Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Pharma's CEO's Are Beholding to Wall Street, Not Patients

Pharma's CEO's Are Beholding to Wall Street, Not Patients | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Now I [Rich Meyer, author of World of DTC Marketing blog] get that most pharma CEO’s earn a lot of money and cozy up to Wall Street but what about the rank and file under them? Do these people tell themselves the PhRMA lie about the “value” their drugs bring to society in order to cash their paychecks with a clear conscience?

 

With new cancer drugs commonly priced at $100,000 a year or more hundreds of thousands of cancer patients are delaying care, cutting their pills in half or skipping drug treatment entirely, a Kaiser Health News examination shows.

 

One-quarter of all cancer patients chose not to fill a prescription due to cost , according to a 2013 study in The Oncologist. And about 20 percent filled only part of a prescription or took less than the prescribed amount. Given that more than 1.6 million Americans are likely to be diagnosed with cancer this year, that suggests 168,000 to 405,000 ration their own prescription use.

 

It would be so easy for pharma CEO’s to hold a joint press event and inform the public that “under no circumstances should anyone enter financial consequences because of our drugs” but that would of course make the Street very unhappy.

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Some #Biotech CEOs Earned Big Increases in Compensation Even as Their Companies Tanked

Some #Biotech CEOs Earned Big Increases in Compensation Even as Their Companies Tanked | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Last year was a bruising one for the biotech industry. But a handful of biotech executives saw their compensation swell even as their companies tanked on Wall Street.

 

STAT reviewed federal filings from all 162 companies on the Nasdaq Biotech Index. The index as a whole fell by 19 percent last year, so it’s no surprise that CEOs as a group made 25.5 percent less in 2016 than they had taken home the year prior.

 

But five outliers — Cempra, Endo International, Ophthotech, Pacira Pharmaceuticals, and Seres Therapeutics — gave their executives huge raises even though their stocks actually fared far worse than the index average. One CEO got a 385 percent pay increase after his company’s shares fell by more than 70 percent.

 

Such disparities can be maddening to investors. Executive pay is meant to be aligned with shareholder return. If you took a bath on a stock, you’d rather the company’s CEO didn’t recoup a bonus big enough to buy an infinity pool.

 

“It’s something that I fret about, because my compensation is performance-related,” said Eden Rahim, a portfolio manager at Next Edge Capital in Toronto. “If I’m down, I’m not earning anything. And then you see these guys who are well-compensated and don’t really deliver the goods.”

 

That disconnect sometimes stems from poorly thought-out incentive plans that end up rewarding failure, said Aalap Shah, managing director at Pearl Meyer, an executive compensation consultancy in New York. Other times, bad years force boards to strike a delicate balance, paying CEOs enough to keep them around but not so much as to spark an investor revolt.

 

“This is something that is always very hard for shareholders to swallow, but oftentimes directors have to make the tough call to give compensation that looks misaligned,” Shah said. “They do that because they still believe the management team is the one that’s right for the company and its strategy.”

 

Further Reading:

 

  • “Glaxo to Pay First Woman CEO Less, Cites Lack of Experience”; http://sco.lt/67Y7xB
  • “Pharma CEOs Living in an “Alternate Reality” But Getting Paid Exorbitantly High Real World Salaries!”; http://sco.lt/7ooZaT

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Pharma CEOs Speak Out About Drug Prices

Pharmaguy’s Selected List of Pharma CEOs’ Words of Wisdom Regarding Drug Prices, Jobs, and Taxes

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Pharma CEOs Living in an “Alternate Reality” But Getting Paid Exorbitantly High Real World Salaries!

Pharma CEOs Living in an “Alternate Reality” But Getting Paid Exorbitantly High Real World Salaries! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Pfizer CEO Ian Read says. The “ethical” industry he knows is nothing like notorious ex-CEO Martin Shkreli’s work, and certainly isn’t “getting away with murder” as President-elect Donald Trump claims. He also said “we need to pay more for medicine so we can develop more good medicine, so we can drive, through competition, lower costs,”

 

This is the alternate reality in which some pharma CEO’s live. They just don’t understand that consumers are angry and that the lightning rod of that anger is pointed solely at them. We are talking about CEO’s that earn a lot of money too.

