EvaluatePharma expects Pfizer’s prescription and over-the-counter (OTC) sales to drop to $49.8 billion in 2012, mainly due to the patent expiry on Lipitor, the blockbuster cholesterol-lowering statin that holds the record for the world’s biggest selling medicine. Meanwhile, Sanofi’s sales will grow from $47.9 billion in 2011 (which ranked it as third in terms of the world’s top pharmaceutical companies) to $51.6 billion in 2012. The French company has been moving up the rankings for some time, boosted by a decade of mergers, which began in 1990 with the deal between Sanofi and Synthelabo and culminated with the $20 billion acquisition of Genzyme in February this year.

“The takeover of Genzyme this year was an aggressive cross-border move that revealed just how much the culture of Sanofi has changed in the last few years,” explains the EvaluatePharma analysis. “The traditionally inward looking French drug maker has, like many of its peers, taken big strides to acquire and license innovation from beyond its own labs in an attempt to revive flagging R&D productivity.”

The analysis adds that sales of Genzyme’s enzyme replacement therapies should be enough to keep the crown on Sanofi’s head until at least 2016, with the blockbuster products of Cerezyme and Myozyme helping to offset revenue of Plavix, which will lose US patent protection next year, as well as the ongoing generic erosion of Lovenox and Taxotere.

Pfizer, on the other hand, will fall further behind in terms of sales. By 2016, Sanofi is expected to have sales of $58.4 billion while Pfizer will scrape $51.9 billion, representing a minute 1% compound annual growth rate (CAGR) over 2011–2016. Sanofi, on the other hand, will have a CAGR of 4%. Pfizer will also face competition from GlaxoSmithKline and Roche. By 2016, GlaxoSmithKline is expected to rank fourth with sales of $50.9 billion (compared with ranking fifth in 2011 with sales of $39.3 billion) while Roche will come in fifth with $49 billion (up from sixth in 2011 with $39.1 billion).

As for Novartis, the company will see strong growth from Gilenya and Tasigna over the next few years and will also be bolstered by its $48-billion acquisition of eyecare company Alcon, which will boost sales in areas outside of prescription and OTC drugs. Novartis was ranked second in 2011 with sales of $49.5 billion and is predicted to maintain this ranking at least until 2016, when it is expected to have sales of $54.8 billion.

Meanwhile, there will also be some shuffling in the league table among the other drugmakers too. Merck, currently ranked fourth, will drop to sixth place by 2016, and Eli Lilly, tenth, will fall to fifteenth. The analysis also highlights generics giant Teva, which is expected to rise from twelfth position in 2011 to ninth in 2016 as it grows at a CAGR of 7%. Novo Nordisk will also experience a high growth rate—currently ranked in seventeenth place, the Danish diabetes specialist will climb up to fourteenth place by 2016 with a CAGR of 9%.

Last week, the World Intellectual Property Organization (WIPO), an agency of the United Nations, founded WIPO Re:Search, a forum for public and private organizations to share intellectual property (IP) and expertise with global-health researchers. By establishing a public database of IP, WIPO Re:Search aims to help develop new drugs and vaccines to treat neglected tropical diseases, malaria, and tuberculosis. The National Institutes of Health and companies such as AstraZeneca, Eisai, GlaxoSmithKline, Novartis, Pfizer, and Sanofi have agreed to work with the group.

To join WIPO Re:Search, member organizations agree to let the group license their IP to researchers on a royalty-free basis in many cases. But some observers say that these terms will not make information accessible enough. “Instead of allowing all countries where neglected diseases are prevalent to access the products, the initiative restricts royalty-free licenses to least-developed countries only, with access for other developing countries negotiable,” said Doctors without Borders in a press statement. Many patients that suffer from neglected tropical diseases do not live in least-developed countries. “In the Americas, for example, Chagas disease affects 21 countries, but the consortium will only provide royalty-free licenses for Haiti, where Chagas is not endemic,” according to the statement.

I think that WIPO’s initiative has great potential to help ease suffering and save lives. It’s encouraging to see the pharmaceutical industry dedicate resources to treating diseases that do not necessarily represent lucrative markets. And, by pooling a large amount of expertise, collaborations such as this one promise to solve stubborn problems more quickly than might otherwise be the case. But Doctors without Borders seems to be raising legitimate concerns. Considering its overall profitability, does the pharmaceutical industry have an obligation to help countries in need?

