‘Too big to care’: Sweep­ing law­suit ac­cus­es Te­va of col­lud­ing with oth­er gener­ic mak­ers to keep prices high

Te­va has been ac­cused of be­ing a ring­leader in a mas­sive price-fix­ing con­spir­a­cy along­side 19 oth­er gener­ic drug­mak­ers in the US, caus­ing price spikes of as much as 1000% from 2013 to 2015, ac­cord­ing to an an­titrust law­suit filed by 44 states.

The law­suit, which al­so names 15 in­di­vid­u­als, is the sec­ond to be filed in an “on­go­ing, ex­pand­ing in­ves­ti­ga­tion” on the gener­ic drug in­dus­try — “the largest pri­vate sec­tor cor­po­rate car­tel in his­to­ry” ac­cord­ing to Con­necti­cut at­tor­ney gen­er­al William Tong. Un­der his pre­de­ces­sor, the state teamed up with a few­er num­ber of states in 2016 to sue some of the same com­pa­nies over two drugs. To­day, the list has grown to 114.

And count­ing. A Con­necti­cut pros­e­cu­tor lead­ing the probe told the Wash­ing­ton Post in De­cem­ber that his team is now look­ing at 300 drugs.

William Tong

While the gener­ic drug mar­ket was de­signed to bring pre­scrip­tion prices down, the ac­cused com­pa­nies — My­lan, Glen­mark, San­doz, Ac­tavis and the like — con­sis­tent­ly co­or­di­nat­ed among them­selves to keep them up for a big­ger prof­it, pros­e­cu­tors al­leged.

Their scheme, in a nut­shell:

Rather than en­ter a par­tic­u­lar gener­ic drug mar­ket by com­pet­ing on price in or­der to gain mar­ket share, com­peti­tors in the gener­ic drug in­dus­try would sys­tem­at­i­cal­ly and rou­tine­ly com­mu­ni­cate with one an­oth­er di­rect­ly, divvy up cus­tomers to cre­ate an ar­ti­fi­cial equi­lib­ri­um in the mar­ket, and then main­tain an­ti­com­pet­i­tive­ly high prices. This ‘fair share’ un­der­stand­ing was not the re­sult of in­de­pen­dent de­ci­sion mak­ing by in­di­vid­ual com­pa­nies to avoid com­pet­ing with one an­oth­er. Rather, it was a di­rect re­sult of spe­cif­ic dis­cus­sion, ne­go­ti­a­tion and col­lu­sion among in­dus­try par­tic­i­pants over the course of many years.

To make mat­ters worse, the law­suit stat­ed in brief sec­tions ti­tled “spo­li­a­tion of ev­i­dence” and “ob­struc­tion of jus­tice,” com­pa­ny ex­ecs be­gan talk­ing to each oth­er and delet­ing texts and emails once they learned about the in­ves­ti­ga­tion.

As gener­ics ac­count for 90% of pre­scrip­tions dis­pensed in the US, this is an is­sue that af­fects every Amer­i­can, Tong said in an in­ter­view with CBS60 Min­utes. For a vi­su­al il­lus­tra­tion, he raised a bot­tle of doxy­cy­cline, an an­tibi­ot­ic he takes dai­ly. The drug is one of many whose prices in­creased over the past years due to the scheme, mak­ing him “one of the vic­tims.”

Bill Whitak­er

The ef­fect of that, he said in re­sponse to a ques­tion from Bill Whitak­er, is “dev­as­tat­ing.”

“It af­fects health in­sur­ance pre­mi­ums and health in­sur­ance plans. It im­pacts Medicare and Med­ic­aid,” he told the host. “And it is a chain re­ac­tion that dri­ves up the price of Amer­i­can health­care to un­nat­ur­al heights.” He went on to say the com­pa­nies were “too big to care.”

Te­va, which saw its shares $TE­VA drop 13% to $12, de­nied the al­le­ga­tions, as did Pfiz­er, ac­cord­ing to state­ments quot­ed by Reuters and the New York Times. Mean­while, No­var­tis vowed to “vig­or­ous­ly con­test” the claims against San­doz.

Vamil Di­van of Cred­it Su­isse sees the com­plaint — re­gard­less of the mer­its of the case — read­ing neg­a­tive­ly for Te­va, as it might lead to some sort of fi­nan­cial set­tle­ment. But it would be “man­age­able” for the com­pa­ny even as it strug­gles with plung­ing rev­enue and de­clin­ing stock, tak­ing in­to con­sid­er­a­tion “the im­por­tant role gener­ic drugs play in man­ag­ing drug spend­ing in this coun­try, as well as Te­va’s cur­rent debt load.”

The As­so­ci­a­tion for Ac­ces­si­ble Med­i­cines, an in­dus­try lob­by­ing group, re­spond­ed to the 60 Min­utes seg­ment by re­it­er­at­ing its gen­er­al con­dem­na­tion of il­le­gal be­hav­iors but em­pha­siz­ing the sav­ings that gener­ics bring com­pared to their brand­ed coun­ter­parts.

