Numerous clinical trials in India have been cancelled due to an unstable regulatory environment leaving the $500 million industry functioning at one-fifth of its capacity. India’s health ministry recently amended its Drugs and Cosmetics Act with new provisions for regulation and ethical supervision of trials, compensation of trial subjects, and mandatory accreditation of all stakeholders including institutional review boards, research institutions, sponsors and contract research organizations. This prompted clinical trial sponsors, including the U.S. National Institutes of Health, to cancel trials and move them to Malaysia and Canada. The NIH has cancelled approximately 40 ongoing trials in the country. M.K. Bhan, a former secretary with the Indian government’s biotechnology department, said the current crisis in the sector is a consequence of the government’s overreaction. “There were problems in the way some trials were conducted as well as issues in the way clinical trials are governed. What we’ve seen now is a bit of an overreaction as part of course correction. There will be balance soon,” he told The Mint, an outlet for the Wall Street Journal in India. Between January 2005 and June 2012, India approved 475 clinical trials for “new chemical entities” not used as drugs elsewhere in the world, according to The Mint. In documents submitted by the Drugs Controller General of India to the Indian Supreme Court, 11,972 adverse effects-excluding deaths-were reported in the period, with 506 directly related to the trials. Deaths from trials were tallied at 2,644 during the last five years.

The U.K.'s National Institute for Health and Care Excellence issued draft guidance against recommending Pfizer’s drug bosutinib, marketed as Bosulif, for previously treated chronic myeloid leukemia. The independent appraisal committee was not satisfied with the quality of data submitted for the comparator in the application nor was it convinced by the relative treatment effect between bosutinib, a dual kinase inhibitor that targets Abl and Src kinases, and the already-approved Abl tyrosine kinase inhibitors from Novartis, imatinib (Gleevec) and nilotinib. The cost of the drug was estimated to be $28,000 for each quality-adjusted life year with an incremental cost-effectiveness ratio of up to $88,000 if patients continued to take it until progressing to an advanced phase of chronic myeloid leukemia. The committee determined that even with the proposed patient access plan to reduce the overall cost of treatment, the drug did not offer enough benefit to justify its price. The drug is licensed for treatment in patients without the mutation that creates the bcr-abl fusion protein, and for whom imatinib, nilotinib and dasatinib are not appropriate.

The U.S. Food and Drug Administration’s anesthetic and analgesic drug products advisory committee cancelled review of Merck’s experimental drug for the reversal of anesthesia-induced neuromuscular blockade, sugammadex. The agency said it needs more time to review clinical trial site inspection data from a site where a hypersensitivity study was conducted. Sugammadex is marketed in 40 countries outside the U.S. to reverse the effects of two specific muscle relaxants used during surgery, and was acquired by Merck when it bought Schering-Plough in 2009 for $41 billion.

Michael Baker, the former CEO and director of ArthroCare, and Michael Gluk, the company’s former chief financial officer, surrendered to authorities after being indicted in federal court for multiple counts of securities fraud, wire fraud, and making false statements, according to the U.S. Department of Justice. The two former executives of the Austin, Texas-based medical device company were accused of leading a $400 million scheme to defraud the company’s shareholders. The indictment alleges that from at least December 2005 through December 2008, Baker, Gluk, and other senior executives and employees of ArthroCare allegedly inflated ArthroCare’s sales and revenue to boost its stock, ultimately causing hundreds of millions in losses in shareholder value. According to court documents, the executives determined the type and amount of product to be shipped to distributors based on the company’s need to meet Wall Street analyst forecasts, rather than on the distributors’ actual orders. The company then parked millions of dollars worth of ArthroCare’s medical devices at its distributors and reported these shipments as sales in its quarterly and annual filings, enabling the company to meet or exceed internal and external earnings forecasts. The indictment alleges that ArthroCare’s distributors agreed to accept shipment of millions of dollars of product in exchange for substantial, upfront cash commissions; extended payment terms; and the ability to return product, as well as other special conditions, allowing ArthroCare to falsely inflate its revenue. Baker, Gluk, and others allegedly used DiscoCare, a privately owned Delaware corporation, as one of the distributors and then acquired DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare’s relationship with the distributor. The indictment further alleges that when Baker was deposed by the U.S. Securities and Exchange Commission about the DiscoCare relationship in November 2009, he lied on multiple occasions. The indictment seeks forfeiture of assets held by Baker and Gluk and prison terms of 25 years for the conspiracy charges, 20 years for each count of wire fraud, and 25 years for each securities fraud count. Baker also faces five years for each count of false statements if found guilty.

Biogen Idec’s Cambridge, Massachusetts facility received a form 483 from the U.S. Food and Drug Administration notifying the company’s management of objectionable conditions after the company released a drug substance destined for compounding that contained white particles. The material was examined by the Biogen material review board and the board recommended releasing the questionable lot, even though it contained particles later determined to be protein aggregates. The FDA called the board’s investigation “inadequate” because the cause of the particle formation was not determined, the particles had not been seen before, and “there was no clinical impact assessment of the presence of the white particles in the pooled drug substance.” Investigators also discovered that the lot was not placed in the Biogen stability program for monitoring and evaluation.

Pfizer has agreed on a final settlement for about 660 lawsuits remaining out of an original nearly 2,700 cases related to its anti-smoking therapy, varenicline, marketed as Chantix. The lawsuits were filed between 2009 and 2012 by people alleging a variety of psychological problems, including suicides or suicide attempts. In late February Pfizer told the U.S. Securities and Exchange Commission that it had reached settlements in about 80 percent of the 2,700 cases, was assuming a loss of $273 million to settle them, and expected to spend another $15 million to settle the remaining cases. Varenicline is a nicotinic receptor partial agonist, in that it stimulates nicotine receptors more weakly than nicotine and reduces cravings for and decreases the pleasurable effects of cigarettes and other tobacco products. In May 2008, Pfizer updated the safety information to indicate that some patients report changes in behavior, agitation, depressed mood, suicidal thoughts or actions, and in July 2009, the FDA required a black box warning. The drug is approved for use in more than 100 countries and prescribed to 18 million adult patients worldwide, including more than 9 million in the United States.