Pharma news highlights: GSK, Lilly, the FDA and more

Ed Silverman

Pharmalot

Ed Silverman shares his views on the latest pharma news highlights around the globe – from GSK signing the AllTrials data transparency campaign to Lilly’s patent losses in Canada.

(Continued from “Pharma news highlights: lawsuits and recalls”)

And so, another month has passed that was brimming with interesting developments in the pharmaceutical world. One story, in particular, gained considerable notion because it highlighted the contentious issue of executive compensation. In this instance, the episode involved a $72 million payout over six years as part of a non-compete agreement that Novartis signed with outgoing chairman Dan Vasella, who has regularly been criticized for his outsized pay.

The board, however, agreed to this latest deal as a way to ensure Vasella did not reveal secrets to rivals. The agreement was made to “protect” the drugmaker and Vasella was required to “refrain from making his knowledge and know-how available to competitors who may take advantage of his experience with the company. Dr. Vasella knows the company’s business intimately, having built the leading R&amp,D organization and personally recruited most of the top executives,” Novartis said.

Not surprisingly, this generated grimaces and guffaws. In effect, Vasella would be paid as much as $1 million a month over six years for not doing anything and, of course, keeping his mouth closed. This is a princely sum by most any measure, but especially given that, over the past 18 months or so, Novartis began the process of closing facilities and eliminating thousands of jobs to meet financial goals.

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“The payout was canceled in response to the outrage, but it may take time to repair the damage done to the credibility of the Novartis board.”

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The payout was canceled in response to the outrage, but it may take time to repair the damage done to the credibility of the Novartis board. In Switzerland, where the drugmaker is headquartered, a referendum is about to be held on a proposal look to level the playing field by giving citizens a chance to decide whether shareholders should have more say in executive compensation.

As for Vasella, he knew from the start that the $72 million payout would be controversial and so he attempted to assuage critics by offering to funnel the money to philanthropic activities. Yet he failed to display a sense of fiduciary, since he is still chairman. Instead of renouncing the money or accepting a much smaller sum, he was about to give away shareholder funds.

GSK signs AllTrials data transparency campaign

In an unusual development, one day after the Pharmaceutical Research &amp, Manufacturers of America trade group in the US harshly criticized a call to release patient-level data, GlaxoSmithKline issued a statement in support of the idea. The Glaxo missive came four months after the drugmaker declared a new openness in response to a scandal over data disclosure that contributed to a $3 billion settlement with the US government last year.

The differing postures center on a petition drive that was recently spearheaded by several organizations, including a charitable trust in the UK, and BMJ, the leading medical journal that recently vowed to no longer publish studies unless relevant patient level data available. Specifically, the AllTrials campaign calls for registering clinical trials, disclosing trial results and clinical study reports. So far, some 30,000 people have signed the online petition.

The PhRMA trade group blasted the idea of releasing patient-level data and singled out BMJ and Ben Goldacre, a physician and journalist who recently wrote a book called ‘Bad Pharma,’ and has been promoting the AllTrials campaign. There was, however, no mention of Glaxo, which is a member. “The demands… to release patient-level clinical trial data are irresponsible with potentially harmful consequences for future medicine development,” PhRMA barked.

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“…the AllTrials campaign calls for registering clinical trials, disclosing trial results and clinical study reports.”

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For its part, Glaxo did not address the PhRMA criticism specifically, but reiterated a pledge announced last fall to release data. Glaxo plans to publish case study reports for all of its drugs once they have been approved or discontinued from development and the results have been published. Glaxo will also publish reports for all approved medicines dating back to its formation, but confidential patient information will be removed.

The drugmaker is also creating an independent panel of experts who will review requests from outsider researchers who want to examine trial data. The approved requests will then be placed on a secure web site. The drug maker plans to release the names of the panel members shortly.

Call for tougher clinical trial legislation

On a related note, the lead legislator for the Environment, Public Health and Food Safety Committee in the European Parliament wants to toughen proposed legislation that is designed to bolster clinical trial practices and activities on the continent. And one of her suggestions is already meeting with some resistance from the pharmaceutical industry.

Specifically, lead legislator Glenis Willmott wants full clinical studies – not summaries – to be submitted and, therefore, available for disclosure. “Your rappoteur is the opinion that a sample summary of the results from the sponsor does not go far enough, as it could be biased or misleading,” she writes in a statement released late last week. Rappoteur is the lead legislator on a bill, Willmott is from the UK.

In her view, company data can be protected in line with existing measures, although drug makers continue to raise concerns that trade secrets could be compromised. In fact, the Association of British Pharmaceutical Industry issued a statement saying that, “if the entire file with all studies is released other companies can get approvals around the world. Anyone can get an approval as long as they submit the necessary data.”