“To­day’s gener­ic drug in­dus­try is char­ac­ter­ized by in­tense com­pe­ti­tion,” the state­ment read. “As a re­sult, pric­ing da­ta from the last three years in­di­cate that gener­ic prices have de­clined over­all and saved pa­tients and tax­pay­ers lit­er­al­ly bil­lions of dol­lars com­pared to brand-name drug prices.”

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus — chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

“To be out of cardiovascular and diabetes is not easy for a company like ours with an incredibly proud history,” Hudson said on a call with reporters, according to the Wall Street Journal. “As tough a choice as that is, we’re making that choice.”

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De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

De­sert­ed by Astel­las and Mer­ck, lit­tle Cor­re­vio still can't win over FDA pan­el over safe­ty con­cerns for its AFib drug

When the FDA spurned Astellas’ pitch for atrial fibrillation drug vernakalant in 2008, regulators made it abundantly clear that it wasn’t the efficacy they had a problem with — two Phase III trials had shown the drug successfully restored 52% of patients’ heartbeat from irregular to normal — but the cardio safety issues for a drug that was to compete with well established, low-risk options. One licensing deal, one clinical hold and several studies later, the chances of approval aren’t looking any better.

New trade deal knocks out long-sought patent pro­tec­tions for drug­mak­ers

House Democrats negotiating with the Trump Administration on a new North American trade deal settled early on four issues: enforcement, labor and environmental standards and drug pricing.

On drug pricing, Politico reports, Trump crumbled within weeks of heightened negotiations.

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With loom­ing su­per­bug cri­sis, Iterum miss­es in a key an­tibi­ot­ic tri­al — and its shares tum­ble

A raft of antibiotic makers have crashed and burned recently despite getting their drugs across the finish line. Iterum Therapeutics hopes that its lead drug sulopenem, which has an outpatient focus in addition to hospitals and a plan to target areas with the highest levels of drug-resistant infections, will avert some of those reimbursement challenges. However, the company has now stumbled in a late-stage study, diminishing its shot at FDA approval it first requires.

UP­DAT­ED: Lit­tle Leo Phar­ma en­ters the prize-fight ring with pos­i­tive PhI­II atopic der­mati­tis da­ta. Now they just have to beat Dupix­ent

A day after new Sanofi CEO Paul Hudson staked his reputation and the future of the pharma giant on making Dupixent a megasuccess story, little Leo Pharma is throwing down the gauntlet on atopic dermatitis.

Three years ago Leo paid AstraZeneca $115 million to buy up rights to use tralokinumab against atopic dermatitis — with $1 billion more on the table in milestones — the Danish company says their drug has swept up positive results for all primary and secondary endpoints in three Phase III trials. Now they plan to start the final push for regulatory approvals so they can challenge the heavyweight champions in this slugfest.

Paul Hudson, Sanofi

Paul Hud­son promis­es a bright new fu­ture at Sanofi, kick­ing loose me-too drugs and fo­cus­ing on land­mark ad­vances. But can he de­liv­er?

Paul Hudson was on a mission Tuesday morning as he stood up to address Sanofi’s new R&D and business strategy.

Still fresh into the job, the new CEO set out to convince his audience — including the legions of nervous staffers inevitably devoting much of their day to listening in — that the pharma giant is shedding the layers of bureaucracy that had held them back from making progress in the past, dropping the duds in the pipeline and reprioritizing a more narrow set of experimental drugs that were promised as first-in-class or best-in-class.  The company, he added, is now positioned to “go after other opportunities” that could offer a transformational approach to treating its core diseases.

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Otello Stampacchia. Omega Funds

Af­ter sev­er­al high pro­file start­up launch­es, om­niv­o­rous Omega Funds clos­es $438M fund to pur­sue more deals

Omega Funds likes to work backwards. It invests with the end game — denoted by the Greek letter in its name — in mind, and it keeps tabs on the number of marketed medical products that culminate from its ventures: 37 in 16 years.

So when founder and managing director Otello Stampacchia declares it’s the most exciting time to be investing in life sciences in a generation, it’s perhaps only natural that Omega has closed its largest fund to date. With $438 million in total commitments for Fund VI, the firm will continue injecting capital into a broad swath of companies across the US and Europe.

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Janet Woodcock (Credit: CQ Roll Call/AP)

For­eign drug in­spec­tions de­cline as FDA hir­ing strug­gles con­tin­ue

The US reliance on imported pharmaceuticals and ingredients is rising as foreign drug facility inspections decreased by about 10% from 2016 to 2018. Part of the reason for the decline: The US Food and Drug Administration (FDA) said it’s still struggling to hire new inspectors.

Testifying before a House subcommittee on Tuesday, Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, defended the agency’s approach and discussed some of the vulnerabilities of its foreign inspection program. She said FDA is looking to hire 50 new inspectors, but there are difficulties.