The Burrill Report

GlaxoSmithKline said it will pay $40.8 million as part of a settlement with 37 states and the District of Columbia over manufacturing issues at its plant in Cidra, Puerto Rico. The attorneys general alleged that from 2001 to 2004 drug batches were manufactured improperly and distributed nationwide. The investigation involved instances where certain batches were not sterilized or in other cases medication contained different dosages than indicated on the bottle, among other alleged violations. The drugs manufactured during this time include: Kytril, used to prevent nausea and vomiting caused by chemotherapy and radiation therapy; Bactroban, an antibiotic ointment for skin infections; Paxil CR, a controlled release formulation of the antidepressant drug, Paxil; and Avandamet, a combination Type II diabetes drug. The company said it reached the settlement to avoid the expense and uncertainty of litigation. It did not admit any wrongdoing or liability under any of the state’s consumer protection laws, it said. Prior to selling the facility, the company said it brought it into compliance and to a high level of performance that satisfied both GSK and the FDA.

The U.S. Food and Drug Administration said it would not approve Remoxy, an abuse resistant pain killer developed by Pfizer and Pain Therapeutics. Pfizer said it is reviewing the decision from the FDA and has plans to have further discussion with the agency over the extended-release opioid. Pain Therapeutics initially filed for approval to market the drug in 2008. The FDA rejected that application the same year. King Pharmaceuticals took over development of the drug and filed for approval at the end of 2009. Pfizer obtained rights to the drug through its acquisition of King.

A U.S. appeals court ruled that Merck’s Schering-Plough division will not get a new trial after a judge denied its claims to $473 million in federal income tax refunds, Bloomberg reported. Schering-Plough, which Merck acquired for $51 billion in 2009, sued the Internal Revenue Service in 2005 to recoup the taxes after the IRS assessed them following an audit. Schering-Plough argued that funds it received as the result of two interest-rate swap transactions weren’t taxable as proceeds of loans from foreign subsidiaries and that the company was being treated unfairly by the IRS, which hadn’t demanded the same taxes from other companies that were in similar situations. The U.S. Court of Appeals upheld the judge’s ruling, saying the transactions were loans and that the IRS may treat taxpayers differently.

The U.S. Supreme Court refused to hear Pfizer’s appeal of a $58 million award to three Nevada women who developed breast cancer after using the company’s Premarin and Prempro menopause drugs, Bloomberg reported. The hormone replacement therapy was marketed by the company’s Wyeth unit. The award is the largest to be upheld of thousands stemming from hormone replacement lawsuits, Bloomberg said. More than 6 million women took Prempro and other menopause drugs before a 2002 study linked the therapy to cancer. In the case involving the Nevada women, the Nevada Supreme Court said the jurors properly held Pfizer’s Wyeth unit responsible for hiding the breast-cancer risks of Premarin and Prempro. The original judgment totaled $134.1 million, but the trial judge reduced the award to $57.6 million.

Merck KGaA said it will end development of cladribine, its pill for multiple sclerosis, because of the U.S. Food and Drug Administration’s concerns about its safety, Reuters reported. Merck also said it planned to withdraw cladribine from markets in Australia and Russia, where it was already approved and marketed as Movectro. Merck said ongoing trials seemed unlikely to address regulator’s safety concerns and that additional trials would not justify their costs.

Diamyd Medical said it has decided to cease dosing patients and will end a late-stage trial of its type 1 diabetes treatment Diamyd in the United States after a blinded review of the efficacy data and the negative outcome of a separate late-stage trial in Europe. The decision followed a consultation with the U.S. Food and Drug Administration. The research consortium Type 1 Diabetes TrialNet is conducting a mid-stage trial with Diamyd in the United States and Canada with a similar study design. An externally funded and researcher-initiated mid-stage trial study with Diamyd aiming to prevent type 1 diabetes in children at high risk of developing the disease is in progress. The company said that study is not affected by the findings in the two late-stage trials.

Labopharm said that Angelini Labopharm, the company's joint venture with Gruppo Angelini which markets and sells the antidepressant Oleptro in the United States, has announced the reduction of the size of its sales force to 65 from 130 representatives in an effort to contain costs. The reduction of the salesforce is expected to result in annual cost savings to Angelini Labopharm of approximately $10.6 million. The company previously announced that it was reviewing the Oleptro commercialization effort in the United States and has entered into discussions to restructure its agreement with Gruppo Angelini to further preserve capital. Labopharm has not provided any funding to the Angelini Labopharm joint venture since March of 2011.

June 22, 2011
http://www.burrillreport.com/article-gsk_to_pay_40_8_million_to_settle_case_over_puerto_rico_plant.html