Monthly Archives: February 2010

“It is no longer sufficient to have a patented active ingredient; companies need to demonstrate value in everyday situations with real patients against established “”gold standards.”” And many of these gold standards will soon go off patent, with more than $100bn of drugs losing protection by 2012. To survive, pharmaceutical companies need to revalue their offering and adapt their business model, commercial approach and pricing strategies, or face fierce competition from generics.
Two major dimensions drive the value of pharmaceutical offerings. The first relates to product uniqueness and this is the pharmaceutical marketer’s traditional ground. In the past, all patent-protected products were regarded as innovative (and therefore unique), including first-in-class active ingredients and me-too products. Now, payers reject this positioning, particularly in crowded therapeutic classes where generics exist. Recently, Merck & Co and Schering-Plough failed to convince payers in Italy and the UK of the uniqueness of their combination product ezetimide and simvastatin (which was already off-patent).
If uniqueness is less valued by payers, other stakeholders more sensitive to this claim will have to be targeted. Depending on the country and/or indication, companies may have to target patients. Consumers are particularly important in emerging markets, which will contribute more than half of the absolute growth in the coming years due to large out-of-pocket payments. As shown for OTC brands in the Western markets, it can be lucrative to build strong brands in the OTX area, particularly since spending power is (still) limited, driving the need for affordable products with proper formulation or packaging rather than superior outcomes. GlaxoSmithKline and sanofi-aventis are committed to the emerging markets, as evidenced through numerous acquisitions since 2008.
To build value through uniqueness among payers, the critical factor will be the superiority of the clinical profile compared to existing products on the market, particularly the gold standard. Of course, a superior clinical profile can be achieved even for off-patent active ingredients, for example through a new indication, such as thalidomide against multiple myeloma or novel drug delivery mechanisms, such as demonstrated by Ciba-Geigy/Novartis through a variety of formulations for the active ingredient diclofenac (Voltaren tablets, gels, drops etc).
The second dimension relates to the ability to compete on outcomes. Ideally, the clinical profile of unique products should translate into superior outcomes, but this is not a given. Good examples are drugs to treat rare diseases where no alternative exists. Yet even breakthrough medicines will have to stratify patients to compete on outcomes measured using cost-effectiveness analysis. Roche/Genentech has adopted the strategy first with Herceptin, targeted at breast cancer patients depending on the level of expression of the receptor tyrosine kinase HER2/neu. Were sanofi-aventis to launch Plavix today, the cytochrome P450 2C19 (CYP2C19) test would most certainly be used to exclude non-responders and drive better outcomes.
Still, for most chronic diseases, it is difficult to compete on outcomes. Lifestyle, environment and the healthcare professional treatment typically contribute more to the outcome than the drug. The pharmaceutical industry has offered compliance and disease management programmes in these areas as part of their marketing and sales efforts, by adding services around their products. Faced with payer demands, these offerings will have to evolve into integrated and monitored healthcare solutions.”