Nonetheless, Willmott is adamant and proposes to fine drugmakers that do not submit all pertinent clinical trial information to a database within one year. And she also believes that all data should be archived indefinitely, instead of the five-year period proposed by the European Commission. “Should a sponsor come under investigation for misconduct, the clinical trial master file would be vital,” she writes.

Lilly’s patent losses in Canada

After a series of losses in Canadian courts over patents for several key drugs, Eli Lilly chief executive officer John Lechleiter is threatening to move operations out of the country. The defeats over the patents for the Strattera ADHD drug, the Zyprexa antipsychotic and the Evista osteoporosis treatment have cost Lilly more than $1 billion in revenue and prompted some 280 jobs cuts since 2006, leaving the drugmaker with about 500 employees in Canada.

“If that sort of pattern persists, it’s not a question of would we stay in Canada, it’s a question of would we have any business in Canada,” Lechleiter told a meeting of the editorial board at The Globe and Mail newspaper, which is based in Toronto. He added that other drug makers are in a similar situation and warned of “very real economic consequences for Canada.”

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“…its efforts – researching medicines and providing jobs – are worth the extended patent protection…”

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His remarks come two months after Lilly filed a challenge under the North American Free Trade Agreement and demanded $100 million in compensation because Canadian courts invalidated its Strattera patent. Lilly maintains the court decisions violated Canadian obligations under NAFTA and other trade agreements, which allowed generic rivals to challenge its patents. The move alarmed consumer advocates.

Lechleiter charged that it is unfair for Canadian judges to strike down patents for failing to include sufficient testing results in the original applications that were filed years ago, the Globe and Mail reported. The Lilly CEO also maintained that judges are demanding much more proof that the proposed drugs will work than is required in most other developed countries, which violates various treaties, including NAFTA, according to the paper.

Some backdrop: the pharmaceutical industry has waged a campaign to convince Canadians that its efforts – researching medicines and providing jobs – are worth the extended patent protections that are being sought in a trade agreement with the European Union. An EU proposal would add an average life of 2.66 years to a typical drug patent, and increase Canadian drug costs by between $795 million and $1.95 billion annually. Drugmakers argue they have contributed at least $3 billion to the Canadian economy and support some 46,000 jobs.

GSK to fight UK lawsuits

Although GlaxoSmithKline agreed to settle lawsuits filed in the US by people who claimed they were harmed by the controversial Avandia diabetes pill, which was linked to heart attacks and strokes, the drugmaker is reportedly refusing to adopt the same approach in the UK. Instead, Glaxo is preparing to fight at least four complaints that have so far been filed in court.

In the US, Glaxo paid hundreds of millions of dollars to settle Avandia lawsuit, and the drug maker last year paid $3 billion to resolve criminal and civil charges in connection with off-label promotion of several drugs, reporting false prices and failing to report safety data concerning Avandia.

The Glaxo decision should not come as a surprise, though. In the UK, patients have generally walked away with smaller compensation and legal sparring can drag on for a long time. It has become “increasingly difficult in the UK to challenge large corporations such as pharmaceutical companies, an incredibly expensive form of litigation,” Liz Thomas, policy manager at the patient safety charity Action against Medical Accidents, told The Guardian.

For this reason, Merck took a similar approach after withdrawing its Vioxx painkiller, which was also linked to heart attacks and strokes, and later reaching a $4.8 billion deal to settle thousands of lawsuits filed in the US. At the time, the drug maker refused to settle cases in 18 other countries and, in the UK, drew the wrath of several members of Parliament.

Long-awaited Sunshine Act rule released

And finally, the US Centers for Medicare &amp, Medicaid Services finally released the long-awaited Sunshine Act rule, which establishes procedures for gathering and publishing data containing financial ties between physicians, teaching hospitals and drug and device makers, as well as group purchasing organizations.

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“The rule was created to address rising concerns that financial relationships may influence medical research…”

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The rule was created to address rising concerns that financial relationships may influence medical research and practice and its release is a big step toward achieving transparency, a hot-button issue in the pharmaceutical industry.

The rule requires drugmakers to post payments exceeding $10 to physicians and teaching hospitals on their websites concerning consulting fees, food and beverages and research payments. The data to be posted would also include all ownership or investment interests held by a doctor or family member. Penalties for violations can range up to $150,000 annually for failing to report data and $1 million if a company knowingly fails to report the information.

The final version largely resembles earlier drafts, although there is one notable change. Drugmakers will not be required to report payments to speakers at accredited continuing medical education events as long as they do not select the speakers or directly pay them. CMS officials believe that indirect payments do not need to be reported under specific circumstances.

The next ‘Pharma news highlights’ will be published in March 2013.

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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.

What are your thoughts on this month’s pharma news?