UPDATE 1-Par Pharmaceutical settles drug pricing lawsuits
Says settlement will remove major damages and trials (Follows alerts)
(Reuters) – Par Pharmaceutical Cos Inc said it settled drug pricing lawsuits against it that allegedly caused government entities to pay inflated reimbursements for $153 million.
Par was named a defendant along with other pharmaceutical manufacturers in the lawsuits brought by Ven-A-Care of the Florida Keys Inc and attorney generals of Alaska, South Carolina, and Kentucky under state law.
The lawsuits claimed that these companies reported prices which made the government entities to pay inflated reimbursements for drugs under Medicaid or other programs.
The Woodcliff Lake, New Jersey-based company denied the allegations.
The settlement will eliminate majority of damages asserted and all trials scheduled to date, the company said.
Shares of the company closed at $34.54 on Wednesday on the New York Stock Exchange. (Reporting by Kavyanjali Kaushik in Bangalore;Editing by Vyas Mohan)
FDA Panel Unanimously Recommends Approval For New Hepatitis C Drug Boceprevir
In a unanimous vote today, an advisory committee to the United States Food and Drug Administration (FDA) recommended that boceprevir be approved for treatment of hepatitis C. Boceprevir is being developed by the U.S. pharmaceutical company Merck.
The FDA is expected to make a decision on boceprevir’s approval next month. Although the FDA is not required to follow the recommendations of its advisory committees, it usually does.
Boceprevir (or Victrelis, its proposed brand name) is one of two new hepatitis C virus (HCV) drugs being evaluated by the advisory committee this week. Boceprevir and telaprevir, made by Vertex Pharmaceuticals, are both HCV protease inhibitors, which work by inhibiting HCV replication in the body. The committee will decide on a recommendation for telaprevir tomorrow.
In the U.S., approximately 30 percent of people with HIV also have HCV. People with HIV are less likely to clear HCV than uninfected individuals, and HCV treatment is less effective in people with HIV (see related AIDS Beacon news).
Both boceprevir and telaprevir are meant to supplement the current standard treatment for hepatitis C, a combination of the drugs ribavirin (Rebetol, Copegus) plus Pegasys (pegylated interferon alfa-2a) or PegIntron (pegylated interferon alfa-2b).
The advisory committee raised a number of concerns regarding the safety of boceprevir, the manufacturer’s proposed dosing schedule for the drug, and whether African-Americans need longer treatment times (African-Americans typically do not respond as well to HCV treatment).
Nevertheless, the committee decided that the safety concerns – primarily involving anemia and related blood problems – were manageable and that its efficacy warrants FDA approval.
The committee was split on whether the drug should be recommended for so-called “null responders,” people with HCV who have only a minimal response to standard treatment. They were also split on whether certain populations, such as African-Americans, should take boceprevir longer.
In both cases, many panel members decided there was not enough information and recommended additional studies be conducted in null responders and African-Americans.
Supreme Court Justices Question Vermont Law Barring Rx Data Access
Vermont Law
Pharmacies are required by law to collect and maintain files about each prescription they fill and then can sell that information — including the prescribing doctor’s name and address, and the amount of drug prescribed — to data collection firms. Patient information is not included in the data.
The data mining firms then sell that information to drugmakers, which use it to market products to doctors.
A Vermont law requires doctors to grant consent before their prescribing information is sold and used for marketing.
Proponents of the law argue that it correctly prevents the commercial use of private health treatment decisions and protects physician privacy. Opponents believe it infringes upon freedom of speech protections in the First Amendment (iHealthBeat, 4/25).
The Vermont law permits other uses of the data, including by law enforcement, insurance companies and journalists. Drug companies also can continue to market directly to physicians but cannot use specific prescribing information to do so (Liptak, New York Times, 4/26).
Lawsuit Details
Three data collection firms — including IMS Health and the Pharmaceutical Research and Manufacturers of America — challenged the law.
A federal district court in Vermont initially upheld the statute, but an appellate court reversed the decision in November 2010. Vermont Attorney General William Sorrell (D) later petitioned the Supreme Court (iHealthBeat, 4/25).