“The European Commission has contacted Pfizer as part of its antitrust investigation into patent settlements between pharmaceutical firms and generic drugmakers, according to various press accounts. Pfizer acknowledged it was among the companies involved in the probe and said it was cooperating and confident it complied with applicable laws. AstraZeneca, GlaxoSmithKline, Sanofi-aventis, Novartis, Roche, and Boehringer Ingelheim have also said they have been contacted by the Commission about drug patent settlements. The investigation is part of an effort by the EU to fight anticompetitive actions by drug makers that it says cost healthcare providers $4.4 billion between 2007 and 2008, according to Reuters.
Charles River Laboratories said that it will suspend operations at its Preclinical Services facility in Shrewsbury, Massachusetts by mid-2010 and layoff 300 employees. Suspension of operations at the facility is expected to reduce operating costs by about $25 million a year. The company expects to record charges of approximately $7 million, primarily in the first quarter of 2010. The company said it intends to resume operations when global preclinical market conditions improve and the company requires additional capacity.
The Medicines Company said it has cut 31 employees or about 10 percent of its centralized office jobs to cut costs and improve efficiency. In a filing with the U.S. Securities and Exchange Commission the company said the reductions do not affect its customer-facing functions. As a result of the workforce reduction, the company expects to record, in the aggregate, one-time charges of approximately $4 million associated with the workforce reduction, about $3 million of which is related to employee severance and about $1 million related to the closure and consolidation of its Indianapolis site.
The Lonza Group said it is will eliminate 175 jobs as it shuts three manufacturing sites as part of an ongoing restructuring announced in October. The sites being closed are ones in the United States, Canada, and the United Kingdom. At the same time, the company said it is strengthening its platform in Asia as there is economic pressure on the pharmaceutical industry to reduce costs.
The U.S. Food and Drug Administration staff is questioning a study by the Italian pharmaceutical Recordati for its experimental drug Carbaglu, a treatment of NAGS, an inherited disorder that causes ammonia to build up in the blood, Reuters reported. FDA staff noted problems with the study’s design including a lack of controls and said that clear conclusions about the effectiveness cannot be made because of the limited amount and quality of the data. The FDA will have an advisory panel review the data “

”There are strong growth predications for major Indian pharma companies from major markets of interest i.e. vaccines and generics. With the Indian regulatory authority finally issuing orders to conducts the H1N1 trials in the Indian geography today, Indian outsourcing industry is likely to occupy a “”distinct”” position and achieve a unique dimension in the next 1-2 years.
Important trends driving this growth phenomenon: Indian Pharma company sales growth and growth in net profit ( both in double digits) Biotech and particularly vaccines act as market drivers. With the Indian regulatory authorities approving the trails for H1N1 vaccine for testing in the Indian population, the vaccine trails outsourcing market to Indian CRO’s is likely to grow at double digits in the coming years Generic drugs are likely to get major boost in to the US market as “”pay for delay”” option for the branded drugs pharma companies would be under the direct scrutiny of the Federal trade commission (FTC). Patent litigations related to drugs in the US would always be beneficial for the companies which are “”first to file”” as they would be having the benefit of selling their generic drug products for the 180 day marketing exclusivity period as per the Hatch Waxman act. Government initiatives support the market : India launches Networking Pilot Programme on biotech, health with EU nations, Bangalore Bio”” re-christened as “”Bangalore India Bio”” event kicks off from June 2-4 2010, etc
The need of the hour is to capitalize on this rising market trends and tap the “”predictions”” associated with the Indian Pharma Companies in focus i.e Ranbaxy, Cipla, Dr. Reddy’s and Glenmark to name a few.”

“Prominent Indian Pharma companies are known to file ANDA applications in the USA for off patent drugs. The patent litigation is against branded drug of a pharma company which then files a counter suit depending on the nature of the litigation. The decision if in favor of the Indian Pharma allows the company to sell their generic drug in the USA for a 180day marketing exclusivity period as per the Hatch-Waxman Act. This is again is “”negotiable”” by the pharma company facing the litigation who may take the decision of Allowing the company to sell their generic product for allocated time period by the court / fight the litigation (if they are convinced of their lobbying in the court) / out of the court settlement which is the pay for delay phenomenon. This allows both the branded drug company and the Indian company to enter into a “”nexus”” where the out of court settlement offers both parties the option of a “”gain””. The branded company pays for the “”delay”” of the generic drug in its market of interest plus pays for the court settlement as well and ensures that the Indian company comes back after a “”longer”” period to sell its generic.
The pay for delay technique is now under the scanner of the federal trade commission (FTC) in the USA which plans to keep a “”tight scrutiny”” on such activities and exercise their necessary vigil in recommending to the authorities that the “”pay for delay”” tactic will not go unnoticed and any hurdle of such nature will be taken to task and efforts to block cost effective generic drugs to the masses would be dealt with severely.
The “”nexus”” of the pharma and generic drug companies is certainly under threat. ”

