BrandweekNRX

Schering-Plough Now Faces Civil Suits Over Off-Label Kickback Scheme on Cancer Drugs Temodar and Intron

In August last year, Schering-Plough settled an investigation of off-label marketing of its cancer drugs. The company paid $435 million to make the feds go away. Now SP has a new problem—on Friday, a civil class action suit was filed by two health benefit plans who want to be reimbursed for money spent on drugs wrongly prescribed.

Some selections from the suit (download below):

“Schering carried out an unlawful scheme to corrupt doctors’ judgment in two ways: First, Defendant Schering disseminated false and misleading information about the efficacy and safety of their drugs and, second, defendant Schering paid doctors money to induce or persuade them to prescribe Schering drugs.”

“Schering paid bribes and kickbacks to doctors to influence them to prescribe Temodar and Intron Franchise drugs for off-label uses when they otherwise would not have done so.”

“Schering received in excess of $3.4 billion in before tax profits, representing ill-gotten gains to which it was not entitled.”

Download consolidated_amended810d49.pdf

Lilly Drops Its Prescription Assistance Program for the Poor

In a little-noticed move, Lilly has dropped “Lilly Answers,” its Patient Assistance Program for people without health insurance. Merrill Lynch’s David Risinger noted that ending the free-drugs-for-poor-people effort may have helped goose Lilly’s 1Q numbers.

“Eli Lilly reported 1Q pro forma U.S. sales up 11% YOY, including 10% net price and 1% volume.  The net price benefit was surprising because the transition of dual eligibles (Medicaid to Medicare) annualized January 1, 2007.  We think a key factor was less free goods due to the ending of the 'Lilly Answers' patient assistance program on December 31, 2006.  Many prescriptions previously filled under that program are now covered by payers (particularly Medicare Part D), which boosts realized net price dramatically in some cases (i.e. Forteo).”

Risinger, writing in a note to investors, continued:

“Ending of Lilly Answers helped price but hurt volume; ‘Lilly Answers,’ a program to provide pharmaceuticals to low income individuals, was shut down on December 31, 2006.  Many prescriptions were transitioned to Medicare Part D and other funding sources, which compensate Lilly at a dramatically higher level for prescriptions.  Hence, Lilly is realizing a significant net price benefit in 2007 (vs. 2006) for a number of products (in particular Forteo).  But volume growth has been somewhat impacted since some individuals have not filled prescriptions following the ending of Lilly Answers.”

Then Risinger asks, “Why did Eli Lilly drop Lilly Answers? The program was ended due to new Medicare Part D rules.  But Lilly did replace it with another program in January 2007 called ‘Medicare Answers,’ which covers three products -- Forteo, Zyprexa, and Humatrope.  Note that Medicare Answers is a smaller operation supporting a fraction of the Lilly Answers volume.”

Only three products? That won’t cheer up any of Lilly’s patients who are on Prozac, now will it?

The move is a controversial one because in the debate over whether drug companies deliberately keep drug prices high—thus raising the cost of healthcare—thus causing 40 million Americans to not have health coverage—etc., etc.,—drug companies and PhRMA have traditionally pointed to their Patient Assistance Programs as proof that they’re not cold-hearted money-grubbers.

Now it’s only a matter of time before other Big Pharma CFOs see Lilly’s improved numbers and ask, Hey, what if we kicked the poor off the boat, too?

In a Rare Move, Pfizer Admits Exubera Was a Mistake

The company had this to say today in its earnings press release:

“We remain convinced that Exubera offers substantial benefit for diabetic patients worldwide, we are disappointed with the product’s performance to date.”

That’s as close as Pfizer ever gets to saying “we screwed up.”

Merrill Lynch analyst David Risinger, in yet another of his classic understatements, said, “Management is commenting more cautiously about Exubera in its press release. … Pfizer still plans to do DTC (direct to consumer) advertising for Exubera starting in mid-summer, which we believe will backfire.  We think that since the medical community appears to have limited interest in Exubera, a DTC push could face serious headwind.”

