But what’s good for Ranbaxy has been causing some discomfort for FDA. Whistleblowers from FDA’s Center for Devices and Radiological Health have sued the agency over allegedly being harassed and dismissed after publicly questioning the agency’s approval methods for devices. The suit brought by the whistleblowers alleges, among other things, that FDA improperly read private emails to support a case for dismissing the plaintiffs. This prompted a letter to FDA commissioner Margaret A. Hamburg from Senator Charles Grassley, in which he castigates the agency for perceived mistreatment of the whistleblowers, and includes a series of questions for the agency to answer to clarify their actions with respect to email monitoring.

Among the questions to the agency, Grassley asks “What steps have you taken to reassure employees that they have a right to direct communications with Congress?” The answer to that question is an important one. FDA should expect no less from itself with respect to whistleblower protection than it demands of others.

As a doctoral student at Harvard Medical School, Moshe Pritske was asked to recreate a method of culturing embryonic stem cells that had been reported by researchers in the United Kingdom. He tried following the steps in a related article but could not get the experiment to work, so he ended up flying to the UK to spend time with the scientists who authored the article to watch how they conducted the experiment. With a first-hand look, Pritsker was able to replicate the method—but not everyone has the resources to fly around the world to get an in-person perspective on a particular lab’s methods.
Based on that experience, Pritsker, along with Nikita Bernstein and Klaus Korak, founded the Journal of Visualized Experiments (JoVE). The site provides step-by-step video demonstrations of experimental techniques and procedures. The site was established in 2006 and today, contains many detailed descriptions of advanced research methods through videos. Each video is published together with a peer-reviewed article to explain the video’s scientific quality, applicability, and technical details.

To date, Harvard, MIT, Yale, Oxford, Cambridge, Max Planck, and others have participated in the online journal. About 50 video articles are published per month.

Although journal articles and training workshops provide scientists with insight into how others do something, not every step comes across. “Even if they had the time, experimenters would probably not bother to document many of these nuances or tricks because they are a personal habit or established practice at the lab they are working at,” says JoVE about why the site is useful.  And yet, “these details can often mean the difference between success and failure,” JoVE adds.

The industry has been talking about the idea of sharing information for some time. JoVE offers a new way to help share best practices and to help train train those new to the laboratory or new to certain manufacturing methods.

On Jan. 4, 2012, the HealthCare Institute of New Jersey (HINJ) published a press release which evaluated the results of the 2011 biopharmaceutical and medical technology economic impact survey, a study (conducted by Deloitte) which concluded that the life-sciences industry continued to make up a key sector of New Jersey’s overall economy.

Although the responses of five fewer companies—24 in the 2010 survey compared to 19 the following year—generated less meaningful findings for the most recent survey, HINJ President and CEO Dean J. Paranicas pointed to the strong continued growth in New Jersey’s bio/pharmaceutical sector. “Although we had 20% fewer companies participating in this year’s survey, those that did supply data demonstrate that the life-sciences industry continues to be a major economic driver in New Jersey,” said Paranicas. “However, New Jersey continues to face stiff competition from around the world and within the US for our industry’s investment. If anything, this data reinforces the need for our leaders in Trenton and Washington to continue to pursue policies that create a more competitive and attractive business climate here, and we look forward to continuing to work with them to achieve this objective.”

The study also cited (factoring in the decrease in participation) a total economic impact from reporting HINJ member companies of $24.2 billion in calendar year 2010, as compared to $29.3 billion in calendar year 2009.

Paranicas went on to laud the recent actions taken by Governor [Chris] Christie and the state legislature to make New Jersey more competitive and attractive for life-sciences investment. They include an aggressive and competitive business recruitment and retention program, adopting the single sales factor as the basis for calculating New Jersey’s corporate business income tax, and enhancing the Business Employment Incentive Program (BEIP) to promote greater private sector collaboration with New Jersey’s universities and colleges.

However, every rose has its thorn. The study pointed out that the number of full-time employees decreased from 55,366 in 2009 to 51,619 in 2010, and capital spending dwindled from $1.5 billion to $0.9 billion during that same span of time. The Whitehouse Station, New Jersey-based Merck & Co. announced the elimination of approximately 13,000 jobs following the second quarter of 2011 as part of a cost-cutting initiative. This continues a workforce-reduction trend for Merck in recent years. According to a July 30, 2011, article from The Wall Street Journal, “[Merck] will have eliminated about 30% of the work force it had at the end of 2009, in the wake of its $41.1-billion acquisition of Schering-Plough.”

