Pharma news highlights: China, CRO bonuses and hiring trends

Ed Silverman provides a rundown of the latest hot news stories in the pharma world.

Just because these are the long, lazy days of summer does not mean things are slow. Quite to the contrary, the pharmaceutical industry is humming along at its usual pace. Here then is a round-up of some of the latest goings on...

FDA visa delays in China

An ongoing delay in obtaining visas from China for FDA staffers to work on a long-term basis in the country is preventing the agency from proceeding with plans to increase inspections, bolster regulatory practices and collaborate on public health strategies. One FDA staffer withdrew his application for a visa in April after waiting nine months for diplomatic approval to work in China.

The spokesman says the US State Department last October formally notified the Chinese Ministry of Foreign Affairs about obtaining visas for additional inspectors, a move made possible by an extra $10 million in FDA funding. Since January, the agency has been waiting for the visas, but the FDA spokesman could not explain the hold up. The Chinese Embassy in Washington DC has not responded to questions.

"Since January, the agency has been waiting for the visas, but the FDA spokesman could not explain the hold up."

The delay is a setback to FDA efforts to improve the safety of the pharmaceutical supply chain, an issue that has been haunting the agency ever since contaminated heparin made in China was linked to 81 deaths in the US in 2007 and 2008. The episode sparked a firestorm of criticism of the FDA for its failure to monitor medicines made there.

CRO recruitment and retention bonuses

As contract research organizations fine tune the menu of services offered to drug makers, employee turnover remains high, and is rising outside the US. As a result, the use of recruitment and retention bonuses are growing rapidly, according to a new survey of CROs that operate in the US and abroad.

Last year, voluntary and involuntary turnover at US-based CROs was 18.6 percent, a drop from 19.7 percent the year before. However, outside the US, this rate increased to nearly 22 percent, from 17.8 percent. Meanwhile, 88 percent of CROs used recruitment bonuses, up from 65 percent in 2011, and 53 percent of CROs used retention bonuses last year, up from 29 percent the year before.

"Last year, voluntary and involuntary turnover at US-based CROs was 18.6 percent..."

The high turnover rate was nearly across the board, according to HR+ Survey Solutions, which queried 20 public and private CROs that, collectively, employ tens of thousands of people in 34 different countries. The only exception was among project managers, where the rate fell to 10.5 percent from 21 percent. The highest turnover rate was among clinical research associates.

To cut the rate, CROs are using bonuses to recruit people who might normally not have received such payouts in the past. For instance, the survey found that recruitment bonuses are being dished out for people whose salaries are less than $60,000 and 30 percent of CROs now use these to attract non-exempt workers, who are eligible for overtime pay.

Pharmaceutical industry headcount decline

A new analysis of pharmaceutical industry hiring trends in recent years finds that the total job loss amounted to 4 percent – or a decline in total headcount of approximately 36,000 positions - between 2007 and 2012 among the world's 11 biggest drug makers, according to EP Vantage. Besides acquisitions, ongoing expansion in so-called emerging markets offset many of the cuts.

However, numbers vary among drug makers. For instance, Novartis headcount jumped 30 percent during this period, to more than 127,700, thanks in part to its acquisition of Alcon, although in the US, 31 percent of its jobs were shed. Overall, AstraZeneca employment dropped by 23 percent amid several rounds of cutbacks, while Bristol-Myers Squibb lopped off 33 percent, mostly in 2007 and 2008.

Meanwhile, job growth has been robust among a second tier of drug makers that have market capitalizations of $30 billion. With the exception of Amgen, which mimics big pharma with an aging product franchise, several familiar names have greatly boosted employment – Celgene, Novo Nordisk, Biogen Idec and Gilead Sciences. Overall, this group added more than 41,000 jobs during the same period.

Herceptin in India

In the latest twist involving Roche and its Herceptin breast cancer treatment in India, the drugmaker has decided to relinquish its patent rights, which opens the market to generic versions, but also precludes the possibility that the Indian government would proceed with plans to issue a compulsory license to another manufacturer.

"In the latest twist involving Roche and its Herceptin breast cancer treatment in India, the drugmaker has decided to relinquish its patent rights..."

The move comes after months of heated controversy over the price of the medication and an aggressive campaign by patient advocates to convince the government to issue a compulsory license. Herceptin, however, is just one of several recent examples in which the pharmaceutical industry has tussled with the Indian government over intellectual property rights.

