DID - July 27, 2007 Issue

Vol. 6 No. 147

House Committees Debate Bill Limiting ESA Reimbursements

The House Energy and Commerce and Ways and Means committees yesterday debated H.R. 3162, the Children’s Health and Medicare Protection Act of 2007, a bill that would reduce Medicare reimbursement rates for erythropoietin-stimulating agents (ESAs).

The bill also would establish a single payment system for centers treating patients with end-stage renal disease (ESRD) and increase rebates manufacturers pay for brand drugs dispensed under Medicaid. However, no votes on the legislation had taken place as of press time.

Under the proposal, which was added to legislation reauthorizing the State Children’s Health Insurance Program, Medicare reimbursement rates for Amgen’s Aranesp (darbepoetin alfa) and Epogen (epoetin alfa) would fall by 4 percent and 3.8 percent, respectively (DID, July 26). In addition, rebates for brand drugs dispensed under the Medicaid program would be increased to 20.1 percent.

In response to the 465-page bill, which was introduced July 24, Amgen said that a bundled reimbursement system for treatment of patients with ESRD, as well as the reduction in reimbursement rates could adversely affect patient outcomes if it is not “carefully considered and/or tested prior to implementation.”

“It is unreasonable to single out a particular product like Epogen that has demonstrated value in the Medicare Part B system,” Amgen said. “Changes to ESRD drug reimbursement from [average sales price] plus 6 percent methodology may result in serious unintended consequences.”

The Congressional Budget Office (CBO) estimates that increasing the brand drug rebates for Medicaid drugs will reduce the federal budget by $3.5 billion between the years of 2008 and 2017. The CBO also estimates that development of a bundled ESRD payment system and attached quality-care incentive payments to dialysis centers will reduce the federal budget a total of $3.2 billion between the years of 2008 and 2017. The changes to ESA reimbursement rates are estimated to save the government $100 million during the same period, the CBO said. — Christopher Hollis

 

Congress Should Give FDA Authority to Regulate Compounding, Advocate Says

Congress must give the FDA the authority to punish pharmacies that illegally compound medications while protecting patients’ access to legally compounded drugs, AngioDynamics President and CEO Eamonn Hobbs said.

The law should also require physicians to notify patients that the compounded drugs they are receiving are not FDA approved, Hobbs added.

Compounding allows pharmacists to manufacture prescription drugs from bulk ingredients when a patient cannot take an FDA-approved medication for medical reasons, such as an allergy to an inactive ingredient in the commercially manufactured drug. Currently, the law does not distinguish between mass manufacturing and legitimate compounding, according to the Consumer Health Alliance for Safe Medication.

A provision allowing the FDA to regulate rogue pharmacies that are mass-compounding drugs should be included in S. 1082 and H.R. 2900, bills that would enhance the agency’s safety authorities, Hobbs said. The bills are currently pending before a Congressional conference committee. 

Sens. Edward Kennedy (D-Mass.), Richard Burr (R-N.C.) and Pat Roberts (R-Kan.) introduced draft legislation earlier this year that would clarify the FDA’s role in regulating compounding (DID, March 20). While the draft bill garnered support from consumer interest groups, the International Academy of Compounding Pharmacists (IACP) has led opponents to “prevent the measure from even seeing the light of day,” Hobbs said.

Critics of the bill say it would make it more difficult for patients to receive necessary compounded prescription medications by adding new requirements for prescribing physicians and pharmacists. Organizations representing more than 60,000 pharmacists sent a letter to the bill’s authors, discouraging them from introducing it (DID, March 9).

However, Hobbs said the IACP was using concern over patient access as a “scare tactic.” The appropriate bill would distinguish between legitimate patient-specific compounding and mass-producing compounding pharmacies, he added. “Let’s not limit the legitimate practice of compounding.”

 The FDA has recently cracked down on companies performing illegal compounding, sending warning letters to manufacturers with orders to stop distributing compounded anesthetic creams and compounding inhalation drugs (DID, Dec. 11, 2006).

Defenders of the practice say the agency is ignoring a federal court ruling last year that compounded drugs are not new drugs and cannot be regulated under the Federal Food, Drug and Cosmetic Act (DID, May 31, 2006). — Emily Ethridge

 

GSK, Ranbaxy Settle Valtrex Litigation

Ranbaxy Laboratories and GlaxoSmithKline (GSK) have entered into an agreement on generic Valtrex, Ranbaxy announced. As part of the settlement, Ranbaxy will launch its generic version of the blockbuster herpes drug in late 2009 with 180 days of market exclusivity.

In January, Ranbaxy became the first to receive FDA approval to market generic Valtrex (valacyclovir HCl) 500- and 1,000-mg tablets (DID, Feb. 6). The drug has total annual sales of approximately $1.3 billion, according to Ranbaxy.

Ranbaxy will begin marketing its product after GSK’s ’924 patent on Valtrex expires in 2009, Ranbaxy said, adding that it has licensed the other two Valtrex patents from GSK. As the first filer, Ranbaxy will have 180 days of marketing exclusivity.