 

Median pay for healthcare and pharma executives amounted to $14.5 million in 2015, higher than for leaders in any other sector , according to Equilar, a California firm that researches and analyzes executive compensation. Median compensation for all CEOs in the study, which looked at pay packages of 341 executives at S&P 500 companies across multiple sectors in 2015, was $10.8 million. The increase in healthcare executive pay from 2014 to 2015 was also greater than in other sectors.

 

Further Reading:

  • “#Pharma CEOs Are Well Connected, Move Around a Lot”; http://sco.lt/8hYglt
  • “Five Habits, Traits, Whatever! of "Real" #Pharma Leaders”; http://sco.lt/74JTJR
  • “’1bn Here We Come!’ is A Common Goal for Pharma CEOs”; http://sco.lt/5vB1Yv
  • “Oh Snap! Regeneron CEO Says What to Pfizer CEO Ian Read???”; http://sco.lt/8ZED0T
  • “Harris Poll: Only Nine Percent of U.S. Consumers Believe Pharma and Biotechnology Put Patients over Profits; Only 16 Percent Believe Health Insurers Do”; http://sco.lt/8dzd3p
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#Pharma CEOs Are Well Connected, Move Around a Lot

#Pharma CEOs Are Well Connected, Move Around a Lot | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Healthcare and pharmaceutical CEOs have professional networks more than 30% larger than those of their peers at other S&P 500 companies, according to a study by BoardEx.

The business intelligence provider conducted an analysis of healthcare and pharma CEOs in the S&P 500 in 2015. These CEOs achieved an average network score of 1224 per CEO, compared to an average of 930 per CEO in the entire S&P 500.
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Perfect Storm: Gloucester Police Targets #Pharma as Next Step Against "War on Drugs"

Perfect Storm: Gloucester Police Targets #Pharma as Next Step Against "War on Drugs" | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Police officers in one American city are pointing to Big Pharma, rather than addicts on the street, as the true criminals in the nation's failed war on drugs.


The Gloucester Police Department in Massachusetts received public praise over the summer for an initiative to treat addicts who pose a low risk to residents rather than throwing them into the overburdened prison system.


Now, the department is again in the headlines after it asked followers of its Facebook page to call out the CEOs of major drug manufacturers, and the doctors who sometimes recklessly prescribe their narcotics, as major contributors to drug addiction.


“Prescribers, Pharma … we are waiting. And our patience grows thin. Do you want to be a real conduit to treatment and care, or do you want to be a dealer? Guess which one law enforcement wants you to be? … but we’ll deal effectively with either. Your choice,” the department said in a recent post.


In a separate post, the department listed the names of Big Pharma’s top CEOs along with their respective salaries and contact information. Gloucester police then asked followers to contact the drug industry heads to ask what they are doing to keep doctors’ offices from being the first stop on the road to addiction for so many Americans.


Top 5 Pharmaceutical CEO Salaries:


  1. Eli Lilly — John Lechleiter $14.48 million

jlechleiter@lilly.com 317-276-2000

  1. Abbott Labs — Miles D. White $17.7 million

miles.d.white@abbott.com 847-937-6100

  1. Merck — Kenneth C. Frazier

$25 million + cool private jet.

ken.frazier@merck.com 908-423-1000

  1. Johnson & Johnson — Alex Gorsky $20.38 million

ceo@jnj.com 732-524-0400

  1. Pfizer — Ian Read $23.3 million

ian.read@pfizer.com 212-573-2323

Pharma Guy's insight:

Meanwhile, former New York City mayor Rudy Giuliani earned millions of dollars defending Purdue Pharma against charges of illegal promotion of its pain drug, OxyContin, the abuse of which DEA claims has killed hundreds of people -- mostly teenagers.

Giuliani's OxyContin (and PhRMA) Money (http://bit.ly/julioxy


BTW, none of the pharma CEOs in the above list meet Rich Meyers #1 criterion for "real" pharma leaders; i.e., have salaries under $5 million. For more on that, read: "Five Habits, Traits, Whatever! of "Real" #Pharma Leaders"; http://sco.lt/74JTJR 

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Devyn Mode's curator insight, March 24, 2016 2:47 PM

Meanwhile, former New York City mayor Rudy Giuliani earned millions of dollars defending Purdue Pharma against charges of illegal promotion of its pain drug, OxyContin, the abuse of which DEA claims has killed hundreds of people -- mostly teenagers.