Concern about pharmaceuticals in our water supply has been in the public consciousness for a few years now. In 2009, the Environmental Protection Agency found traces of various drugs in fish caught in rivers that receive effluent from wastewater-treatment plants. The drugs were believed to come from doses that people had excreted or flushed down the toilet. In response, FDA updated its guidelines for disposing of drugs. New research, however, shows another potential source of drugs in our waterways.

French scientists investigated fish called wild gudgeon that lived upstream and downstream of a steroid-manufacturing facility owned by sanofi. About 60% of the fish downstream of the facility had both male and female sexual characteristics, as opposed to 5% of the population upstream. Researchers identified pollutants such as diuretics and anti-inflammatory agents in the river. The fish’s abnormalities could prevent them from breeding and also signal problems in other species.

“People think drug release is regulated, but it’s not,” said Joakim Larsson, a pharmacologist at the University of Gothenburg in Sweden, to Nature. But this lack of oversight may end: the European Commission is now considering whether to set limits on common drugs (e.g., ibuprofen and the contraceptive ethinylestradiol) in waterways.

Setting limits might prove difficult, however. Scientists have not yet determined safe limits for many pharmaceuticals in the aquatic environment, or how widespread the problem is, according to Susan Jobling, an aquatic ecotoxicologist at Brunel University in London who spoke to Nature.

The French researchers’ findings certainly are alarming, but regulators won’t have a solid basis for any decisions until more information comes to light. I’m encouraged that sanofi is cooperating with regulatory agencies, researchers, and ecological associations to investigate the scope and root of the problem. In the meantime, the pharmaceutical industry would do well to keep this story in mind, and perhaps review whether it can reduce the potential risks of its waste-disposal procedures.

Also see my previous posts about pharmaceuticals in water:

“Water without Side Effects”

“Hope for Bipolar Fish”

Just last week, Representative Michele Bachmann (R-MN) told Fox News that the vaccine for human papillomavirus “can have very dangerous side effects.” Bachmann, who hopes to be the Republican candidate for president next year, mentioned a mother who claimed that her daughter had suffered mental retardation because of the vaccine.

Bachmann has taken a lot of heat for her remarks. The American Academy of Pediatrics and public-health efforts have denounced them. Arthur Caplan, a bioethicist at the University of Pennsylvania, offered to donate $10,000 to the charity of Bachmann’s choice if she “can produce a case in one week . . . verified by three medical experts that she and I pick of a woman who became ‘retarded’ (her words) due to the vaccine.”

Unfortunately, Bachmann is not the first to question vaccines’ safety. For years, a small but vocal group has been claiming that the vaccine for measles, mumps, and rubella causes autism. Early this year, the research paper that lent credence to this claim was revealed to rely on sloppy science and questionable methods. More recently, a panel assembled by the Institute of Medicine found no evidence that the vaccine causes autism.

Rumors that vaccines are harmful continue to circulate even in the absence of sound evidence. Comments such as Bachmann’s help foster this misperception. The group warning about vaccines’ putative dangers may be small, but it has gained media attention and could potentially influence patients’ decisions about healthcare. The pharmaceutical industry, and public officials such as FDA, would do well to publicly reaffirm that vaccines are safe. Drugmakers could describe the safety information garnered during clinical trials of their now-approved vaccines. And perhaps FDA could include a Q&A about vaccines on its website to dispel doubts. Communicating accurate information about vaccines will help the industry and patients alike.

One of the plaintiffs, Natalie Celske, received several awards for her performance as a sales representative, according to the complaint. She became a district trainer and expressed interest in being promoted. Celske’s manager, however, removed her from her role as a trainer and replaced her with Celske’s male colleague James Webb, even though his performance had not been as good as hers. When Celske asked her manager why he had removed her from her position as trainer, he allegedly replied that the job was “more into James’s career path, not yours.”

Another employee, Vera Santangelo, alleged that a male senior employee sexually harassed her repeatedly. On several occasions, he grabbed her and made comments about her body. Distraught, Ms. Santangelo reported the harassment to the company hotline and to an ombudsman, but the senior employee’s behavior continued and a manager dismissed or diminished her complaints.

In an October 2010 internal newsletter, the company suggested that men are better suited for management positions because “the fairer sex” is prone to “mood swings,” “indecision,” and “backstabbing.” One of the company’s vice-presidents allegedly announced that he was “never hiring another woman over 40 again. They’re all crazy!” When women have complained about these attitudes, the company’s human resources department often responded with comments such as, “this is just the way it is, deal with it,” according to the complaint.

