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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Regeneron CEO Len Schleifer vs Allergan Chief Brent Saunders re Controversial Native American Tribe Patent Deal

Regeneron CEO Len Schleifer vs Allergan Chief Brent Saunders re Controversial Native American Tribe Patent Deal | Pharmaguy's Insights Into Drug Industry News |

One of the drug industry’s most persistent critics happens to be one of its most famous faces. And Dr. Leonard Schleifer, founder and CEO of Regeneron Pharmaceuticals, didn’t disappoint in his latest performance.


“It’s nuts,” Schleifer said Thursday of Allergan’s controversial move to protect patents by transferring them to a Native American tribe. Brent Saunders, Allergan’s CEO, made waves and headlines alike last year with a promise to do right by society. To Schleifer, the patent deal violates Saunders’s vaunted social contract and, plainly, “makes your company look bad.”


The debate, which took place at Forbes’ annual health care conference, was classic Schleifer, whose schtick routinely breaks up the monotony of drug industry panels that tend to feature wealthy white men agreeing with one another before a live audience.


But some analysts caution that Schleifer’s tell-it-like-is persona might have a downside — that he, like Saunders, may one day find his bold words used against him.


Further Reading:

  • “Allergan’s Tribal Warfare to Save Multi-Billion $ Blockbuster Restasis from Death by Generics”;
  • “Regeneron CEO Len Schleifer vs Pfizer CEO Ian Read on Drug Prices Redux”;
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Pfizer-Allergan Merger Means Consolidation of Ad Agencies. And Less Advertising Spend?

Pfizer-Allergan Merger Means Consolidation of Ad Agencies. And Less Advertising Spend? | Pharmaguy's Insights Into Drug Industry News |

When Pfizer announced plans to acquire Allergan for $155 billion, the first questions to surface had to do with the feasibility of the deal. What are the tax implications? What would a combined Pfizer-Allergan look like? 

The deal not only creates the world's largest drugmaker but also one of the world's largest advertisers. Combined Pfizer and Allergan spent a total of $1.6 billion on advertising in 2014, according to Kantar Media.  

At stake are the fates of the drugmakers' massive brand budgets for drugs like Viagra, Celebrex, Botox and Juvederm, to name a few. There remains a lot of uncertainty about which agencies will be left outside looking in and which firms will be awarded potentially hundreds of millions of dollars in new billings when the dust clears, according to agency executives interviewed for this story.

An unnamed executive at an independent healthcare agency said the merger will likely lead to a consolidation of marketing agencies. “It's not a matter of if, but when,” he said. “They have to figure out how profound a disruption do they want?”

Pfizer is already the seventh largest advertiser in the US, according to Kantar Media data cited by The Wall Street Journal. Globally, in 2014 Pfizer spent $1.4 billion on advertising; Allergan spent $266 million; and Actavis, which acquired Allergan in November 2014 and took the drugmaker's name, spent $387 million, according to Kantar Media. In comparison, Procter & Gamble—the world's largest advertiser in 2014—spent $4.6 billion.

From January to June of this year, Pfizer spent $740 million while Allergan spent $144 million. Actavis spent $261 million in the same timeframe. 

The same agency executive noted, however, that it's unlikely any significant changes to the drugmakers' agency rosters prior to September 2016. The deal is expected to close by the end of next year. 

Pharma Guy's insight:

There is already talk that Brent Saunders -- Pfizer-Allergen CEO heir apparent -- is not keen on R&D spending (see here: He may be even less keen on advertising spending.

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Allergan's Brent Saunders' "Manifesto" on Drug Prices & Access

Allergan's Brent Saunders' "Manifesto" on Drug Prices & Access | Pharmaguy's Insights Into Drug Industry News |

Access & Pricing

We commit to making these branded therapeutic treatments accessible and affordable to patients while also ensuring that we can continue to meet our ‘invest and innovate’ obligations outlined in Principle 1.

Providing our treatments to patients is not a straightforward exercise.  We have to go through many decision makers and intermediaries to make sure that our products are available to the patients who need them.  That means government payers, regulators, private insurers, and PBMs to name a few.  We commit to working with decision makers and intermediaries to make our products accessible to all people who need them.  This often includes giving discounts and paying rebates.  The current pricing environment is highly competitive with large payers making decisions that may limit patient access to our medicines in favor of a competitor based on the latter’s willingness to pay more rebates.  In order to ensure that patients and physicians have access to a full array of medical options, we believe that these intermediaries should have open access to formularies whenever possible. 

We commit to these responsible pricing ideals for our branded therapeutics.

  • We will price our products in a way that is commensurate with, or lower than, the value they create by mitigating or avoiding the need for other treatment modalities or providing better quality of life to those patients without other treatment options.
  • We will enhance access to patients.  This means that Allergan will enhance our patient assistance programs in 2017 to match the current industry leader(s).
  • We will work with policy makers and payers to facilitate better access to our medicines.
  • We will not engage in price gouging actions or predatory pricing.
  • We will limit price increases.  Where we increase price on our branded therapeutic medicines, we will take price increases no more than once per year and, when we do, they will be limited to single-digit percentage increases.  Our expectation is that the overall cost of our drugs, net of rebates and discounts, will not increase by more than low-to-mid single digits percentages per year, slightly above the current annual rate of inflation. 
  • We will not engage in the practice of taking major price increases without corresponding cost increases as our products near patent expiration. While we have participated in this industry practice in the past, we will stop this practice going forward.  Where new regulatory requirements impose added costs, we will seek to reflect those costs in our pricing.
  • We commit to providing an aggregate view of the net impact of price on our business at least annually.

Pharma Guy's insight:

I can't help but think there's a lot that can be read between the lines in this manifesto. Any comments?

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Brent Saunders, Pfizer-Allergan CEO Apparent, Has History of Anti-Discovery Research Views

If you are an R&D “lifer” as I [John LaMattina, former Pfizer R&D President] am, particularly one who spent 30 years with Pfizer, you have to be a bit worried about the Pfizer –Allergan deal. The worry stems not from all the talk about inversions and tax avoidance, but rather about Brent Saunders, current Allergan CEO and the future president and COO of the newly combined company. After all, this is the person who told Forbes last January that “the idea that to play in the big leagues you have to do drug discovery is a fallacy”. If you believe, as I do, that Pfizer is one of the few companies in the world that can take an idea and convert it into a new medicine (albeit over 15 years at a cost of $2.6 billion), these words are chilling.

Since plans for the new merger were jointly announced by Pfizer CEO, Ian Read, and Saunders, the Allergan CEO has curiously dialed back his rhetoric.

A cynic might say that Saunders is simply telling the public, as well as his future Board of Directors, what they want to hear. Perhaps this is the case.

It will be interesting to see if he continues to play down his previous anti-discovery research views. But it is safe to say that, over the coming months, there is no other pharmaceutical executive whose words and actions will be more closely monitored by both Wall Street and Pfizer scientists than Brent Saunders. After all, presumably he will become the CEO of the world’s largest pharmaceutical company.

Pharma Guy's insight:

Writing in Nature, former Pfizer R&D executive John LaMattina noted that the company's three largest buyouts--Warner-Lambert, Pharmacia and Wyeth--resulted in sweeping research cuts and site closures, leaving more than 20,000 scientists out of work. And those who stick around were saddled with major R&D delays, LaMattina wrote, as integrating two large companies involves a painstaking review of assets that can slow development down to a crawl. Even more difficult to quantify is the effect on productivity, he wrote, as word of potential layoffs spreads fast throughout a large company and distracts workers from their projects.

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