GSK had filed suit in the U.S. District Court for the District of New Jersey in 2003 after Ranbaxy filed an abbreviated new drug application (ANDA) for generic Valtrex with a Paragraph IV certification. GSK alleged that Ranbaxy’s product would infringe on the ’924 patent. The companies have agreed to terminate this lawsuit and to avoid litigation over the other Valtrex patents, according to court documents.

Other companies have filed ANDAs for generic Valtrex, including Mylan Laboratories, which won tentative approval for its product.

Ranbaxy said it would continue to pursue first-filer status when possible, noting that it has first-filer status for approximately 20 pending ANDAs containing Paragraph IV challenges.

GSK did not respond to a request for comment by press time. — Breda Lund

 

AstraZeneca to Cut More Than 7,600 Jobs Due to Acquisition Costs

AstraZeneca will cut more than 7,600 jobs, more than double its previously announced number, after its second quarter profit fell 11 percent because of costs related to the company’s acquisition of MedImmune, the company announced.

Earlier this year, the company said it would cut 3,000 jobs by 2010 to help with anticipated losses from generic competition (DID, Feb. 2). AstraZeneca will cut 700 R&D positions, 1,800 information systems and business infrastructure jobs, 1,800 in European sales and marketing jobs and 3,300 in operations, company CEO David Brennan said.

AstraZeneca is acquiring MedImmune for $15.6 billion to increase its share in the biologics and vaccines markets, augment its pipeline and improve the company’s ability to develop products more quickly, the company said (DID, April 24). When it announced the deal, AstraZeneca predicted the move would bring in $500 million in revenue annually by 2009.

Acquiring MedImmune increased second-quarter sales by $24 million, but also brought an operating loss of $103 million, the company said.

AstraZeneca currently has eight products in Phase III clinical trials and is “well positioned to deliver its biologics strategy on a greatly accelerated timeline,” Brennan said.

Overall, second-quarter sales in 2007 increased 6 percent from this time last year to $7.2 billion, according to AstraZeneca. However, sales of acid reflux disease treatment Nexium (esomeprazole magnesium) fell 1 percent in the U.S. because of generic competition, the company said.

Second-quarter U.S. sales of schizophrenia drug Seroquel (quetiapine fumarate) increased 9 percent, according to AstraZeneca. The company added it plans to launch Seroquel XR in August to treat schizophrenia in adult patients in the U.S.
 
Sales of asthma treatment Symbicort (budesonide/formoterol fumarate dihydrate) rose 25 percent in the second quarter to $414 million after the company started to market it in the U.S. in June, AstraZeneca said.

After the MedImmune deal was announced, a shareholder filed a class action lawsuit to stop the buyout deal with AstraZeneca, saying the agreement benefits the company’s executives more than its public stockholders (DID, May 17). MedImmune said the lawsuit is “without merit.”

MedImmune recently received a $55.1 million contract from HHS to modify and expand its FluMist manufacturing processes at its existing facilities (DID, June 18). — Emily Ethridge

 

Bristol-Myers Squibb Profits Up; Plavix Gets Credit

Bristol-Myers Squibb (BMS) reported a net income of $706 million in the second quarter, a 5.8 percent increase from $667 million in the second quarter of 2006. Net sales were up 1 percent to $4.9 billion, but for the first six months of the year they declined 1 percent to $9.4 billion.

The company’s strong profits were attributed in part to Plavix (clopidogrel bisulfate). For the first time ever, sales of this drug topped $1 billion in the second quarter in the U.S., CEO James Cornelius said.

“Importantly for both Bristol-Myers Squibb and the research-based pharmaceutical industry, the courts reinforced intellectual property rights by upholding the validity of the Plavix patent,” Cornelius said. Supplies of generic clopidogrel bisulfate have been substantially depleted, which helped lift sales of the brand drug, the company said.

The FDA has recently agreed to grant priority review for a number of BMS products:

  • A supplemental new drug application (sNDA) for the leukemia drug Sprycel (dasatinib), for which the European Medicines Agency’s Committee for Human Medicinal Products has issued a positive opinion;
  • Two sNDAs for the atypical antipsychotic Abilify (aripiprazole) for the treatment of teenage patients suffering from schizophrenia and for adults with major depressive disorder;
  • A new drug application for ixabepilone, an investigational drug for patients with metastatic or locally advanced breast cancer who have failed other therapies; and
  • A supplemental biologics license application for Erbitux (cetuximab), for third-line treatment of patients with metastatic colorectal cancer.

In addition, BMS said that its rheumatoid arthritis drug Orencia (abatacept) was approved by the European Commission in May, and has received approval and/or reimbursement in several European markets, including the UK, Germany, Austria, Sweden, the Netherlands and Denmark. Also, BMS and its partner AstraZeneca have decided to move the investigational diabetes drug dapagliflozin into Phase III testing based on the results of Phase II clinical trials. — Martin Gidron

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Reporters: Martin Gidron, Emily Ethridge, April Astor, Breda Lund, Christopher Hollis

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