Companies have been waiting in the wings to pick up the rights to the generic version. Watson Labs launched an authorized generic version of Lipitor on Nov. 30. Under the terms of an exclusive supply and distribution agreement, Pfizer will manufacture and supply Watson with all dosage strengths of the authorized generic product, and Watson will market and distribute the product in the US. In turn, Pfizer will receive a share of the net sales.

Ranbaxy Labs picked up last-minute approval from FDA to market generic atorvastatin in the US under the coveted first-to-file spot, that gives them a 180-day period of marketing co-exclusivity that they will share with Watson. The drug will be manufactured by Ohm Laboratories in New Brunswick, NJ, according to the FDA release.  According to Ranbaxy’s press release , a portion of the profits from sales of atorvastatin during Ranbaxy’s 180-day first-to-file exclusivity period will be paid to Teva, but further details of that agreement have not been disclosed.

Pfizer does not seem willing to jump quietly off the patent cliff. In an effort to maintain market share and promote brand loyalty, it has stepped up marketing in recent months, and is offering rebate coupons to insured patients to bring copays for the branded version in line with those for generic versions. It has also entered into controversial agreements with some pharmacy benefit managers in which they will receive rebates if they block generic prescriptions, a move that has sparked concern among members of Congress.

Because this particular drug has such a huge market, there’s a lot of money at stake. Generics are low margin, but low margins on a high-volume product can still make handsome profits. In developing countries, branded generics are popular, because they give patients the comfort of brand-name recognition, and an expectation of quality greater than that from nonbranded generics. That model has never caught on in the US, but Pfizer’s attempts to hold on to such a lucrative product makes me wonder whether its time will come.

Drug shortages are an acute problem that keeps getting worse. Last year, about 211 drugs were in short supply, which was a new record. This year, the number of new drug shortages already has reached 213, according to the University of Utah Drug Information Service. As a result, many patients now have limited access to crucial drugs, such as cancer therapies and medicines for potentially lethal infections. And a Congressional committee is now investigating what appears to be an insult added to this injury.

Rep. Elijah E. Cummings (D-MD) alleges that secondary drug distributors are charging exorbitant prices for drugs that are in short supply. Allied Medical Supply, for example, has charged $990 per vial of cytarabine, a treatment for leukemia that usually costs about $12 per vial. A shortage of leucovorin, which is used to treat advanced colon cancer, has enabled Premium Health Services to charge more than $270 per vial, even though the drug’s typical price is approximately $5 per vial. On behalf of the House Committee on Oversight and Government Reform, Cummings has sent these companies letters asking how much they are making in profits on these drugs.

The biggest cause of drug shortages, according to FDA, is manufacturing quality problems. Fortunately for us, FDA just awarded a multimillion-dollar grant to the National Institute for Pharmaceutical Technology and Education (NIPTE) to improve drug development and manufacturing. NIPTE, a not-for-profit research organization, will use the money for various projects that could help manufacturers better understand their products and processes. For example, NIPTE will seek to develop analytical methods that can characterize complex molecules and enhance control of product quality. The group also will investigate specialized manufacturing techniques for low-dosage and high-toxicity products.

By improving manufacturing quality, NIPTE’s work could help reduce the number of future drug shortages that patients must endure. And FDA will soon provide recommendations for avoiding and mitigating drug shortages. FDA’s efforts are a good sign that it takes the problem seriously, but for many patients, relief cannot come too soon.

According to the Premier healthcare alliance, a performance-improvement alliance of 2500 US hospitals and 75,000 healthcare sites, drug shortages cost US healthcare providers at least $200 million annually. “These drug shortages increase the risk to patients due to the introduction and use of unfamiliar drugs to work around the shortages,” states a Premier press release from March 2011.