This reflects the long-growing trend among the industry’s financially dominant companies. Expansion in the form of mergers and acquisitions (M&A), without a focused emphasis on R&D to maintain and add to a workable pipeline, will enable access to only a finite amount of prosperity constructed on a delicate foundation of borrowed time. Paranicas pointed out that global R&D spending increased by $6.1 billion—one of the factors that has contributed to the continued success of New Jersey’s biopharmaceutical sector, despite some overexpansive M&A miscalculations, and the consequences as a result.

2012 will be a transition year for pharma, one of the most important in the industry’s history of product cycles that spin from plenty to penury. On the positive side, the fires of drug discovery are finally being stoked by a growing understanding of how genomics shape the biology of disease. This is leading to promising new treatments that target critical areas of unmet medical need while also increasing the efficacy of interventions geared to the individual patient. Evidence that these next-generation innovations can advance the science while improving outcomes will hopefully lead to ready acceptance in the market, despite the growing leverage of a much more skeptical and discerning customer base.

The challenge is that many new treatments may not complete the move from ‘bench to bedside’ in time to plug the yawning revenue gap from a second record year of patent expiries. This year’s drop off the patent cliff is the longest and steepest, with a $50 billion loss coming on top of the $30 billion ceded to generics in 2011. Most companies will struggle to play catchup, with margins under intense pressure due to the immediate fallout from genericization of the product base; in the U.S. alone, off-patent penetration has reached 80 percent of all scrip, and IMS forecasts this figure will rise to 86 percent by 2015.

Meanwhile, the fiscal crisis in Europe has voided the entire concept of patenting as a reward for innovation in providing a temporary period of price exclusivity. Therapeutic reference pricing is clustering brands with the cheapest generics, and some countries in the region are now moving toward a straight bulk procurement model for drugs reimbursed through state-sponsored systems. Quality? Innovation? These are yesterday’s questions.

So what is the preferred Big Pharma strategy to manage through this year of transition? Pharm Exec highlights four strategic drivers that should compel the attention of our “C-suite” readers in 2012.

1) A reinvented business model won’t change what is fundamental: Higher pipeline productivity in the form of new patented products is still the best source of future profits.
This year will see new therapeutic breakthroughs that may revitalize the blockbuster, to include biologic drugs intended for targeted patient populations with few treatment alternatives. Many are novel not only for their indications and superior efficacy and safety profiles; they also mark an advance in the mode of delivery, replacing injectables with a once-a-day pill or acting in combination with other compounds to provide more precise dosing with fewer side effects.

Overall, the trend illustrates the impact of company efforts to integrate within their R&D organizations a more overt commercial benchmark in addition to science and regulatory indicators. If trial and regulatory milestones are an ingrained part of the development timeline, why not add criteria for achieving access or reimbursement as well? Few companies today are inclined to say no.

Growing optimism about a return to innovation doesn’t mean that the debate over the best blueprint  for R&D will be resolved—at least not in 2012. It takes on average a decade to commercialize a promising compound from proof of concept, so much of the current discussion around alternative approaches—from outsourcing key aspects of development to the “string of pearls” focus on science generated in-house—amounts to sheer background noise. Consultants can’t charge for this, and the evidence is purely anecdotal, but what does seem to matter is a long-term commitment to the science; retaining good people; acknowledging that internal competition can boost overall productivity and performance against agreed targets; a knack for finding and keeping a diverse circle of partners; and a healthy helping of luck. Analysts call it the “hybrid” model and companies will continue to tailor R&D strategies to fit their own circumstances.

2) 2012 will signal the industry is transitioning to an era of lowered expectations; pricing, reimbursement, value, and policy will combine in complex ways to drive down margins.
The bottom line is that it is becoming harder to make the contacts that drive sales with providers and the patient. Consolidation in the payer community gives them greater leverage in controlling the use of medicines, generic penetration limits the scope of argument about competitive differentiation, and increased government regulation has ended many of the promotions that helped build relationships with physicians. More therapeutic “crowding” in the specialty segment is another trend that will depress margins because payers now have a choice and can restrict access or demand rebates and discounts, as they have done with devastating effect in primary care.

Moreover, to cope with these developments, brand manufacturers are spending heavily on incentive programs like copay cards as well as patient support activities geared to raising adherence to therapy. Much of this activity is geared toward influencing the commercial business, and the added cost exposures will sharply depress margins there just as higher rebates mandated by health reform turn the public Medicaid and Medicare Part D programs into loss makers.

As a result, 2012 will see more effort to change the incentive package for sales reps, on the premise that “not all prescriptions are considered equal.” Pay incentives will motivate reps to win more non-controlled, third-tier reimbursed prescriptions rather than just focusing on the volume of scrip. This in turn will provide the rationale for more culling of the ranks—selective deployment of this human resource is key.

