The Burrill Report


Federal investigators in several states are asking Europe’s biggest drugmaker for information. The U.S. attorney’s office in Manhattan, New York, is demanding information from Novartis regarding its specialty pharmaceutical products including Gleevec, a cancer medicine, and Gilenya, the first oral therapeutic for multiple sclerosis. The U.S. attorney's office in Louisville, Kentucky, is conducting a probe into the company's marketing of several medicines, including the blood-pressure drug Tekturna and its combination products. The feds have requested marketing material, including those related to health-care provider payments. That investigation is “civil and criminal in nature,” says Novartis, adding that it is cooperating with the probe. The company also disclosed that U.S. authorities in Dallas, Texas, are investigating the export of products made by the company's Alcon eye-care unit to various countries under U.S. trade sanctions, including Iran. The grand jury subpoena requests documents from 2005 to 2011, the year Novartis’ acquisition of Alcon was completed.

GlaxoSmithKline, is notifying its suppliers that they will have to wait an extra month to receive payment from the company. The world’s fourth largest pharmaceutical company is sending letters to its suppliers, some of them small businesses, that it will be 90 days, rather than 60, before payments are received. The move prompted the Forum of Private Business to induct GSK into their Hall of Shame. “What makes the GSK case all the worse is the sheer size and profitability of the firm—the fourth biggest pharmaceutical company on the planet,” says Forum spokesman Robert Downes. “This is not a business struggling to make its way in the world.”

Impax Laboratories received a complete response letter from The Food and Drug Administration regarding their New Drug Application for Rytary, an extended-release formulation of carbidopa-levodopa for treatment of Parkinson’s disease. The FDA is concerned over repeated manufacturing and quality control issues at the facility, ranging from sampling and testing issues to production record reviews. The company withdrew the facility as an alternative site of manufacturing for the drug and said it will work with the FDA to resolve the issues. Earlier inspections led to a recall of the company’s generic version of the cholesterol-fighting drug, Fenofibrate, in 2011.

Novartis cut the pay of its CEO Joseph Jimenez by about 16 percent to $14.2 million (13.2 million Swiss francs) including cash, bonus, pension and other benefits, down from $16.89 million (15.7 million Swiss francs) in 2011. It also reduced the salary of departing chairman Daniel Vasella by 3 percent. Jimenez, the highest paid executive on the Swiss stock exchange in 2011, has been vocal in his opposition to a referendum up for public vote in early March that could force companies to accept the limits shareholders place on executive compensation. Jimenez says it could damage the drugmaker's competitiveness and “that would put Novartis or any Swiss company at a significant disadvantage to attract talent.”

Newly released court records show that the Johnson & Johnson’s DePuy Orthopedics division internal analysis in 2011 indicated that its all-metal Articular Surface Replacement, or ASR, hip device would fail within five years in more than one-third of patients receiving the implant up to that date, The New York Times reported. The company recalled the device in 2010. The analysis also suggests that the implant is likely to fail prematurely over the next few years in thousands more patients. At issue in the first of many trials is what Johnson & Johnson officials knew, when they knew it, and what they chose to downplay. In last week’s pretrial testimony, a DePuy engineer said that as early as 2008 the company was aware that the ASR surface was releasing high levels of metallic ions, particularly in women, prompting a quick redesign of the implant. The ASR was the most unreliable of the metal hip implants used for standard hip replacement, in part for its release of metallic debris into a patient’s tissue and bone, causing damage. Nearly 10,000 patient lawsuits relating to the implants are moving through the California and Ohio federal courts.

January 24, 2013
http://www.burrillreport.com/article-novartis_under_investigation_on_multiple_fronts.html