Giuliani's OxyContin (and PhRMA) Money (http://bit.ly/julioxy

 

BTW, none of the pharma CEOs in the above list meet Rich Meyers #1 criterion for "real" pharma leaders; i.e., have salaries under $5 million. For more on that, read: "Five Habits, Traits, Whatever! of "Real" #Pharma Leaders"; http://sco.lt/74JTJR 

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Five Habits, Traits, Whatever! of "Real" #Pharma Leaders

Five Habits, Traits, Whatever! of "Real" #Pharma Leaders | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Forbes, in a recent editorial, said “Pharma Needs A Leader In 2016” and I couldn’t agree more, says blogger Rich Meyer, but let’s be honest here, most pharma CEO’s are NOT leaders but rather high paid executives who bow to investor needs and demands.


What would I like to see in a pharma leader?


  1. No pharma CEO should take a salary above $5M.  It’s not about the title and perks, it’s about actually leading people to help others who need help.
  2. CEO’s should mandate that no patient will be left behind because they can’t afford a product they market.  If someone makes $100K per year, for example, they may not be able to afford a treatment for MS that costs $17K every other month if their insurer won’t cover it.
  3. Win over the rank and file and recognize pirates and innovators. When I received my President’s and Marketing Excel award at Lilly I received them from top executives and also received an email thanking me for my work.  That was like a shot of corporate B12.
  4. Hold Wall Street at bay.  Make them understand that instant gratification is rare within drug development.  Remember these are the same analysts that help cause the huge financial meltdown.
  5. Be human. Stop with the corporate speak. Talk to us like people with a PR talking points scorecard.


Rich left out one requirement that applies to American pharma CEOs: They must be "natural born" U.S. citizens just like is required to be US president. Maybe that would prevent companies like Pfizer giving up their American citizenship to evade US taxes!

Pharma Guy's insight:

The first and last are impossible! 

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The 5 Most Overpaid #Pharma CEOs in the World

The 5 Most Overpaid #Pharma CEOs in the World | Pharmaguy's Insights Into Drug Industry News | Scoop.it

There’s no shortage of ways to rank pharma CEOs: Drug sales. Corporate profits. Even haircuts. Here at STAT, we chose to look at it from a shareholder’s perspective.

 

We calculated shareholder returns over the past three years at the 25 biggest drug companies in the world. Then we compared that with CEO compensation. Five outliers popped out: chief executives who got raises well out of step with what they delivered to investors.

 

(To determine each company’s performance, we used a widely cited metric called total shareholder return, which tracks the value of a single share over three years, including any cash paid out in the form of dividends.)

 

The five companies that so handsomely compensated their CEOs declined to comment specifically on the pay packages, beyond noting that their boards carefully review such matters with many factors in mind. Consultants who work in the field of executive pay, however, were not so reticent.

 

“It’s completely short-sighted,” said Eleanor Bloxham, CEO of Value Alliance. “There’s no justification for the level of these compensation programs. Think of all that money that could have been plowed back into R&D, or salaries, or retirement benefits — anything to create a happier, more motivated workforce.”

 

#5 on the list is: Joseph Papa, Valeant Pharmaceuticals

 

Valeant paid its 61-year-old chief executive $62.7 million in cash and stock last year, more than 500 percent more than his predecessor made in 2014. The company, which faces crippling debt, has lost 88 percent of its value over the past three years amid congressional scrutiny, allegations of fraud, and waning revenue.

 

Find the others here (subscription required).

 

Further Reading:

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Glaxo to Pay First Woman CEO Less, Cites Lack of Experience

Glaxo to Pay First Woman CEO Less, Cites Lack of Experience | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Emma Walmsley, poised to take over as the first female chief executive officer of GlaxoSmithKline Plc, will earn about a quarter less than her predecessor Andrew Witty to reflect her lack of experience at the helm.

