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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This #Pharma CEO Speaks with Forked Tongue!

This #Pharma CEO Speaks with Forked Tongue! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

One year ago, Brent Saunders tried to single-handedly reset the national debate over drug pricing.

 

The Allergan chief executive issued a “social contract” and vowed to keep price hikes below 10 percent a year. He argued that drug makers could — and should — act responsibly amid smoldering criticism over prices (read “Allergan's Brent Sauders' ‘Manifesto’ on Drug Prices & Access”; http://sco.lt/6WN0AT). Few companies followed suit, but Saunders won a high profile for his efforts.

 

Now, though, an ingenious deal he struck to protect Allergan’s patents on a lucrative drug calls into question his campaign to do right by the American public.

 

In short, the social contract may be headed for the trash bin.

 

Here’s the story: Earlier this month, the drug maker agreed to transfer six patents for Restasis eye drops to the St. Regis Mohawk tribe. There is a complicated legal calculus behind this maneuver, but in essence, Allergan may have found an avenue for thwarting lower-cost generic competition.

 

How so? The Mohawk tribe is a sovereign entity. This means it’s immune from a type of patent challenge called inter partes reviews, which are handled by a special appeals board, not your usual court. Brand-name drug makers detest these reviews, because they are easier to file than conventional lawsuits and the appeals board is believed to have a lower bar for nullifying patents than the courts.

 

And guess what? Allergan faces just such a review of its Restasis patents. Transferring the patents to the tribe could eliminate this challenge.

 

If the maneuver succeeds, it’s good news for brand-name drug makers and their shareholders, because it’s yet another way to delay generic competition. The Allergan patents, by the way, are not scheduled to expire until 2024.

 

However, this could be bad news for consumers, who don’t want to wait longer for cheaper drugs. If so, Allergan’s gambit hardly seems like the way to fulfill a social contract predicated on delivering more affordable medicines.

 

“Saunders is being highly hypocritical,” said Michael Santoro, a professor at the Leavey School of Business at Santa Clara University, who has studied pharmaceutical ethics. “A social contract implies the interest of both parties is taken into account. In this case, the consumers don’t get a voice in the way the products are made available. It’s not really a contract.”

 

Further Reading:

  • "LA Times Columnist Not Drinking Kool-Aid Served Up by Allergan CEO Saunders"; http://sco.lt/72uFt3 
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Allergan CEO Saunders Says Martin Shkreli is a "Mentor"

Allergan CEO Saunders Says Martin Shkreli is a "Mentor" | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Sarah Hassan was new to the hedge fund world in 2010 when a longtime friend of her father suggested she meet a “rising star” in the industry: Martin Shkreli.

The friend, Brent Saunders, the chief executive of pharmaceutical giant Allergan, said he had had “some phenomenal returns” by investing in one of Shkreli’s funds, Hassan told a federal jury in Brooklyn this week. “Mr. Saunders had suggested we meet up because I was trying to learn about the hedge fund world. He thought Martin could be mentor,” she said.

Hassan eventually met Shkreli for lunch at a Manhattan restaurant, during which he recommended some books to read and gave general advice about wading into hedge fund investing. Hassan would go on to invest $300,000 in one of Shkreli’s hedge funds, MSMB Capital.

So marked the start of business relationship that produced a handsome windfall but would eventually lead to Hassan testifying this week against Shkreli as he stands trial for defrauding investors and committing securities fraud. Hassan’s dealings with the Wall Street bad boy offered a window into the workings of the lucrative hedge fund world, and illustrated the tension at the heart of the prosecution’s case: the victims ultimately made money.

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Donald Trump as President Doesn’t Change the Debate on Drug Pricing, Says Allergan CEO

Donald Trump as President Doesn’t Change the Debate on Drug Pricing, Says Allergan CEO | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Like many Americans, the results of the 2016 U.S. Presidential election surprised me. Many fully expected a Hillary Clinton victory. With that expectation was the belief that drug pricing would remain a key focus of the political debate. 

With the election of Donald Trump as our next President, is the focus off drug prices? Will things go back to business as usual? Will changes to the Affordable Care Act, the economy, jobs and immigration consume all of the political oxygen in the room leaving no room for anything else? 