3) Advances in information technology will continue to shape the conversation with customers on access, value, and price.
That conversation is going to take place in public, as evidenced by the growth of cloud computing, which “hyper-democratizes” access to the vast resources of the Web—it’s the everyman’s Google. But Big Pharma is a business, with proprietary interests, so a key priority that will play out through 2012 is marking progress in defining basic standards on the application of IT. The goal is to ensure those business interests are protected while adding benefits through agreed channels for data sharing—the new Pistoia Alliance of companies engaged in precompetitive research is a good example—as well as improved IT management processes that raise efficiencies and lower costs.

Government regulators can help speed this trend—or delay it. The problem is that key agencies like the FDA are way behind industry in adapting to the IT revolution. Internal reforms are vital, because done right IT can help advance the portfolio through faster lead times and building that better case for competitive differentiation.

4) Preserve those reputational assets. 
Maintaining a “license to operate” is becoming more important as the reach of governments extend from regulatory oversight to direct involvement in the business—as a payer and customer. The gap between strict legal prohibition and the more murky terrain of ethical lapses is narrowing; overall, the “zone of vulnerability” is expanding and is now global in scope. 2012 will see major new efforts by U.S. and European regulators to apply anti-bribery statutes to companies’ overseas promotional activity, including inducements by CROs and other third parties to influence the conduct of foreign clinical trials. Active management of the drug shortage problem is another imperative; it is not enough to blame the problem on FDA or on quality issues linked to generics.

Ranbaxy’s troubles stretch back at least to 2006, when FDA found significant deviations from CGMP at the company’s Dewas and Paonta Sahib, India, plants. The agency sent a Warning Letter that year and two more in 2008. In September 2008, FDA decided to deny any new drug applications or abbreviated new drug applications that listed either of the two plants as a manufacturer. It also issued an Import Alert that allowed US border officials to detain imported products manufactured at those facilities.

As if the manufacturing problems were not serious enough, federal officials, reportedly including FDA employees, searched Ranbaxy’s New Jersey offices in 2007. The US Department of Justice (DOJ) later launched an investigation into allegations of conspiracy, false statements, and healthcare fraud at the company. DOJ suspected Ranbaxy of fabricating bioequivalence and stability data to support abbreviated new drug applications, and of attempting to conceal CGMP violations.

The situation worsened in 2009, when FDA charged Ranbaxy Laboratories’s Paonta Sahib facility with falsifying data and test results in approved and pending drug applications. The agency stopped all substantive scientific review of new and pending drug-approval applications containing data generated by the facility. A few months later, Malvinder Mohan Singh stepped down as the company’s chairman, CEO, and managing director.

Last week, Ranbaxy signed the consent decree in hopes of resuming US sales of drugs manufactured at the two banned plants. In a press statement, Ranbaxy pledged to ensure the integrity of its data and to comply with CGMP. Indicating that DOJ’s suspicions had some foundation, the company also set aside $500 million to resolve civil and criminal liability arising from the department’s investigation.

Ranbaxy has taken unspecified “systematic corrective steps” to straighten itself out, according to the statement. Although we might be skeptical about these measures, the company’s new owner Daiichi Sankyo might bring the rigor and discipline that Ranbaxy seems to need. Let’s hope on behalf of patients everywhere that Ranbaxy can turn over a new leaf in 2012.

Last Thursday, FDA issued an interim final rule requiring manufacturers that are the only producer of certain drug products to report all manufacturing interruptions to the agency. Early notification will help FDA work with drug manufacturers and doctors to make sure that patients have access to life-supporting products. The interim rule was spurred by President Obama’s Oct. 31, 2011, executive order, which directed FDA to reduce and prevent drug shortages.

But the agency is not relying on just one tactic. In addition to the interim final rule, FDA is developing a tracking database to monitor drug shortages. The database will record the numbers of shortages, the reasons for shortages, and what steps FDA is taking to address and prevent them. The database is a high priority for the agency, which hopes to complete it in 2012.

Also, several observers have expressed concern that unscrupulous organizations could attempt to reap large profits from drug shortages. In response, FDA has begun analyzing reports about drug stockpiling and exorbitant pricing. The agency plans to provide the Department of Justice with information about these reported activities, and the Department will determine whether they are consistent with the law. This issue is on Congress’s radar, too: Senator Charles E. Schumer (D-NY) recently introduced a bill to make price gouging on scarce drugs a federal crime.

As any supply-chain professional knows, having one source of a crucial item is far from an ideal situation. If a drug is crucial but not profitable, we may not see new sources spring up to provide additional supply-chain security. But FDA’s initiatives promise to ease the threat of drug shortages and reduce patients’ suffering.