For many years, FDA has run a Drug Shortage Program aimed at addressing “potential or actual shortages of drugs that have a significant impact on public health.” Current shortages are kept up to date on the site. Among the most recent shortages listed are Genentech’s Tamiflu for Oral Suspension and several injections. The information provided on the site is provided voluntarily by manufacturers (they are not required to do so). The agency encourages healthcare professionals and patients as well to notify it about any other known shortages at drugshortages@fda.hhs.gov.

In 2010, there were 178 drug shortages reported to FDA, 132 of which involved sterile injectable drugs, according the agency’s frequently asked questions (FAQ) website for the program. This year, to date, there has been “an increasing number of shortages, especially those involving older sterile injectable drugs,” says the site. These shortages have involved cancer drugs, anesthetics used for patients undergoing surgery, as well as drugs needed for emergency medicine, and electrolytes needed for patients on IV feeding.

For the most part, these shortages have been caused by quality and manufacturing issues, says the FDA FAQ website. Other causes are tied to delays with getting raw materials or components from suppliers, or discontinuations of certain products (which FDA does not have the authority to stop). “With fewer firms making older sterile injectable drugs, there are a limited number of production lines that can make these drugs,” says the FDA website.

The agency works with companies to address quality and manufacturing problems and to help ramp up production, where appropriate, by expediting the approval of new production lines or raw-material sources. The agency also, in some cases, approaches overseas companies that may be able to fill any gaps in product shortages.

Earlier this year, two US Senators introduced the Preserving Access to Life-Saving Medications Act (S. 296) to amend the Federal Food, Drug, and Cosmetic Act to provide FDA with improved capacity to prevent drug shortages, including the way the agency prioritizes reinspections. According to the draft legislation, the Secretary of the US Department of Health and Human Services would have to submit an annual report to Congress about actions taken to address drug shortages all through the supply chain. To date, the bill is still in committee. A companion House bill, H.R. 2245, is also in committee.

Many groups have been lobbying Congress on this topic. For example, drug shortages are a key issue for cancer patients. The Association of Community Cancer Centers hosted a Capitol Hill briefing on July 13, 2011, to present data from a new survey showing that 94% of reporting facilities in 2010-2011 experienced an oncology drug shortage. Eighty-four percent of those facilities said they had to “temporarily modify or suspend a chemotherapy regimen for their patients because they were unable to obtain a specific drug,” according to a blog on the ACC site.

I find it surprising that manufacturers are not required to alert FDA to shortages, whether pending or imminent, considering the impact a shortage can have on patient care and the industry in general. Even the FDA itself says that “significant public health consequences that can result from drug shortages,” on its FAQ site. Manufacturers are also not required to report the reasons for shortages or the shortages’ expected duration. They are required, however, to let FDA know six months in advance about any discontinuations of sole-source products.

FDA is holding a public workshop on this topic on Sept. 26, 2011, in Silver Spring, Maryland. The focus will be on how FDA’s Center for Drug Evaluation and Research is addressing the issue, the causes and impacts of shortages, and potential strategies for preventing them in the future. Let’s hope the workshop helps move forward the pending legislation in Congress so that regulators, industry, and healthcare providers can better prepare for and control the effects of drug shortages in the future.

On May 23, 2011, Sen. Herb Kohl (D-Wis.), and Reps. Henry Waxman (D-Calif.), Frank Pallone (D- N.J.), and Diana DeGette (D-Colo.) co-authored a letter (available here) to Richard Roberts, President and CEO of URL Pharma, requesting detailed information on costs and revenues associated with the drug, including the cost of clinical trials, manufacturing, and marketing the drug, and projected revenues. The company was given a deadline of June 10 to reply. In the letter, the lawmakers state: “High prices lead to tough choices for patients. Further, the higher price of this treatment will be borne by private health plans and the federal government, and will contribute to the continued overall growth in health spending.”

