Wednesday, February 10, 2010
Korea to Crack Down on Bribe-Taking Doctors
By Kim Tae-gyu
Staff ReporterWhen it comes to bribery in the medical field, it is mostly the companies offering the bribes that are subject to prosecution in the local pharmaceutical industry. In the future, however, those who accept kickbacks in return for prescribing certain drugs may also have to worry about being imprisoned.
Rep. Choi Young-hee of the main opposition Democratic Party said Wednesday that she had proposed a bill that, if passed into law, would impose a maximum five-year jail term or 20 million won in fines on those accepting such bribes.
Those that get caught would also have to pay up to an additional fine of 50 times the amount of the kickbacks they received.
``The practice of bribery in the pharmaceutical industry is not just personal deals between companies and doctors. The practice has become a serious social malaise of late and we need to fix it as soon as possible,'' Choi said.
``On top of the fine or jail term, we need to discourage any potential rule breakers by levying monetary penalties of up to 50 times the money they take illegally. It's the `economics of crime.'''
The economics of crime refers to the hypothesis that the probability and severity of punishment have a deterrent effect on potential criminals based on the benefit-cost framework.
For example, potential bribe-taking doctors compare the benefits that they would gain by taking illegal rebates to the costs they may have to burden. As the likelihood that they will be caught or the punishment rise, the desire to commit wrongdoings decreases.
Put in terms of basic economics, a high price of crime scares away prospective criminals.
Thus far, only the drug makers have been subject to jail terms when they are caught offering bribes to doctors or pharmacists. Plus, they also have to reduce the prices of their drugs by 20 percent in accordance with the recently introduced set of regulations.
However, there are no specific regulations that penalize those who take the kickbacks, which Choi says causes high drug prices and affects the lives of those involved.
``Some salespeople committed suicide recently due, reportedly, to issues related to the bribes. We are required to take measures to clear away the problems,'' Choi said.
``I expect that the National Assembly may pass the bill this month. Then, after the six-month grace period, the regulations would go into effect midway through this year,'' the first-term lawmaker said.
Also included in the bill are measures to protect whistle blowers - those who report bribes offered by pharmaceutical companies to the authorities.
Big Pharma - Quo Vadis?
There are three main strategies in play - the mega-merger path, diversification route, and the focused prescription-drug strategy - each with a different risk/return characteristic.
Investors Chronicle
Merck - Vioxx: "marketing masquerading as science"
Merck & Co. agreed to settle shareholder lawsuits over the withdrawn Vioxx painkiller by strengthening its drug-safety procedures, appointing a new chief medical officer and paying $12.2 million in legal fees.
Merck would appoint one committee to address risks that require immediate action and another to monitor the safety of drugs, the company said in a regulatory filing. Merck would also amend its code of conduct to promote scientific and academic integrity as well “honest communication” with doctors.
“In all research endeavors that are sponsored by Merck, we will refrain from attempting to influence inappropriately the results and conclusions of such research,” according to the amended code. “We strive for all communications with the medical community to be accurate, truthful and consistent with labeling.”
Merck withdrew Vioxx in 2004 after a study showed it doubled the risk of heart attacks and strokes. The company won 11 of 16 Vioxx suits at trial before agreeing in 2007 to create a $4.85 billion settlement fund to resolve thousands of injury claims over the drug. Plaintiffs’ experts said Merck distorted the health risks of Vioxx in medical literature, advertisements and statements to doctors by sales representatives.
The settlement, which won preliminary approval from a New Jersey state judge yesterday, would resolve all so-called derivative lawsuits, which are for the benefit of the company rather than just shareholders. An approval hearing is scheduled for March 22 in Atlantic City, New Jersey.
‘Most Appropriate Way’
Merck “believes this is the best and most appropriate way to resolve these suits and enable the company to put this matter behind it,” said Ron Rogers, a spokesman for Merck, based in Whitehouse Station, New Jersey.
The settlement, which covers federal and New Jersey state shareholder cases, isn’t an admission of wrongdoing on the part of Merck or the executives named in the suit, Rogers said. The company will be required to make corporate governance changes and “supplement existing policies and procedures,” he said.
In testimony videotaped in 2006 for the Vioxx trials, Harvard Medical School professor Jerome Avorn said Merck failed to conduct adequate studies of Vioxx’s risks before launching it in 1999 as an alternative to painkillers that caused more stomach bleeding. Merck also misled doctors about a 2000 study that showed Vioxx caused five times more heart attacks than another painkiller, naproxen, he said.