My answer to those questions: No. 

Let’s not fool ourselves. The outcome on November 8 didn’t change the fact that many Americans are angry about the rising cost of healthcare and their medicines. This anger will fuel the discussion about affordability well into the future.  

The biopharmaceutical industry does amazing things to help people and is an American treasure. As an industry, we discover and advance inventions that improve health. We fund research by universities, academic institutions and startup biotech companies. We deliver new medicines, vaccines and devices that help millions of people  live longer, healthier lives. And, we employ hundreds of thousands of people in good paying jobs who are committed to doing good things every day.

But our industry has a social contract.  Patients understand that making new medicines requires significant investment. Companies doing the hard, long and risky work of bringing new medicines to market have generally understood that they have to price medicines in a way that makes them accessible to patients while providing sufficient profit to encourage future investment. Everybody wins when it works the way it should.

But some have violated this social contract, and the whole industry is under attack. The election results don't change that debate. 

Pharma Guy's insight:

Related article: “Allergan's Brent Saunders' Manifesto on Drug Prices & Access”; http://sco.lt/6WN0AT

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Allergan's Pipeline is Strong Says Pfizer

Allergan's Pipeline is Strong Says Pfizer | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Pfizer, wending toward a record-setting $160 billion merger with Allergan, said its soon-to-be subsidiary doesn't get the R&D credit it deserves among industry insiders.


Chief among Allergan's investigational drugs is rapastinel, a treatment for depression, followed by the gastrointestinal drug relamorelin, a uterine fibroid therapy called Esmya and a Phase II migraine treatment acquired from Merck.

Pharma Guy's insight:

In communication with his minions on Earth, Saunders, who once claimed early-stage R&D "has not returned its cost of capital," has walked back some of his more strident positions in recent months.

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Allergan CEO Talks Anti-Lip Enhancement For Teens, But Will Docs Listen?

Allergan CEO Talks Anti-Lip Enhancement For Teens, But Will Docs Listen? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Allergan is targeting some newer, fast-growing markets with its aesthetic drugs portfolio—but the under-18 crowd isn’t one of them.

 

In a Wednesday blog post, CEO Brent Saunders laid out the reasons he struggles with the idea of using some of his company’s own treatments in minors—and asked others in the field to share their opinions.

 

“As the father of two high-school-age girls, I am sensitive to the societal pressures they face—to look a certain way or meet a certain standard,” Saunders begins. When that world intersects the world of medical aesthetic tech—through the “inappropriate use of medical aesthetic procedures among minors—it is time to speak up,” he added.

 

With his blog post, Saunders is wading into a debate larger than his own business, addressing the tough-to-achieve markers of beauty that pop stars, actors, models and fashionistas set for young girls and women, consciously or not. The way he sees it, “emotional maturity is critical to the decision-making process involved to fully understand treatment options and their potential implications,” and “many teenagers lack that level of maturity.”

 

Prettifying injections and treatments generally are used off-label in teens. Allergan's in particular—which include blockbuster toxin Botox and filler Juvederm, aren't FDA-approved for minors, Saunders points out. "To be clear, Allergan’s medical aesthetic products are approved for adults," he writes.

 

The post, which he titled “Building a Consensus on Medical Aesthetic Treatment for Minors,” comes as interest in aesthetic treatments grows among younger patients. Saunders cites the lip injection trend that’s taken off among teens, and points out that girls are increasingly using soft tissue and hyaluronic acid dermal fillers, too.

 

“With each passing year, the rates of inappropriate use of aesthetic treatments among this teenage population are likely to increase,” he wrote.

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Allergan Rings in New Year with 9.0% to 9.5% Price Hike for Nine Drugs

Allergan Rings in New Year with 9.0% to 9.5% Price Hike for Nine Drugs | Pharmaguy's Insights Into Drug Industry News | Scoop.it

A bunch of specialty pharma companies just boosted prices on key therapies for the year ahead, with Allergan among the most notable after CEO Brent Saunders in September publicly condemned companies in the sector for aggressive or predatory price increases (read “Allergan's Brent Saunders' ‘Manifesto’ on Drug Prices & Access”; http://sco.lt/6WN0AT).  