At the same time, these lawmakers sent a letter with similar requests for information on pricing to Keith Katkin, president and CEO of Avanir Pharmaceuticals. Like URL, Avanir markets an approved version of a legacy drug, in this case a combination of quinidine and dextromethorphane for treatment of pseudobulbar affect (involuntary emotional outbursts) under the trade name Nuedexta. In the case of Nuedexta, the price jumped from $20 for non-approved versions, to $600 for the approved version. In their letter, the lawmakers state: “Although we recognize that we all benefit when FDA approves a new, safe and effective formulation, it is not clear that the significantly higher prices charged for this drug are justified given that it is merely a combination of long-used and inexpensive generic medications.”

The lawmakers’ desire for clarity around drug pricing is admirable. However, cost-of-goods is only a small part of the formula used to determine pricing. A large part of the formula is what the market will bear. In this case, there is value associated with buying FDA-approved, GMP-manufactured products, but companies that venture into the marketing of legacy drugs are still feeling their way around what that value might be.

Drug maker KV Pharmaceuticals has been in the news concerning pricing of its newly approved drug, Makena.  Makena, while newly approved, is a version of a very old drug, synthetic progesterone, which had previously been available to consumers for as little $10-$15 a treatment through specialty pharmacies that compounded the drug on site.  On Feb 3, 2011, KV received approval for Makena, an injectable form of synthetic progesterone, under FDA’s Orphan Drug Act, as a treatment for women who are at risk of preterm labor.  Under the Act, KV was awarded seven years of exclusive patent protection. When Makena hit the market, KV set the price at $1500 a treatment and informed compounding pharmacies that they would be in violation of their patent if they continued to supply the generic form of the drug.

Progesterone is given as a weekly shot to women who are at risk of preterm labor, so, at KV’s proposed price, the cost of treatment for the average full-term pregnancy could run as high as $30,000.  An outcry among physicians, patient advocacy groups, and public health officials ensued, which resulted last week in KV dropping the price by more than half and instituting a series of rebates and assistance programs to ensure that consumers would have access to more affordable treatment.  In addition, in response to the public outcry, FDA clarified that in this particular instance, it would not prevent compounding pharmacies from making a generic version available.

Unlike the pricing of consumer goods, drug pricing is completely opaque. In addition to the direct cost of goods, drug companies factor in the large but murky costs of development, which include the costs associated with drugs that don’t make it to market.  To make it even less transparent, price for the same product fluctuates depending on regional markets and negotiated pricing.  The Makena story might easily be viewed as a story of corporate greed, but I’d rather view it as a story of the power of the marketplace. KV was perhaps overly optimistic in setting the price of their product, but was brought back in line by the realities of the market.

If FDA approves Contrave, it will become the first new prescription weight-loss treatment in more than a decade. The agency, which isn’t required to follow the advice of its expert panels but usually does, is set to decide on the drug’s status by Jan. 31, 2011.

This week, FDA personnel met with executives from Arena Pharmaceuticals (San Francisco), developer of the rejected obesity drug lorcaserin, and outlined a plan for the company to resubmit its new drug application and seek future approval. Arena President and CEO Jack Lief said in a company statement that the company expects to refile the NDA by the end of 2011.

In September, lorcaserin was rejected, in a 9–5 vote, by the panel because of concerns that early testing showed mammary tumors in rats. In October, Arena said in a press statement that FDA’s complete response letter (CRL) stated concerns about the tumor risks, as well as the drug’s efficacy, stating that the weight-loss experienced by people without Type 2 diabetes in clinical trials was marginal.

Qnexa (phentermine/topiramate) by Vivus (Mountain View, CA) was also rejected (in a vote of 10–6) by FDA’s committee in July because of health risks, specifically, concerns about cardiovascular problems and birth defects. Vivus said last week that it submitted a briefing document to FDA to address the agency’s concerns in its CRL, and will meet with FDA’s endocrine and metabolic division in January to discuss resubmission possibilities.

On Monday, Vivus began the approval process for Qnexa in Europe by filing a marketing authorization application with the European Medicines Agency. The company said the drug could receive approval late next year.