“There was a pattern of what I would characterize as systematic distortion that rose almost to the level of grotesque,” Avorn said in a tape played in federal court in New Orleans. “It was an embarrassment for me as a member of the medical profession that this was going on in presenting information to doctors in such a one-sided and lopsided way.”
Marketing Tool
One Merck study designed to show Vioxx was easier on the stomach than an older painkiller was actually a marketing tool to boost sales, according to a 2008 report in the Annals of Internal Medicine. The study, known as Advantage, was a trial of 5,557 patients started in 1999, just as Vioxx was cleared for sale.
The study, which recruited 600 doctors, was crafted by Merck’s marketing department, according to researchers who reviewed 100 internal company memos and reports.
The Advantage study “was marketing masquerading as science,” the lead author of the Annals report, Kevin Hill of Harvard Medical School in Boston, said in a 2008 interview. “They went about this in a very analytic way, picking doctors who would be most influential, who will talk to other doctors and recommend Vioxx to them, and thus increase prescriptions in the area, planting the seeds of additional Vioxx use.”
Under the settlement announced today, Merck would submit results of clinical trials to a public registry, with its compliance overseen by an independent third party.
The chief medical officer would have an “executive voice” on product safety issues independent of Merck Research Laboratories. The appointee would serve as Merck’s “medical ambassador,” report to the chief executive officer and serve on the executive committee.
Bloomberg
shearlings got plowed: How Does One Possibly Digest -- And Distill -- 5.5 Million Pages?
A commenter tonight asked a pair of very good questions -- on the 5.5 million pages of Vytorin-ENHANCE federal class action discovery production, now underway in a series of cases.
The comenter asked "Is the volume unusual?" and "How does all that paper get handled?" -- Here are my answers (feel free to chime in in comments, you plaintiffs' securities class action lawyers!):
This is -- even when compared to some mass tort case settings -- an extremely large volume of responsive documents.[Part of the reason there are so many here preserved, is likely due to the fact that so many agencies promptly began investigating -- especially Senator Grassley's office -- thus forcing almost real-time preservation of documents, from about September 2007, onward.]
But to be clear, perhaps upward of 50 percent of the pages are likely duplicates (copies of every memo, copied to every recipient, for example -- all produced separately), for that is what the rules require. Even so, there will be small differences -- someone may have scribbled in the margin of his or her copy -- so it all is provided.
As to how it is handled, surely lots of junior people will sift through them, but in a series of cases (like these) with such high stakes, the lawyers will likely scan and digitize the entire dump, to the extent the Congressional Committees haven't already done so (via a third party
service provider -- with full text recognition capability), and then have a searchable database (on CD-ROM, and maybe even on a secure internet file-server, available to all the lead plaintiffs' law-firms, and coordinating counsels) of every document that mentions (for example) both "Enrico Veltri" and "outlier data". One might also search that surname, with the phrase "f*ck off" -- Ooh wait, we already have that document. [But I digress.]
Where was I? Oh. Right. The document data-base service provider will likely be instructed to separately flag, and put in a so-called "sidecar", all the documents with hand-written notes on them.
Those, a senior lawyer with a good grasp of the claims and defenses will need to read carefully. And then, on some of them, s/he will prepare question-lines, for depositions. These documents will then be shown to subject-matter experts -- to get their opinions -- on both sides of the fence. . . .
Any other experiences to share, out there?
Tuesday, February 09, 2010
Mississippi Settles Zyprexa Suit for $18.5M
NICE Says Novartis, BMS Cancer Drugs Too Expensive
The HCC interviewed Dr. Gordon Guyatt to discuss the major flaws in the way the Crestor JUPITER trial was conducted and reported.
Lechleiter pay rises 54% in 1st full year as Lilly CEO - Yahoo! Finance
INDIANAPOLIS (AP) -- Eli Lilly and Co. CEO John Lechleiter received a compensation package valued at $16.4 million for 2009, up 54 percent from 2008, the year he became the drug maker's chief executive, according to an Associated Press calculation of figures disclosed Monday in a regulatory filing.
Also president and chairman, his salary rose nearly 11 percent to $1.48 million and his performance-related cash bonus jumped 31 percent to $3.55 million.
Lechleiter, 56, also was granted stock valued at $11.25 million when it was awarded in February 2009. He won't receive $3.75 million of that total until 2011, spokesman Mark Taylor said.
