huahai had contained the impurity since 2012.
Meanwhile, China’s state news agency Xinhua reported that Changsheng Bio-technology Co Ltd, a vaccine maker at the center of a safety scandal in China, began falsifying production records for its rabies vaccine in April 2014.
China launched extensive spot checks at vaccine makers around the country last month in order to reduce public outrage after Changsheng was found to have falsified data for the rabies vaccine. The company had also manufactured an ineffective vaccine for Chinese babies.
Changsheng had mixed some batches with expired solution and did not correctly record dates or batch numbers, Xinhua reported, citing the findings of an investigation team established by China’s State Council.
Drug firms face ‘no-deal Brexit’ blues; EMA fears losing 30 percent staff
As Britain appears to be moving towards a ‘no deal Brexit’, pharmaceutical companies are fearing that such a scenario will disrupt supplies of drugs and ingredients to and from the European Union.
For instance, the world’s largest drugmaker Pfizer is considering stockpiling medicines. Pfizer is best known for manufacturing Viagra. While the key ingredient for Viagra is made in Ireland, the pills are made in France.
Similarly, Sanofi and Novartis are increasing stocks in case supplies from the EU are disrupted. And Johnson & Johnson said it is exploring all options to ensure that patients continue to have access to the medicines they need.
In fact, Britain’s new Health Secretary, Matt Hancock, said last week that the National Health Service (NHS) is also preparing to stockpile medicines in case Britain leaves the EU without a deal.
The world’s biggest manufacturer of cancer medicines — Roche — has also said it was taking “appropriate action” to review its stock levels in order to protect supplies to patients.
British drugmaker GlaxoSmithKline said last week it was taking steps to secure the supply of its medicines and vaccines ahead of the UK’s departure from the EU. Similarly, AstraZeneca has said it is increasing its stocks by about a fifth.
Pfizer and Johnson & Johnson are both urging the UK and EU to strike a ‘mutual recognition agreement’ for the regulation and supply of medicines.
There are over 2,600 drugs that have some stage of manufacturing in Britain and 45 million patient packs are supplied from the UK to other European countries each month, while another 37 million flow from EU countries to Britain.
Meanwhile, the European Medicines Agency (EMA) expects to lose around 30 percent of its workforce as it prepares to relocate to Amsterdam by March 2019. The EMA has also warned drugmakers to be ready for a possible hard Brexit in 2019. It has also expressed “serious concerns” over the availability of some 108 medicines that are manufactured exclusively in the UK.
Initial staff surveys suggested that 19 percent of staff might opt not to relocate to Amsterdam. However, the agency now thinks this is a significant underestimate, especially as 135 short-term contract staff will no longer be able to work for it under the Dutch employment rules.
The EMA employs around 900 staff and is the biggest EU institution affected by Britain’s decision to leave the European Union.
Drug
makers file hundreds of patent applications to extend monopoly, says report
A new report by nonprofit group — Initiative for Medicines, Access & Knowledge (I-MAK) — says drugmakers over-patented their top-selling drugs to enable price hikes.
It analyzes the 12 best selling drugs in the United States and reveals that drugmakers file hundreds of patent applications to extend their monopolies far beyond the 20 years of protection intended under the US patent law. A vast majority of those patent applications get granted.
These patents are used by drugmakers for the purpose of forestalling generic competition while continuing to increase the price of these drugs.
AbbVie, which markets the world’s number one selling drug Humira (US$ 18 billion in global sales in 2017), is also the worst patent offender with 247 patent applications.
The report also gives the example of Pfizer, which tried to fend off Lyrica generics by ring-fencing it with 68 patents. Later, to soften the blow from generics, it rolled out a patented, long-lasting formula and steered patients towards it. Along the way, it hiked the drug’s price by 163 percent.
“Pfizer’s patenting strategy with Lyrica illustrates how drugmakers game the patent system in order to extend the patent-protected lifespan of their key products and garner billions more in revenue beyond the twenty-year period,” the report said.
The report found that, on an average, across the top 12 grossing drugs in America, there are 125 patent applications filed and 71 granted patents per drug. According to the report, prices have increased by 68 percent since 2012, and only one of the top 12 drugs has actually decreased in price.
Four of the top 12 drugs have already been on the market for 20 years and have pending patent applications seeking to extend patent life to 2033 (Herceptin, Genentech), 2030 (Rituxan, Biogen/Genentech), 2029 (Enbrel, Amgen), and 2025 (Remicade, Janssen). However, in all four cases, biosimilars of these drugs have been approved in recent years although they are still not classified as interchangeable products. Interchangeable drugs are expected to produce the same clinical result as the reference drug in any given patient.
Herceptin, a cancer drug sold by Roche/Genentech, had patents first filed in 1985. Its current patent applications pending could extend patent exclusivity until 2033 — a 48-year potential monopoly span, the report said.
In a statement, Tahir Amin, co-founder and co-executive director at I-MAK, said “Contrary to what the law intends, drugmakers have transformed the patent system into a defensive business strategy to avoid competition and earn outsized profits.”
Bayer sells dermatology brands to Leo; Almirall picks up Allergan’s business
German drugmaker Bayer is selling its established prescription dermatology brands to Denmark’s Leo Pharma. This is part of Bayer’s overall strategy to integrate seed maker Monsanto, and to bolster its drug development pipeline.
Bayer is selling a portfolio worth over Euros 280 million (US$ 328 million) in revenues that includes prescription skin creams against acne, fungal skin infections and rosacea, as well as some steroidal creams.
Back in 2016, Bayer had sought suitors’ interest in this business, hoping it would fetch around Euro 1 billion (US$ 1.16 billion) at the time. However, it had resisted a mooted deal with buyout group Avista.
While Bayer is not disclosing the financial terms of the deal, news reports say the price tag is below what Bayer had hoped it would receive in 2016, as some products have since lost patent protection.
The transaction does not include Bayer’s over-the-counter dermatology brands such as Bepanthen and Canesten, Bayer added.
Almirall to buy Allergan’s dermatology portfolio: Spanish drug company Almirall SA is buying a portfolio of five dermatology brands from the American firm Allergan for up to US$ 650 million in cash.
Almirall said it would pay US$ 550 million in cash upfront and that there is a possibility of an earn-out of up to US$ 100 million based on business performance.
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