See related PharmTech articles:
Safety Concerns Prompted FDA’s Rejection of Qnexa and Lorcaserin

FDA Panel Votes ‘No’ on Arena’s Obesity Drug

FDA Mulls More Obesity Drugs

The manufacturing plant was closed in April following massive recalls of more than 40 types, and 135 million bottles, of infants’ and children’s medicines on April 30, 2010, due to contamination and substandard quality. The April 30th recall was also the subject of a hearing by the House Committee on Oversight and Government Reform in May. J&J responded by presenting an action plan to FDA in July outlining how to improve product quality. The company also appointed a corporate head of quality in August that reports directly to the CEO.

The company has issued numerous additional recalls related to product quality in the past year, the most recent was the last week’s voluntary recall of Rolaids products after consumer reports found wood and metal particles in the tablets.

McNeil has also had problems with quality in Puerto Rico. In January 2010, FDA issued a Warning Letter to McNeil for “significant violations of the Current Good Manufacturing Practice (CGMP) regulations” at its facility in Sector Montones, Las Piedras.

Executive Appointments
J&J expanded the office of the chairman Wednesday by adding two new positions. The company appointed Alex Gorsky, currently worldwide chairman of medical devices and diagnostics, and Sheri McCoy, currently worldwide chairman of pharmaceuticals, to the positions of vice-chairmen of the executive committee, effective Jan. 3, 2011. Gorsky will have the added responsibilities of the medical device and diagnostics group, global supply chain, and government affairs and policy. McCoy will oversee the pharmaceuticals group, consumer group, the corporate office of science and technology, and corporate affairs.

“These appointments will ensure we are well-positioned for sustainable growth into the future,” said William C. Weldon, chairman and CEO. “The changes are an appropriate step in furthering our long-term succession plans, and assuring talented, experienced leaders at all levels of the organization.”

The move appears to indicate that the beginnings of a succession plan is in place—the New York Times and other news outlets are calling the two promotions a “horse race” to determine who will take over as CEO. Although Weldon has faced criticism for his handling of the company’s recent quality problems and pressure to step down from his position, a company spokeswoman told NYT that Weldon “has no plans to retire.”

Click here to view a list of previous PharmTech blog posts about J&J.

In India, Delhi Chief Minister Sheila Dikshit promised earlier this week to fight the public health threat of counterfeit drugs. Speaking at a seminar on combating counterfeit drugs, she urged a policy of zero tolerance toward them, according to an article from The Times of India.

Dikshit’s action plan calls for improved testing of suspected counterfeit drugs and increased vigilance against fakes among pharmacists and regulatory agencies. It also recommended that the State Drug Control Department be strengthened and should focus on halting the spread of counterfeit medicines.

“It is also the need of the hour to have an adequate testing laboratory to ensure that the suspected samples are tested expeditiously,” she said. Dikshit urged pharmacists to ensure that their sources of pharmaceuticals are safe. Establishing a toll-free helpline to receive complaints of suspected counterfeit drugs was also proposed.

These measures launched by China and India will be good steps toward eliminating the spread of illegal fake goods and pharmaceuticals. Because of the growing problem of counterfeits, more efforts will be needed to make strides in eliminating them to protect the health of consumers and the business interests of pharmaceutical companies.

In both cases, FDA followed the advice of the Endocrinologic and Metabolic Drugs Advisory Committee, which recommended that the two drugs, Qnexa (phentermine/topiramate) by Vivus (Mountain View, CA) and lorcaserin hydrochloride by Arena Pharmaceuticals (San Diego), not be approved because of health risks. In the CRL for Qnexa, FDA requested more study results and information about the drug’s risks such as cardiovascular events and birth defects, according to Vivus. Arena announced that FDA’s main concerns with lorcaserin were that early testing showed mammary tumors in rats, and that the weight-loss experienced by people without Type 2 diabetes in clinical trials was marginal. FDA asked for more data and said more clinical testing may be required if concerns about the tumors are not alleviated.

