In record-set­ting set­tle­ment, No­var­tis’ San­doz unit ad­mits guilt in con­spir­a­cy to fix prices

Be­com­ing the largest drug­mak­er to plead guilty in a wide-rang­ing Jus­tice De­part­ment gener­ics probe, No­var­tis ad­mit­ted to price-fix­ing charges and agreed to a record-set­ting set­tle­ment.

No­var­tis’s gener­ics unit, San­doz, has agreed to pay $195 mil­lion to set­tle crim­i­nal charges that from mid-2013 through mid-2015 it con­spired with com­peti­tors to ar­ti­fi­cial­ly in­flate drug prices on crit­i­cal med­i­cines. The com­pa­ny ad­mit­ted guilt and said the con­spir­a­cy af­fect­ed over $500 mil­lion in sales. The fine is the largest ever paid out in a do­mes­tic an­titrust agency, the Jus­tice De­part­ment said.

San­doz is now the third and largest phar­ma­ceu­ti­cal com­pa­ny to ad­mit guilt in a fed­er­al probe that be­gan in 2014 and has swept up the gi­ants of gener­ics, in­clud­ing My­lan and Te­va Phar­ma­ceu­ti­cals. The drugs af­fect­ed in­clud­ed those for cys­tic fi­bro­sis, arthri­tis and blood pres­sure, ac­cord­ing to the Jus­tice De­part­ment.

Her­itage Phar­ma­ceu­ti­cals and Ris­ing Phar­ma­ceu­ti­cals re­solved their cas­es with sim­i­lar agree­ments.

“To­day’s res­o­lu­tion, with one of the largest man­u­fac­tur­ers of gener­ic drugs, is a sig­nif­i­cant step to­ward en­sur­ing that prices for gener­ic drugs are set by com­pe­ti­tion, not col­lu­sion, and root­ing out an­titrust crimes that cheat­ed Amer­i­can pur­chasers of vi­tal med­i­cines,” US Jus­tice De­part­ment an­titrust at­tor­ney Makan Del­rahim said in a state­ment.

The set­tle­ment comes a month af­ter for­mer San­doz ex­ec­u­tive Hec­tor Ar­man­do Kel­lum plead­ed guilty to a price-fix­ing charge. No­var­tis said the ex­ec­u­tives im­pli­cat­ed in the case are no longer em­ployed at the com­pa­ny and that as part of the agree­ment, they will con­tin­ue to co­op­er­ate with the gov­ern­ment’s in­ves­ti­ga­tion and work to en­hance their com­pli­ance pro­to­cols.

“We take se­ri­ous­ly our com­pli­ance with an­titrust laws, and in reach­ing to­day’s res­o­lu­tion, we are not on­ly re­solv­ing his­tor­i­cal is­sues but al­so un­der­scor­ing our com­mit­ment to con­tin­u­al­ly im­prov­ing our com­pli­ance and train­ing pro­grams and evolv­ing our con­trols,” San­doz pres­i­dent Car­ol Lynch said in a state­ment. “We are dis­ap­point­ed that this mis­con­duct oc­curred in the face of our clear an­titrust com­pli­ance poli­cies and mul­ti­ple train­ings – and in full con­tra­ven­tion of the com­pa­ny’s val­ues.”

The res­o­lu­tion comes amid the lat­est of sev­er­al bad head­lines for No­var­tis. Last week, af­ter the Amer­i­can So­ci­ety of Reti­na Spe­cial­ists is­sued a warn­ing to its mem­bers that the Swiss com­pa­ny’s new eye med­i­cine Beovu could cause dan­ger­ous in­flam­ma­tion, a law­suit came to light in which a No­var­tis em­ploy­ee claimed she was fired for rais­ing those safe­ty con­cerns when the drug was in de­vel­op­ment. That fol­lowed a da­ta in­tegri­ty scan­dal at their gene ther­a­py sub­sidiary AveX­is and ques­tions about the com­pa­ny’s one-year con­tract with Don­ald Trump’s for­mer at­tor­ney Michael Co­hen.

To­day’s set­tle­ment is what’s known as a de­ferred pros­e­cu­tion agree­ment. These agree­ments have be­come pop­u­lar with pros­e­cu­tors in their pur­suit of gener­ics, be­cause they al­low com­pa­nies to con­tin­ue op­er­a­tions, en­sur­ing pa­tients don’t see a short­age in drugs or a change in price.

San­doz, whose $10 bil­lion in an­nu­al sales ac­count for near­ly one fifth of No­var­tis’ rev­enue, is the first high-pro­file gener­ics mak­er to set­tle with the Jus­tice De­part­ment. Gener­ics mak­ers have faced in­creas­ing scruti­ny from the Jus­tice De­part­ment and states at­tor­ney gen­er­al in re­cent years, as prices have fall­en and tight­ened mar­gins for even the most suc­cess­ful com­pa­nies.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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Doug Giordano might have some thoughts on how that could work out.

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BiTE® Plat­form and the Evo­lu­tion To­ward Off-The-Shelf Im­muno-On­col­o­gy Ap­proach­es

Despite rapid advances in the field of immuno-oncology that have transformed the cancer treatment landscape, many cancer patients are still left behind.1,2 Not every person has access to innovative therapies designed specifically to treat his or her disease. Many currently available immuno-oncology-based approaches and chemotherapies have brought long-term benefits to some patients — but many patients still need other therapeutic options.3

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In February, Novartis announced that an application for their much-touted multiple sclerosis drug ofatumumab had been accepted and, with the drug company cashing in on one of their priority review vouchers, the agency was due for a decision by June.

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Cameron Durrant, Humanigen CEO (Columbia University Technology Ventures via YouTube)

Cameron Dur­rant hus­tled his way from the OTC side­lines right in­to the Covid-19 drug race. Death or glo­ry lies straight ahead

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The White House-led initiative designed to bankroll development to bring a vaccine to the American public by this fall — Operation Warp Speed — has via BARDA handed a meaty contract to the maker of an FDA-licensed anthrax vaccine to open up its manufacturing apparatus to shore up production of Covid-19 vaccines.

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