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TRIALS AND TRIBULATIONS

Omnicare, Ivax to Pay $112 Million to Settle Kickback Charges

The weekly round-up of selected failed trials, missed targets and other business mishaps.

Omnicare, the nation’s largest
nursing home pharmacy, and Teva Pharmaceutical subsidiary Ivax Pharmaceuticals will pay a combined $112 million to settle charges stemming from an alleged kickback scheme, the U.S. Department of Justice said. Under the settlement, Covington, Kentucky-based Omnicare will pay $98 million, and the Weston, Florida-based drug maker IVAX will pay $14 million. About $68.5 million of the settlement proceeds will go to the United States, while $43.5 million has been allocated to cover Medicaid program claims by participating states. The settlement with Omnicare resolves allegations that the company solicited or paid a variety of kickbacks. At the same time, the United States announced that it has intervened and filed a complaint against two large nursing home chains, Mariner Health Care and SavaSeniorCare Administrative Services, both of Atlanta, and their principals for accepting a kickback from Omnicare in return for pharmacy services contracts.
Health authorities in the Netherlands have halted use of a batch of Pfizer’s pneumonia vaccine Prevenar after three infants died within two weeks of receiving it, Reuters reported. A spokeswoman for the National Institute for Public Health and the Environment said on average between five and 10 deaths are reported annually after babies are vaccinated. The agency is investigating the deaths and the European Medicines Agency is working with the Dutch to determine if there is any safety issues with the particular batch of vaccine, which contains 110,000 doses. Pfizer said its own preliminary investigation found no link between the vaccine and the deaths. Other batches of the vaccine continue to be used. Wyeth generated revenue of $2.7 billion in 2008 from sales of the vaccine.
The U.S. Food and Drug Administration denied a request from Merck to accepts is application for a cholesterol pill that combines Pfizer’s Lipitor with Zetia, a drug Merck markets with Schering-Plough, the company disclosed in a filing with the U.S. Securities and Exchange Commission. Merck applied for approval to market the combination pill in September, but the FDA said it wanted more data on the manufacturing and stability of the drug before it would consider the application, the Associated Press reported.
Shares of GTx plunged about 50 percent after the drug developer said the U.S. Food and Drug Administration told the company it wanted additional data before it would consider approving the company’s Memphis, Tennessee biopharmaceutical’s drug toremifene, which is being developed to reduce fractures in men with prostate cancer receiving androgen deprivation therapy. The FDA identified two deficiencies in a letter sent to the company and recommended a second late-stage clinical study demonstrating the safety and efficacy of toremifene. It also wants to see data that shows toremifene does not have a detrimental effect on either time-to-disease progression or overall survival. GTx is requesting a meeting with the FDA to determine the appropriate next steps regarding application to begin marketing torermifene.
Johnson & Johnson said as part of a global restructuring it will eliminate between 6,000 and 7,000 jobs as it takes steps to prioritize efforts around growth opportunities in healthcare and to bring key new products to market. The company said cost savings will be achieved primarily by reducing layers of management, increasing individual spans of control, and simplifying business structures and processes across the company's global operations. The company estimates that position eliminations will be in a range of 6-7 percent of its global workforce.
The U.S. Food and Drug Administration issued an alert on possible kidney function problems including kidney failure in patients using the type 2 diabetes drug Byetta, which is marketed by Eli Lilly and Amylin Pharmaceuticals. The FDA said from April 2005 through October 2008, it received 78 reports of problems with kidney function in patients using Byetta. Some cases occurred in patients with pre-existing kidney disease or in patients with one or more risk factors for developing kidney problems. “The FDA update issued today aligns with the Byetta label approved last week. The current label reflects our understanding of post-marketing reports of renal events and provides physicians with updated guidance about appropriate use in patients with renal conditions," says Orville Kolterman, senior vice president of research and development, Amylin Pharmaceuticals. "There is no evidence from preclinical and clinical studies that Byetta has any direct toxic effect on the kidney. Post-marketing reports of serious changes in renal function have been rare and usually complicated by other factors that could have contributed to the kidney problems.”

Copenhagen-based Genmab says it will sell its U.S. manufacturing facility in Brooklyn Park, Minnesota and eliminate about 300 jobs internationally as part of a reorganization to match resources to ongoing and future needs. Genmab will continue to create new antibodies with the potential to treat cancer. The company does not intend to discontinue any of its ongoing development programs as a result of this reorganization and expects to conduct a pivotal study of zalutumumab in head and neck cancer in 2010. Genmab says it will adopt a more flexible model based on contracts with vendors to address varying demand for clinical development work going forward. It will also meet future manufacturing requirements through working with contract manufacturing vendors. The annualized impact of the reorganization is estimated to yield savings of approximately $59.8 million (DKK 300 million), including non-cash items of approximately $11.9 million (DKK 60 million).

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