 

Walmsley will be paid an annual base salary of about 1 million pounds ($1.2 million), the London-based drugmaker said in its annual report. That compares to Witty’s pay of 1.15 million pounds last year. Her targeted bonus doesn’t exceed her salary, whereas Witty was given the opportunity to collect 125 percent of his pay through the bonus.

 

The lower compensation, for a woman who is breaking the gender barrier to become the first female to manage one of the world’s top 25 pharmaceutical companies, is likely to re-ignite a debate on the pay gap between the sexes. But it isn’t unusual that compensation levels change when a new CEO takes office as boards seek to link pay packages to the person’s level of experience and tenure.

 

“This is the moment to reassess the executive pay structure,” said Stefan Stern, director of the High Pay Centre, a think tank on top U.K. executive remuneration. “It’s good to focus on the contribution from the new person and it’s good to be tough and pay somebody less than their predecessor if their CV is at a different stage.”

 

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Acorda Therapeutics CEO Ron Cohen is Optimistic That Drug Industry Can Make a “Fair Profit” and Still Get Respect

Acorda Therapeutics CEO Ron Cohen is Optimistic That Drug Industry Can Make a “Fair Profit” and Still Get Respect | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Acorda Therapeutics CEO Ron Cohen is pleased that Marathon Pharmaceuticals decided to pause the commercial activities of its new Duchenne muscular dystrophy treatment Emflaza in response to criticism of its high price tag.

 

“That's the sort of response that is helpful,” he said, during a call Tuesday with investors.

 

Last week, Marathon announced that Emflaza, its new DMD drug, would cost $89,000 per year (read “Senators Launch Probe into Marathon's $89K Price Tag for ‘Cheap Steroid’ - Company Retreats”; http://sco.lt/7dIrHV). The announcement caused outrage from patient advocates and lawmakers, including Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD), who accused Marathon of abusing the Orphan Drug Act, a program that grants drugmakers seven years of market exclusivity in exchange for bringing a rare-disease drug to market. A generic version of the drug, a corticosteroid, when sold outside the U.S., costs $1,200 per year, according to media reports.

 

Still, Cohen, a vocal proponent of the industry, said he is more optimistic than he was a year ago about reaching a point in which companies can make a “fair profit” while also rebuilding the trust of the public and the government.

 

The fact that the pharmaceutical industry is facing tremendous pressure to bring down drug prices and extend access is “no secret,” said Cohen.

 

In the past, there was “a lot of finger pointing across different pieces of the system,” he added (read “Pharma CEO Rips Insurance CEOs a New One! Exposes Salaries, Blames Them for High Drug Prices”: http://sco.lt/6kN065 and “High Rx Drug Prices? We’re Not to Blame Say Payers & Our Unbiased Poll Proves It!”; http://sco.lt/64g9mT). But that strategy was ineffective and only allowed external parties to attack drug companies even more, he said.

 

Political leaders “want to make sure that the U.S. remains a leader in those areas … and that gives us a foundation for having constructive discussions,” he said.

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@Richmeyer Calls for Resurrection of George Merck - a #Pharma CEO Who Put Patients Before Profits

@Richmeyer Calls for Resurrection of George Merck - a #Pharma CEO Who Put Patients Before Profits | Pharmaguy's Insights Into Drug Industry News | Scoop.it

The biggest challenge facing pharma, and all healthcare for that matter, is the drive for increased profit at the expense of patients. Unless pharma acknowledges that they need to put patients first in everything they do, they are going to pay the price in increased calls for a “single payer” system.

 

Following Digital Pharma in social media I was reminded that there still are a lot of very good people in the industry who understand the challenge of marketing to patients today. However, like I wrote before, there is a disconnect between developing a strategy and actually implementing it.

 

When I see the salaries of pharma CEO’s and health insurance executives I am often troubled and confused. How could a health insurance CEO take home tens of millions of dollars in compensation when they raise rates for customers? How can a pharma CEO take home so much money knowing that there are some patients who can’t afford their medications?

