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GlaxoSmithKline settles bad drug case for $750M

admin » 26 October 2010 » In Defective Products, Legal News » No Comments

GlaxoSmithKline settles bad drug case for $750M

British pharmaceutical company GlaxoSmithKline PLC will pay $750 million to settle allegations that it knowingly manufactured and sold adulterated drugs, including the popular antidepressant Paxil, federal prosecutors in Massachusetts said Tuesday.

U.S. Attorney Carmen Ortiz announced that the London-based company will pay $150 million in criminal fines and $600 million in civil penalties related to faulty manufacturing processes at its plant in Cidra, Puerto Rico. The company allowed several drugs to be adulterated between 2001 and 2005, including Paxil CR, a skin-infection ointment called Bactroban, and an anti-nausea drug called Kytril.

GlaxoSmithKline said in a statement that it regrets operating the plant in a manner that violated good manufacturing practices. The company said the plant closed in 2009 due to declining demand for the medicines made there.

Ortiz said that no patients appeared to have been harmed by the quality problems at the plant, which included failing to ensure that Bactroban and Kytril were free of contamination from microorganisms and causing Paxil controlled release tablets to split, causing the potential distribution of tablets that did not have any therapeutic effect.

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J&J Highlights Ongoing Woes For Replacement-Joint Sector

admin » 20 October 2010 » In Legal News, Mass Tort » No Comments

J&J Highlights Ongoing Woes For Replacement-Joint Sector

Johnson & Johnson (JNJ), one of the biggest companies in the $12 billion market for replacement hips and knees, indicated Tuesday that the weak economy continues to pressure sales as patients put off surgery.

The effects may have worsened in recent months, based on J&J’s third-quarter release and a report last week from smaller Biomet Inc. (BMET), which posted softer fiscal-quarter sales than it anticipated. Yet to come are earnings announcements from two other industry heavyweights, Stryker Corp. (SYK) and Zimmer Holdings Inc. (ZMH).

The problem for these companies is that while replacement surgeries address painful, arthritic problems, they can be deferred by patients worried about out-of-pocket costs or long stretches off work for recovery.

“We believe the effects of the weaker economy and the uncertainty that some patients face about their ability to take on additional medical expenses” is causing postponement of elective surgery, said Dominic Caruso, J&J’s chief financial officer, on a conference call. He spoke broadly about the company’s big devices franchise, but said orthopedics is one area in particular where J&J has seen a surgical slowdown.

The discontinuation of extensions of Cobra health benefits for people who lose their jobs has also caused patients to defer surgery, Caruso said.

Stryker shares traded down 1.1% to $49.96 following J&J’s report while Zimmer traded 2.3% lower to $51.03. The declines put Stryker shares down about 1% on the year despite a recent climb while Zimmer, which is more heavily tethered to the hip-and-knee market, has tumbled nearly 14%. The companies haven’t benefited from gains this year in the broader market; the Standard & Poor’s 500 index is up more than 5%.

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Avandia, Pharma, and the New FDA

admin » 06 October 2010 » In FDA, Mass Tort » No Comments

Avandia, Pharma, and the New FDA

The Harvard prof who wrote the book on FDA (literally) deconstructs the decision on Avandia—and its future implications.

GlaxoSmithKline’s diabetes drug Avandia became mired in such controversy regarding its safety in recent years that it was dubbed “another Vioxx”—exactly what the pharmaceutical industry had vowed never to produce. Two weeks ago, FDA’s decided to restrict access to Avandia, earning it “drug of last resort” status. This long-awaited decision was expected, but there were many unexpected aspects to the way the agency made its decision public.

Pharmaceutical Executive asked Daniel Carpenter, a professor of government at Harvard University and the author of a big new book about FDA called Reputation and Power (Princeton University Press) that is getting a lot of attention in the press, for his take on how the Avandia story has played out—and what it may mean for both FDA and pharma in the future. Walter Armstrong

Pharm Exec: FDA decided to leave Avandia on the market and to impose a REMS that essentially turns it into a diabetes drug of last resort. (The drug already carried a black box warning about cardiovascular risks.) GSK has said it will no longer spend any money marketing Avandia, and most analysts agree that new prescriptions will likely come to a halt. So why didn’t the FDA, like the EMA, simply yank the drug?

Daniel Carpenter: I see the Avandia decision as a kind of withdrawal, with a very strong, long-term message for the pharmaceutical industry. Essentially 95 percent or more of the drug’s once-robust market is gone, and the decline is attributable almost entirely to post-marketing studies by third parties and a series of FDA regulatory decisions.

GSK’s decision to discontinue marketing for Avandia was not unrelated to FDA’s decision. My guess is that GSK had an implicit understanding that FDA would allow sales for existing Avandia patients without other alternatives, but only if marketing stopped to new patients.?The FDA can now use a REMS to carve out virtually all of a drug’s market while also satisfying medical libertarians by leaving it to be prescribed for the few who have no alternative. Some consumer advocates have decried the decision to leave the drug on the market. I see it differently: Avandia has been all but taken off the market, and a critical precedent has been established.

If I had told you four years ago that, in the absence of a single randomized clinical trial demonstrating greater cardiovascular risk for the drug, 95 percent of that drug’s market was going to be taken away by virtue of a meta-analysis and post-market epidemiology studies—plus some unsavory evidence revealed about a company’s clinical trial practices and failure to disclosure risk information—I think you would have bet against me.

Vioxx was pulled only when a randomized clinical trial demonstrated greater myocardial infarction risk. In some ways, given the evidence base, FDA’s decision on Avandia is a more aggressive regulatory action. It may well be the right one, but regardless, it’s momentous.

If I had to wager one other thought—based on this case’s circumstantial evidence—it’s that FDA’s leadership might be using Avandia as a try-out opportunity for a tougher REMS. Again, there is a real signal being sent to the drug industry that these REMS are not mere “management tools” but can be used to reduce a drug’s market to a fraction of the sponsor’s original ambitions.

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