“The experiences of the European pharmaceutical market in the last five years have driven, and continue to drive, the pace of change – encouraging businesses that operate within this market to face up to the challenges and re-shape the ways in which they do business. Consequently, the UK supply chain continues to evolve and other European markets are now moving towards a new model, which benefits from supply chain stakeholders working closely together, to adapt to changing market forces and develop a more integrated supply chain that has a ‘pallet to patient’ approach. Like manufacturers, wholesalers have been required to respond to these market changes and evolving customer needs. One of the biggest challenges over the last few years has been successfully anticipating the pace and direction of change across the pharmaceutical sector as it takes place in each of the markets in which they operate. “

”The Drug controlling authority in India has recently placed itself into action with reference to rules and regulations related to drug safety for various off patent drugs. The Off patent drugs despite “”proven for safety”” over the years with bio equivalence studies are still going to face the regulator’s scanner. This means that adverse events all nature would have to be documented and placed for the regulator’s approval.
Drugs which are having the “”controversial “”banner label alike nimesulide and Cox 2 inhibitors are likely to face the regulators” eye because of the launch of the “”Focus Pharmacovigilance”” programme organized by the DCGI for the scrutiny of all such drugs.”

“The CRO industry in India on account of the recession and the changing scene of the lawmaker’s perspective on the emerging markets like India nad CRO’s is going through  a very dynamic pahse since the last few months of the year 2009.  The scene is expected to take defined turn  slowly as healthcare budget spends of the western world primarily the USA and Europe get their final agenda towards cost effective medicines i.e. bio equivalent generic drugs.
Generic/ off patent drugs which are proven bio equivalent to their branded counterpart are much more cost effective especillay if the their usage is for a longer period. Indian Pharma companies are known to thrive on their export grwoth to the western world with cost effective generic drugs.  Thses exported drugs are proven bio equivalent by conducting BA BE studies in an Indian CRO. This long chain of dynamic componenst influnces the Indian CRO market and pricing plya very important role in driving this market to another dimension. the need of the hour today is to understand every factor which directlly and indirectly influences the Indian CRO growth”

“Indian healthcare Companies have a clear advantage with their low cost business model. With government’s increased focus on health insurance and penetration in the rural sector, the pharmaceutical product demand in the domestic sector looks set for a rise.
The year has already borne some real positive news for the pharmaceutical industry as far as the international access is concerned. Lupin Pharma has settled issues with the US FDA and looks set to enter the market there. Even on a generic front, Indian Pharmaceutical companies might see a increased demand from its close neighbor, China has hinted at opening up the market for Indian pharmaceutical companies.
Things sure look bright for the Indian healthcare sector. Impressive earnings coupled with a promising growth both in the domestic and international markets seem suggestive of a good showing by the major healthcare players. However, the companies will have to be stringent on quality and ensure that the R&D investments don’t go overboard. “

“Veeda represented at Prime Ministers Meeting

The Prime Minister of Malaysia, The Honourable Dato Sri Najib Tun Abdel Razak visited Malaysia on the 21st and 22nd of January and held a round table meeting with leading companies and individuals involved in the promotion of Malaysian-Indian business. The meeting was organised by the Malaysian Industrial Development Corporation and the Biotech Corporation. Dr Maurice Cross, Group Medical Director of Veeda was an invited attendee at the round table meeting for selected Captains of Industry. During the meeting, Memoranda of Understanding were signed between both Dr Reddys Laboratories and also Biocon both of which are investing in new facilities in Malaysia. In his opening speech, the Prime Minister emphasised the shift in thinking from Malaysia being dependent on manufacturing towards a high value, service economy with particular prominence to the healthcare and medical research sectors as well as the development of IT related industries. Dr Cross participated in the round table meetings and also met with future Malaysian partners from the biotech industry.

The Honourable Dato Sri Najib Tun Abdel Razak, Prime Minister
of Malaysia.

The delegates assemble “