Bayer’s employees’ allegations deserve a full and fair airing. Coming in the wake of similar, and successful, suits against Novartis and Sanofi, the class action against Bayer indicates that the pharmaceutical industry as a whole should evaluate its policies toward women. Women have demonstrated their dedication and talent time and again, and research has shown the advantages that women bring to any company. It’s well past time for us to shed whatever remaining vestiges of sexism we may have.

But when Committee Chair Representative Darrell Issa (R-CA) recently visited Maridalia Torres, FDA’s Puerto Rico district director, he learned that neither she nor her staff had visited the McNeil facilities since the time of the hearings. What’s more, Torres had not evaluated McNeil’s corrective actions, but had relied on a third-party compliance officer—hired by McNeil—for information. In a letter to FDA Commissioner Margaret Hamburg, Rep. Issa asked whether FDA had taken any disciplinary actions against its Puerto Rico employees.

Last week, Senators Charles Grassley (R-IA) and Max Baucus (D-MT) expressed concerns about the way FDA oversees the citizen-petition process. As the agency was considering the approval of generic alternatives to Sanofi’s Lovenox blood thinner, it reviewed letters from a professor and two medical groups requesting that approval be delayed. At Congress’s request, Sanofi produced documents revealing that it had encouraged the groups to write to FDA. The company paid the two groups more than two million dollars each, and paid the doctor more than $200,000. None of these three parties revealed their financial relationship with Sanofi to FDA in their letters. And FDA apparently did not ask.

In their letter, the senators warned that abuse of the citizen-petition process could delay patient access to “potentially affordable, safe, and effective generic alternatives.” The lawmakers asked what steps FDA had taken to ensure that the process was transparent.

No government agency is perfect, and FDA does suffer from a chronic shortage of resources. But if FDA is at fault in these two incidents, it is because of a lack of diligence rather than a lack of funds. Patients, whose lives are at stake, need the agency’s protection. I hope FDA rises to the challenge of Congress’s tough questions.

Many drugmakers have taken their investors’ advice to heart. One salient example is Pfizer, whose CEO Ian Read plans to slash R&D budgets by about 25% over the next two years. Chris Viehbacher, CEO of Sanofi, told Reuters that R&D cost cutting would increase throughout the industry this year and next. Companies are likely to focus their discovery efforts on the most lucrative areas in an attempt to get more bang for their R&D buck.

But, profitable or not, don’t patients need new and better drugs? Where will they come from? Drugmakers may well outsource innovation by partnering with entities such as universities and contract research organizations, Tim van Biesen, head of Bain and Company’s healthcare practice, told Reuters. They’d be following Hollywood’s strategy of sourcing “movies and scripts from all over the place,” he said. Shire already seems to have started along this path.

Big Pharma also might take advantage of its scientific expertise and marketing muscle by creating follow-on biologics. Cheaper versions of biopharmaceutical treatments for rheumatoid arthritis and cancer are in big demand, said David Snow, CEO of Medco Health Solutions, to Reuters. Making follow-on biologics could be a way for Big Pharma to boost sales. In addition, the discount for these medicines likely will be less than that for small-molecule drugs because they’re tougher to copy—and fewer competitors will manufacture them.

While these strategies might eventually improve Big Pharma’s bottom line, they also represent a shift away from the traditional model of what a drug company is. And even if it helps the drug industry, will the emerging model serve patients’ interests?

New Jersey’s pharmaceutical workforce has shrunk as a result of mergers and flagging sales, and observers are searching for a tonic to give the industry new life. One necessary strategy is to form partnerships with international investors or other drugmakers, said David Finegold, dean of Rutgers University’s school of management and labor relations, at the EU–NJ Business Forum. Investors in South Korea, India, and China are putting a lot of money into the industry, but they don’t have people with experience in gaining FDA approval for their products, Finegold said, according to The Record.

Finegold’s model of choice is the partnership between Merck & Co. and the Wellcome Trust medical charity, which is based in the United Kingdom. The partnership aims to prevent diseases that affect poor countries by developing new vaccines and optimizing existing vaccines. Merck and the Wellcome Trust invest equally in the partnership and share decision-making responsibilities.

The partners run the venture like a business, but according to a not-for-profit model, which is a foreign concept to most drugmakers. Yet the pharmaceutical industry will have to get used to this idea. To survive, firms will have to abandon their high profit-margin business models, Finegold said.