GSK isn’t the first pharma company to set its eyes on the automobile industry. In 2009, AstraZeneca borrowed some experts in lean manufacturing from Jaguar Land Rover, who were to apply their knowledge of efficient car production techniques to medicines. I’m researching at the moment how the project went so watch this space and hopefully I’ll be able to provide an update on this in the near future.

So what is it that cars and pharmaceuticals have in common? Today, the majority of a car’s value is attributable to suppliers but before this the industry used to be dominated by Western companies, much like the pharma industry. As the industry found the need to implement aggressive streamlining and cost cutting, carmakers now maintain only a few core operations, with everything else taking place across a huge network of contractors.

In the pharma industry, we’re already seeing greater numbers of companies outsourcing certain functions, such as clinical trials, or in-licensing new compounds from smaller companies.

The article (available here) pulls out a lot more similarities between the two industries. If you like pharma and cars then it’s definitely worth a read!

The article doesn’t provide any updates on the GSK partnership, which is a shame because it’s something I’m really looking forward to hearing more about. Where as AstraZeneca was looking to cars for lean expertise, GSK is hoping to extrapolate some of the technology using in Formula 1 racing to improve its R&D, such as seeing whether real-time monitoring technologies can be applied to human studies.

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After reviewing the data, obstetricians, gynecologists, and pediatricians at the Center for Drug Evaluation and Research (CDER) determined that Plan B One-Step “was safe and effective in adolescent females, that adolescent females understood the product was not for routine use, and that the product would not protect them against sexually transmitted diseases,” according to a statement by FDA Commissioner Margaret Hamburg. CDER also concluded “that adolescent females could use Plan B One-Step properly without the intervention of a healthcare provider,” according to the statement. And FDA is not alone—the American Academy of Pediatrics also supports over-the-counter access to emergency contraception.

Sebelius’s concern about the ostensible lack of studies including 11-year-olds seems unusual when one considers that many over-the-counter drugs have not been studied in preadolescents—and some are far more dangerous than Plan B One-Step. “Acetaminophen can be fatal, but it’s available to everyone,” Susan Wood, a former FDA assistant commissioner, told The New York Times. “So why are contraceptives singled out every single time when they’re actually far safer than what’s already out there?”

FDA places great emphasis on scientific data, as any manufacturer contemplating a process change well knows. In this instance, FDA’s informed decision seems to have been overruled for reasons other than scientific ones.

Also see Christopher Allen and Angie Drakulich’s sidebar “Behind the Counter.”

Beginning this month, we are featuring monthly reader polls to gain your feedback on key advances in the pharmaceutical sciences and manufacturing. As the scientists and technical experts on the front lines, your input is a crucial component in understanding what the industry has achieved and where it will go in the future. We encourage you to provide your feedback in our first poll, which is examining advances in oral drug delivery and oral product forms. We will share the results with you at PharmTech.com, and along with further analysis, our July issue will take a retrospective and prospective look at drug substance and finished drug-product manufacturing, formulation development and drug delivery, outsourcing, and analytical testing.

We are interested in your feedback as well. In addition to our reader polls, we invite you to provide your input on what you think have been major achievements in drug substance and finished drug-product manufacturing, formulation development and drug delivery, outsourcing, and analytical testing. Lend your expertise and offer your input in the comment section to this blog or email your input to Patricia Van Arnum, executive editor, pvanarnum@advanstar.com. We look forward to hearing from you.

Drug companies, including Pfizer, are wooing insured consumers by offering copay coupons, which reduce the amount of money that the latter must spend for a branded drug. These coupons are intended to discourage a patient from switching to a generic therapy. To redeem the coupons, consumers often must submit personal information that allows the firms to promote products to individual patients.

The coupons may help consumers, but they oblige plan sponsors, such as employers or state governments, to pay high prices for branded drugs when generic alternatives are available. Drug companies can prevent plan sponsors from knowing when enrollees have redeemed the coupons by processing them through a “shadow claims system,” according to a statement from the Pharmaceutical Care Management Association. Copay coupons will increase costs for these sponsors by $32 billion over the next decade, according to research from Visante.

At a time when state governments and private companies are pinching pennies, it’s hard to believe that they will allow drug companies to use these tactics for very long. Arrangements such as Pfizer’s agreement to manufacture generic Lipitor for Watson, in exchange for a share of net sales, seem comparatively more benign. Deals like this don’t appear to constrain patients’ choice or force payors to spend more than necessary for a given drug. They might be the “least bad” option for drugmakers without new blockbusters on the horizon.