 

The pricing on nine Allergan products effectively increased on Jan. 1, but the company did remain within its promise to limit price increases to a single-digit percentage as promised in the fall. Pricing on each of the products will be increased by either 9% or 9.5%, according to a Jefferies report on Tuesday that notes a lag of several weeks is typical before new pricing is reflected.

 

Allergan's "social contract with patients" was revealed in a September blog post by the chief executive in the wake of public outcry around drugmakers such as Mylan for its anticompetitive measures to boost rates for its EpiPen used to save the lives of individuals suffering an allergic reaction.

 

"The price increases are the first since the Social Contract was introduced in September 2016 and they are consistent with its commitments," Allergan spokesman Mark Marmur wrote in an email Tuesday morning, adding that this will be the only increase in 2017 for these brands.

 

The basket of key brands victim to price increases at Allergan this year include Bystolic, Delzicol, Estrace, Lo Loestrin Fe, Lumigan, Minastrin, Linzess, Namenda XR and Restasis.

 

Further Reading:

  • “LA Times Columnist Not Drinking Kool-Aid Served Up by Allergan CEO Saunders”; http://sco.lt/72uFt3
Pharma Guy's insight:

If Allergan keeps raising the prices of these drugs by 9.5% each year, the price of each drug will have doubled after the 7th or 8th year.

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LA Times Columnist Not Drinking Kool-Aid Served Up by Allergan CEO Saunders

LA Times Columnist Not Drinking Kool-Aid Served Up by Allergan CEO Saunders | Pharmaguy's Insights Into Drug Industry News | Scoop.it

So it’s come to this: The chief executive of a major drug company is a hero because he won’t rip off customers any more (read“Allergan's Brent Sauders' ‘Manifesto’ on Drug Prices & Access”; http://sco.lt/6WN0AT)

 

Brent Saunders, CEO of Allergan, the company best known for making Botox, made headlines this week after posting an announcement on his company’s website that future price hikes will be limited to single digits and he’ll no longer jack up prices to crazy levels right before a patent expires.

 

“While we have participated in this industry practice in the past, we will stop this practice going forward,” Saunders said.

Excuse me for not drinking the Kool-Aid, but how is this different from a schoolyard bully patting himself on the back for saying he won’t beat you up any more? What about all the past beatings? Forgive and forget?

 

If Saunders deserves points for anything, it’s being the first CEO of a top pharmaceutical company to try to get out in front of scandalously high drug prices before lawmakers, riding a wave of public outrage, lower the boom with some hard-and-fast regulations.

 

“I don’t like what is happening,” he said in his blog post, adding that “it is hard to speak out publicly on this.”

 

Deep breath. Just tell us how you feel.

 

“The healthcare industry has had a long-standing unwritten social contract with patients, physicians, policy makers and the public at large,” Saunders said. “Those who have taken aggressive or predatory price increases have violated this social contract!”

 

And even though Allergan once exhibited the same shoddy behavior, the company has seen the light. Saunders committed himself to a renewed social contract.

He said the company’s focus now is on pricing its drugs “commensurate with, or lower than, the value they create.” I’m not sure what that means exactly. How is such value determined?

 

 

Allergan sells 30 capsules of its Alzheimer’s drug Namenda XR for about $440, according to the price-comparison site GoodRX. The price was boosted by about 10% at the beginning of the year.

Twice as many tablets of the generic, older version of Namenda cost about $20. Is their value really that different?

 

Saunders, who received nearly $22 million in compensation last year, vowed that “we will not engage in price gouging or predatory pricing.” Um, thanks?

 

He said Allergan will limit annual price hikes “to single-digit percentage increases.”

 

That, I suppose, is an impressive commitment in light of the triple-digit increases that are becoming the industry norm. But consider this: The current U.S. inflation rate is 0.8%, so a price increase of, say, 5% represents a significant markup over living costs. Moreover, wages for many workers haven’t risen in years.

 

“You don’t see anything else going up 7%, 8%, 9% a year,” said Janet Schwartz, an assistant professor of marketing at Tulane University who specializes in healthcare. “Pharmaceuticals are far outpacing the rate of inflation.”

 

Pharma Guy's insight:

These are exactly the points I was thinking of making but I didn't want to be the pharmaguy that always sees the pit in the cherry!

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