Lilly makes top selling drugs including the anti-psychotic Zyprexa and the antidepressant Cymbalta. Lechleiter took over as CEO from Sidney Taurel on April 1, 2008.
Lechleiter's salary and bonus rose in part because 2009 was his first full year as CEO. The company's 2008 performance also played a role, according to a preliminary proxy statement filed with the Securities and Exchange Commission.
Lechleiter successfully took over from Taurel and "aggressively expanded" Lilly's product portfolio by completing the acquisition of cancer drug maker ImClone Systems Inc., the proxy said. He also reduced management layers and "implemented wide-ranging productivity improvements."
Of the equity awards valued at $11.25 million, Lechleiter will receive a total valued at $7.5 million based on the company's 2009 performance. The remainder, which he receives in 2011, will be based on Lilly's performance last year and in 2010.
Taylor said the value of the awards Lechleiter actually receives can change by the time he gets them, depending on company performance.
Lechleiter also received $89,000 to match his savings plan contribution and $1,091 to reimburse him for taxes due on expenses covered by the company for his wife to attend company functions.
Lilly shares fell 11 percent last year to close 2009 at $35.71. Many health care stocks rose and sank through the year in reaction to a Congressional debate over a possible health care system overhaul.
Lilly earned $4.33 billion last year, as revenue rose 7 percent to $21.8 billion. Eight of the company's drugs rang up more than $1 billion in sales, led by Zyprexa's $4.9 billion.
But analysts also have expressed concern about Lilly's ability to fill looming revenue holes that will be created when the patents protecting several key drugs expire in the next few years. Zyprexa's patent expires next year.
The company launched the blood thinner Effient in the U.S. last summer, but the drug's performance so far has left several analysts unimpressed. Effient gained only $3.8 million in sales in the fourth quarter, as the company worked to introduce it to doctors and hospitals.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.
Monday, February 08, 2010
FT.com / UK - Pfizer launches drugs e-payment system
Introducing Pharma Reform Blog
Here's a recent post:
No single event, single offense, issue, or individual company can be identified as the source of or considered responsible for the market distrust of the pharmaceutical industry. This has been a cumulative affect over the past 30 years or so of modern day Pharma. It is important to identify, recognize, and acknowledge the sources of distrust before solutions can credibly and effectively be formulated.
Here are the 5 major sources of market distrust of the pharmaceutical industry:
- Lack of honesty and full disclosure about product information (Corporate, Marketing, Sales, and Scientific integrity issues)
- Not disclosing, not acknowledging or downplaying potential serious adverse reactions and side effects (e.g., many including Fen-Phen, Vioxx®, OxyContin® , Ketek®)
- Exaggerated product claims in marketing or in sales presentations…especially comparative claims
- Scientific data manipulation to highlight benefits, exaggerate efficacy while carefully downplaying side effects and adverse reactions
- Deception in advertising (paid actors or celebrities to project credibility as they play healthcare providers or miraculously recovered or satisfied patients)
- “Off-label” promotion (e.g., many such as Neurontin® and Bextra®)
- Companies not willing to spend the money to prove the claims but willing to encourage physicians to subject patients to uncontrolled experimental use
- Questionable physician payments, inducements, and “conflicts of interest”
- Extraordinary Speaking fees and resort location training programs
- Excessive consulting fees, including suspect clinical study payments
- Board of Director fees (hundreds of thousands of dollars)
- Office practice meals, tchotchkes, and other perks
- Expensive meals, cultural or sporting events (e.g., Broadway shows, golf outings) for physicians and other healthcare providers who can influence prescribing
- Pervasiveness of industry influence on scientific and medical communications
- Promotional programs presented as CME
- CME program development and sponsorship
- Medical Science Liaisons as safe harbors for scientific exchange of product information
- Publications, including sponsoring ghostwritten articles and books
- Journal advertising in medical journals
- Scientific and medical conference participation and exhibits
- Internet medical information sites
- Pricing practices
- Pricing fraud (especially as it relates to Medicare and Medicaid)
- Unsubstantiated high prices (lacking credible rationale or cost benefit data)
- High price increases (recent 9.3% increase compared to -0.3% for general inflation (CPI-U)
This is now a complex, multifaceted, and time entrenched distrust. Can the industry afford to ignore it? If the industry or a company decides to work on this, what should they do? What can they do? Stay tuned.
mike@pharmareform.com
Insider will Mike:
http://www.pharmareform.com/
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