Give him credit for trying to get risk-averse drug companies to adopt new and creative ways of thinking and operating. Although Finegold’s recommendations could help stimulate the industry, I wonder whether they would increase domestic employment. The Merck–Wellcome Trust partnership, Finegold’s template, is based in India. An ideal business model would foster international cooperation, create domestic jobs, and encourage the development of needed therapies. If nothing else, Finegold’s remarks will help start discussions that could lead the industry toward this ideal.

This long-awaited conclusion marks the end of months speculation by investors and media and back-and-forth between the companies. Taking a look back, in early July 2010 PharmTech blogger Patricia Van Arnum reported on rumors of sanofi looking to acquire a US-based company for the price of rougly $20 million. By the end of July, the buzz was that sanofi would be targeting Genzyme, and unconfirmed reports speculated that sanofi was close to making an unsolicited $18-billion bid, or $70 per share, as I mentioned in a blog post.

The rumors continued throughout August and posts by Stephanie Sutton and Erik Greb shared collected bits and pieces of details about the situation. Various sources and analysts had differing expectations for the deal, such as that Genzyme would take no less than $80 per share. By the end of the month, an official offer letter from sanofi to Genzyme had been announced with an offer of $69 per share. It was promptly rejected by Genzyme.

In October, sanofi made a tender offer of the same price and Genzyme advised shareholders to reject the offer. In November and December of last year, the company issued statements reiterating its position on the tender offer. When fewer than 1% of shares were tendered in early December, sanofi decided to extend the offer another six weeks to Jan. 21, 2011.

Both companies issued statements in early January, and sanofi said the possibility of CVRs and an offer was explored, as well as the potential of Lemtrada. Genzyme confirmed the discussions in a statement. As Stephanie Sutton wrote, the current opinion among analysts was that sanofi would pay $76 per share for Genzyme. When Genzyme announced that it was allowing sanofi to conduct due diligence on Jan. 31, many thought it was only a matter of time until a conclusion to the negotiations was formed and the deal considered a success. Now, after seven months, the companies have reached an agreement.

See related PharmTech articles:

The Latest Sanofi/Genzyme Rumors

Success Is Unlikely on sanofi’s Terms

Genzyme Steals Headlines Again

Sanofi’s Courtship of Genzyme in Limbo

A Turning Point for Genzyme?

Will Sanofi Bag Genzyme?

Is sanofi-aventis On the Acquisition Path?

Bayer is accused of paying competitors such as Barr Laboratories and Watson Pharmaceuticals in the 1990s not to market generic versions of Cipro, an antibiotic, for six years. The agreement allegedly saved Bayer $1 billion in Cipro sales. Recently, a group including large drug wholesalers, pharmacies, unions, and healthcare plans filed an antitrust lawsuit against Bayer and the companies with which it entered this pay-for-delay agreement. These groups, some of which are public entities, purchased Cipro directly and could have saved money if they had been able to buy generic versions of the drug at a lower price.

California Attorney General Kamala D. Harris and 31 other attorneys general signed an amicus brief in support of the plaintiffs, urging the Supreme Court to review pay-for-delay agreements. The brief argues that the deals violate the Hatch–Waxman Act because they discourage the speedy entry of generic competition. The attorneys general also claim that holding a patent on a drug does not grant a company the right to collude with competitors or to pay them not to compete.

A “surge” of these agreements is undermining generic competition and forcing states and consumers to “pay monopolistic prices for branded drugs,” says the brief. Studies by the FTC suggest that the deals cost consumers anywhere between $3.5 and $14 billion each year, the attorneys general argue.

In the absence of robust pipelines bursting with new blockbusters, it’s easy to understand why an innovator company would want to forestall competition (and preserve profits) for as long as possible. But I think that a company that cherishes the free market cannot enter into such agreements in good faith.

We’ve been hearing that the blockbuster model will soon be a thing of the past. Companies such as sanofi-aventis are trying to think ahead by focusing on emerging markets, smaller patient groups, and, yes, even generic drugs. This kind of plan might well sustain drug companies in the absence of blockbusters and, if it works well enough, could help fund the discovery and development of needed new therapies.

If the Supreme Court eventually invalidates pay-for-delay agreements, the pharmaceutical industry should not mourn them. Alternative strategies are already pointing out possible paths to prosperity. I think the industry would be wise to follow sanofi’s example and not to fear competition.