Another setback for obesity treatments was the voluntary recall of Meridia (sibutramine) in the US and Canada by Abbott (Abbott Park, IL) in October. FDA requested the recall due to risks of stroke and cardiovascular side effects. Meridia was banned in Europe in January.

There is hope, however, for approval of a third new treatment. Contrave (naltrexone sustained release [SR]/bupropion SR), by Orexigen Therapeutics (San Diego), will face the advisory committee early next month, on Dec. 7. FDA will decide by Jan. 31, 2011 whether to approve the drug.

See related articles:
FDA Panel Votes ‘No’ on Arena’s Obesity Drug

FDA Mulls More Obesity Drugs

Internet pharmacies were seen as a major source of counterfeit drugs and a significant driver of the worldwide problem. The authors of the report analyzed more than 100 websites and found the following:

• 95.6% of online pharmacies researched are operating illegally
• 90.3% of websites do not require sight of a prescription
• 86% of online “pharmacy approval” stamps are fake
• 78.8% of websites are violating brand intellectual property
• 50% of medicines supplied by online pharmacies which conceal their physical address are fake.

“Although there has been some debate around the size of the worldwide counterfeit medicine market that has been estimated at $75 billion and upward, one cannot dispute that the unregulated growth of Internet pharmacies will only contribute to this problem,” Rainuka Gupta, Group Manager of Medical Technologies at Cambridge Consultants, said in a company statement. “Our research concluded that this presents both a dual threat to consumers and the industry alike. Easier access to cheaper drugs has exposed consumers to dangerous mixes of fake drugs and placebos. Meanwhile, pharmaceutical companies risk losing credibility and regulatory bodies risk losing control with the spread of these counterfeit medicines. As an industry, we need to better educate consumers on the threats associated with fake drugs, but we also must work together to coordinate and implement technologies that can detect and deter counterfeiters.”

The report gives further statistics on the spread of counterfeit drugs, stating that in Africa and Southeast Asia, the World Health Organization has estimated that about 50% of medicines could be fake. Worldwide, WHO estimated that 15% of all drugs are counterfeits. In the United States, the Customs and Border Protection Agency stated in 2008 that the value of seizures of counterfeit pharmaceuticals had increased to $11.1M in 2007, which is a 500% increase on 2006, says the report.

Regarding regulations, the authors acknowledge the complexities facing governments when drafting policies for counterfeiting and diversion. Regulations should be flexible, for example, so manufacturers can use new technologies to keep ahead of criminals, given the time needed to shape new regulations and enforce them. This is why many feel that regulations should focus on standards and not on specific technologies required to combat counterfeiting, according to the report.

The issue of punishing counterfeiters was also discussed by interviewees involved in the report, who believe that stricter laws and penalties are required. According to the report, “Currently, in some countries, counterfeit drugs are not illegal; or are a violation of trademark laws; and in many countries the punishment associated with counterfeiting is a fine, which is small in comparison to the revenues generated by the sale of counterfeit products, and not reflecting the potential harm of counterfeit drugs.”

Cambridge Consultants held a panel on counterfeiting during the 2010 BIO International Convention earlier this year, which featured representatives from Amgen, Genzyme, and BIO.  The panelists discussed three different types of technologies that can be deployed (anti-tamper packaging, serialization, and authentication) to fight against counterfeit pharmaceuticals. Given the global nature of counterfeiting and diversion carried out by organized criminals, the panel and research participants agreed that collaboration among various stakeholders, including manufacturers, supply chain partners, and law-enforcement entities, is critical to address the problem.

See related PharmTech articles:

Authentication and Pharmaceutical Protection: An Industry Roundtable (Pharmaceutical Technology magazine)

New Report Addresses Pharma Execs’ Top Supply-Chain Concerns (blog post)

Report: Online Drug Brand Abuse on the Rise (blog post)

New Report Focuses on Yahoo’s Rogue Pharmacy Advertisers (blog post)

Reports Point to Increased Counterfeit Drug Activity (blog post)