 

DTC marketers know what they need to do to make their marketing relevant to their audience, but they often lack the budgets to make it happen. Everything is now based on ROI instead of asking “how can we help patients?”. Offering a medication to fight chronic health problems is not enough. Patients today need help from a healthcare system that treats them as a number not a person. They are left to fend for themselves when it comes to understanding how to live with health issues that affect their lives.

 

A new breed of pharma CEO is needed. Someone who can tell Wall Street that what we are doing to help patients will lead to better profits and someone who doesn’t ask for a compensation package that makes them a millionaire ten times over. Most importantly, we need CEO’s that allow the rank and file to implement programs that actually embrace patients based on their needs rather than a projected ROI.

Pharma Guy's insight:

When was the last time a big pharma CEO was featured on the cover of Time magazine (does that mag still exist?). Unfortunately Merck has rewritten its founder's words: "We try to remember that medicine is for the patient investor. We try never to forget that medicine is for the people investors. It is not IS for the profits. The profits follow lead, and if we have remembered that, they will never fail to appear. The better we have remembered that, the larger they have been." – George Corporate Merck. For more on that, read “Merck in the Mirror: Profits, Not People, Come First. Shame!”; http://bit.ly/12lduG2

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“1bn Here We Come!” A Common Goal for Pharma CEOs

“1bn Here We Come!” A Common Goal for Pharma CEOs | Pharmaguy's Insights Into Drug Industry News | Scoop.it

"$1bn here we come."


That was the triumphant message sent by then-Turing Pharmaceuticals CEO Martin Shkreli, the infamous "Pharma Bro" who jacked up the price of a life-saving drug by 5,000 percent last year, when it became clear his firm could acquire the rights to the medicine. The email went to Turing's presumably pleased board of directors last May.


To anyone who's followed this story since The New York Times shined a spotlight on Turing and intensified the national debate about prescription drug pricing last fall, the Shkreli email and other documents made public by the Democrats on the House Government Reform and Oversight Committee Tuesday do little more than confirm the basic facts. Turing raised the price of Daraprim, which treats a deadly parasitic infection called toxoplasmosis that afflicts HIV/AIDS patients, because it could. The company reaped a windfall, followed by a massive backlash that forced out Shkreli without providing any relief to patients.


But this kind of drug pricing strategy isn't limited to one rogue executive or company. Though rarely quite so blatant, it's woven throughout the pharmaceutical industry.

Pharma Guy's insight:

The quote comes from an email Shkreli sent to the Chairman of the Board of Directors on May 27, 2015, in response to news that Turing had made significant progress towards acquiring Daraprim. I can image many other pharma CEOs expressing the same sentiment after launch of any new potential "blockbuster" drug. After all, "blockbuster" means sales over $1bn per year in pharma jargon.

 

Related story: #Pharma CEOs Fill in the Drug Pricing Debate "Gaps"; http://sco.lt/7fqvGT

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#Pharma CEOs Fill in the Drug Pricing Debate "Gaps"

#Pharma CEOs Fill in the Drug Pricing Debate "Gaps" | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Several factors are being overlooked when discussing drug pricing in the U.S., three pharma CEOs say.


The public is getting overly simple arguments in the debate about drug pricing, three pharma CEOs said Monday.


The issue first took center stage last September when Martin Shkreli, then-CEO of Turing Pharmaceuticals, raised the price of a specialty drug from $13.50 to $750 per pill.


Eli Lilly CEO John Lechleiter said Monday the public is not getting the full picture. "Some of the noise you hear about drug pricing neglects the fact that we often must pay deep discounts in a market-based environment where we're competing in many cases against other alternative therapies, including those low-cost generics," he told CNBC's "Squawk on the Street." 


In another interview, Novartis CEO Joseph Jimenez said "innovation has to continue to be rewarded or we're just not going to be able to see the kind of breakthroughs that we have seen" on cancer research, specifically regarding the uses and benefits of the cancer-fighting drug Gleevec. 


"We continued to show that the drug was valuable in other indications in cancer and so we needed to be reared for that innovation and we're pricing according to that," he told CNBC's "Squawk Alley" on Monday.

Pharma Guy's insight:

The 3rd CEO is Pfizer's Ian Read who famously who suggested we look at the "other side of the ledger"; http://bit.ly/ianpish 

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