‘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.”

Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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