Roche had, lowered the cost per dose of Herceptin to roughly $1,400 a month, but advocates complain the price is out of reach for many Indians. The pricing was part of a novel strategy to have Emcure Pharmaceutical repackage the drug for the local market. The effort was seen as a way to both lower prices and preempt a potential compulsory license, but ultimately failed, after the Indian health ministry recently moved to revoke the patents in the public interest, a highly unusual step that has been taken only twice in the past.

"We are well aware that the decision to relinquish the patent on Trastuzumab is a tactical move by Roche to avoid compulsory licensing, which would have much more serious and far-reaching implications for its plans in the Indian market," says Kalyani Menon-Sen, a feminist activist who also coordinates the Campaign for Affordable Trastuzumab (the chemical name for Herceptin) in India.

Bribery scandal in China update

The latest drugmaker to become implicated in the bribery scandal overtaking the pharmaceutical industry in China is Novartis. A former sales rep alleges the drug maker offered bribes to doctors in some hospitals to drive sales of its Sandostatin LAR medication, which is used to treat cancers of the stomach, intestine and pancreas. And Novartis acknowledged that an internal probe is under way.

The rep, who was only identified as 'Li Li,' claims she was ordered to ensure that nearly $105,000 in sales were achieved by providing about $8,000 to doctors. The bribe was purportedly suggested by a supervisor since 'Li' was having difficulty meeting targets over the past two months. She also maintained that reps were told to persuade doctors to prescribe the drug for unapproved uses.

In its defense, the drug maker says the rep began working its oncology business unit in January and was in charge of sales to major hospitals in northeastern China. The rep is reportedly seeking more than $800,000 in compensation, although Novartis plans to pursue disciplinary action if there was any misconduct or violations of its policies or Chinese law.

"This is only the latest lurid allegation to surface as a result of the bribery scandal."

This is only the latest lurid allegation to surface as a result of the bribery scandal. Recently, another whistleblower claimed that Sanofi had offered 'research grants' worth more than $275,000 to at least 500 doctors in 79 hospitals in China. The Shanghai Health and Family Planning Commission is now monitoring connections to the drug maker, the use of Sanofi drugs and any payments made.

FDA approval for GSK's HIV medication

In welcome news for GlaxoSmithKline, the FDA has approved its once-daily HIV medication that can be used by adults who have never before been treated for the virus as well as HIV patients who have attempted treatment with other medications. Known as Tivicay, the drug is an integrase inhibitor that was developed by ViiV healthcare, a joint venture between the drug maker, Pfizer and Shionogi.

The approval reflects ongoing interest by regulators in treatments that can help people who do not respond to other medications. "HIV-infected individuals require treatment regimens personalized to fit their condition and their needs," says Ed Cox, who heads the FDA Office of Antimicrobial Products. "The approval of new drugs like Tivicay that add to the existing options remains a priority" for the agency.

However, the approval raised concerns at Medicins Sans Frontieres, which worries that Tivicay pricing will be out of reach for many people in poor countries. The drug will cost about $14,000 a year. In a statement, the advocacy group charges that ViiV's policy on access is "concerning," because the drug maker indicated it would pursue a 'tiered-pricing' strategy that would limit use and sale of generic versions to only 67 countries, particularly middle-income nations.

About the author

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for the past 16 years. In addition to editing Pharmalot, he is currently an editor-at-large for Med Ad News.

Previously, he was a bureau chief for The Pink Sheet, the venerable industry newsletter, and a contributor to its sister publication, In Vivo magazine. Before that, Silverman worked as a business writer for The Star-Ledger of New Jersey, one of the nation's largest daily newspapers, where he conceived and launched Pharmalot. During his 13-year tenure, he closely followed a variety of topics of concern to those who work for, and with, drug makers – drug development; mergers and acquisitions; regulatory oversight; safety and pricing controversies, and marketing issues.

Prior to joining The Star-Ledger, Silverman spent six years at New York Newsday and previously worked at Investor's Business Daily, among other newspapers. He has a master's degree in journalism from New York University and a bachelor's degree in accounting from Binghamton University. Tethered to his laptop and Blackberry, Silverman lives in suburban New Jersey with his wife, three children, a sizeable Labrador retriever and a sneaky beagle.

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