Justices Weigh In
During arguments on the law, some justices indicated that the law is troubling because it appears to restrict brand-name drugmakers while sparing the state government, insurers or others that might favor cheaper generics (AP/San Francisco Chronicle, 4/26).
In developing the law, Vermont’s Legislature said there is a “massive imbalance in information presented to doctors” and “the marketplace for ideas on medicine safety and effectiveness is frequently one-sided.”
Some justices suggested that the point of the law was to protect doctors from hearing marketing pitches for more expensive drugs.
Chief Justice John Roberts said, “You want to lower your health care costs, not by direct regulation, but by restricting the flow of information to the doctors. To use a pejorative word, [the state is] censoring what [doctors] can hear to make sure they don’t have full information.”
Justice Ruth Bader Ginsburg noted that Vermont “is interested in promoting the sale of generic drugs and correspondingly to reduce the sale of brand-name drugs.” However, she added, “You can’t lower the decibel level of one speaker so that another speaker, in this case the generics, can be heard better” (New York Times, 4/26).
Justice Antonin Scalia said the purpose of the law is to make the marketing practices of pharmaceutical companies “less effective.”
Officials Defend Law
Vermont Assistant Attorney General Bridget Asay responded that “the purpose of the statute is to let doctors decide whether sales representatives will have access to this inside information” on the prescribing habits of physicians.
Alexion Pharmaceuticals: Expanding Markets Point to Bigger Profits
Biotechs are increasingly trying to boost drug pipelines by targeting rare diseases. Why? Because treatments command higher prices and generate bigger profits. One company buidling a billion dollar business in rare diseases is Alexion Pharmaceutical (ALXN).
Soliris, which accounts for all of Alexion’s revenue, treats PNH, an ultra-rare blood disease which damages red blood cells and vital organs. The market is small — affecting one to five of every million people — but lucrative, with Q1 net sales rising 41% to $166.1 million. Despite being approved in the U.S. and EU in 2007, Soliris’ momentum remains strong, with the company posting greater than 30% revenue and 25% earnings growth in every quarter since at least June 2009.
And this revenue is translating into robust cash flow, given that PNH is a chronic disease with the average person living 10-15 years following diagnosis. For 2011, Alexion is guiding for $2.28 per share in earnings, 28% higher than 2009. In 2012, the street expects earnings to expand an additional 33% to $3.04.
Expanding Soliris into new countries provides upside, but even greater opportunity exists in gaining approval to treat other diseases. In April, Alexion filed U.S. and EU Marketing applications for Soliris in the treatment of aHUS, an ultra-rare blood disease damaging kidneys, the heart and other vital organs.
Why is aHUS an important market for Alexion? Because 60% of aHUS patients require dialysis and/or a kidney transplant, or die within a year of diagnosis. Of those receiving donor kidneys, 90% experience failure. Like PNH, aHUS isn’t common, affecting about one in 500,000 in the U.S. But, given the nature of the disease and its prognosis, ALXN is modeling for priority review, which means a potential launch by year-end and significant sales upside in 2012 and 2013.
Additionally, Alexion is planning a study on the use of Soliris in treating Acute Humoral Kidney Rejection (AHR) in patients at elevated risk of antibody mediated rejection – another rare and potentially lucrative market. AHR occurs in about 20-30% of acute kidney rejections, with acute rejections occurring in 10-30% of all kidney transplants. It’s a small market, but another avenue of sales and profit growth, given there were 16,000 kidney transplants in the U.S. alone in 2008.
Alexion is also deploying its cash flow to expand its pipeline. In Q1, it acquired two developmental biotech companies: Taligen Therapeutics and Orphatec Pharmaceuticals. Taligen is a pre-clinical company seeking to treat ophthalmic diseases including age-related macular degeneration, which affects about 30% of those 75 or older, according to NIH. Orphatec has potential in treating an ultra-rare genetic disorder, MoCD Type-A, a fatal genetic deficiency fatal to newborns and currently untreatable.
The company boosted its guidance to $720-740 million for 2011 from $715-735 million, and has beaten the street in each of the past four quarters. Given Alexion’s balance sheet, with $348 million in cash exiting Q1, its strengthening cash flow and possibility of label expansion, Alexion offers investors a significant amount of future growth.