Read this for the history of how Pfizer basically managed to turn $1.4 billion into bong smoke.

Get Me Rewrite! Readers Rate This Blog 'Useful' and 'Credible' But Not 'Readable'

John Mack has released some more of his highly unscientific reader poll of pharma blogs. Turns out that when the data is restricted to people who actually work in the industry, BrandweekNRX is in the top 5 for credibility and usefulness but not for readability.

Given that my profession is writing, this, uh, hurts. I will console myself with the fact that in a previous chunk of Mack's survey, you guys rated BrandweekNRX as right on the line when it comes to bias.

Blog addicts might want to note that Peter Rost has deliberately picked a fight with Mack over the results. Why? Probably because he knows Mack will respond, and that tends to drive traffic. I discovered this myself when I zinged Mack a while back during the Gardasil debate.

Alleged AZ Document: Arimidex Brand Manager Sent Reps 'Background' on Letrozole

The Group of 7 anonymous whistleblowers at AstraZeneca have sent me what they allege is a memo from AZ's Matt Lehman, the brand director for Arimidex (see download below). The memo is all about letrozole and its failings--a rival drug to Arimidex that reps were not supposed to be comparing Arimidex to, according to AZ's code of conduct.

The memo begins: "This reprint is being provided to you for YOUR BACKGROUND INFORMATION ONLY and is not for proactive distribution or discussion outside of AstraZeneca."

Then its says: "Our friends at Novartis have just poured gasoline on that fire that we all stoked…..IMAGINE THAT!"

Then it goes into a detailed analysis of a clinical review of letrozole (the generic name of Novartis's Femara) and its various adverse event failings.

First, let me point out that I do not know if this memo is genuine. It's from an anonymous source. It could be made up. As with everything about the Bucket of Money scandal, readers should treat it with extreme caution.

Having said that: The memo is clearly labelled as not for use in promotion. But at the same time, its general tone is one that encourages reps to think of Arimidex as superior to Femara. And given the background here—the newsletter from Mike Zubillaga talking about selling against letrozole earlier in 2006—it doesn't look good.

The incident is being investigated by both the OIG and AZ. May I suggest to both investigative teams that one of their first jobs will be to determine whether this memo is genuine, and if so, what reps would have understood from it when they received it.

Download 51_mo_publication_memo_to_field_sales_jan_9.doc

AZ 'Bucket of Money' Scandal Starting to Enter the Pharma Vernacular

AZ sales rep manager Mike Zubillaga never actually referred to cancer doctors’ offices as “buckets of cash,” he used the phrase “bucket of money” (new readers start here and work your way back through the links for the full story). But it seems that the former term is on the verge of becoming one of those cultural touchstones that lives on, like “Play it again, Sam,” or “Lead on, Macbeth” (both of which, like “buckets of cash,” are misquotes of the original).

Yesterday, CNBC mistakenly said the quote was "buckets of cash," and now the phrase is taking on a life of its own.

Today Andrew Forman of analysts WR Hambrecht released a note to investors which states, “We believe strong Q1 results [across the Big Pharma sector] are confirming the bullish sentiment by the now former Ex-AstraZeneca sales manager that ‘buckets of cash’ are back.” (See download below.)

I like Forman’s notes because they’re occasionally written in plain English, a language not often spoken on the street. Check out this hilarious description of management at Nektar, the maker of Pfizer’s Exubera flop:

“We feel no new CEO could inherit a decade of 'Nektarine' culture with the spending discipline of college freshmen on trust funds and figure out how to right the ship in six weeks.”

Forman’s solution? “Getting a few hundred Nektarines to start surfing Craigslist for another job.”

Download PHARMIU042007-1.pdf

Medical Device Makers Pull Back on Adspend; DTC Sinks to Pre-2003 Levels

I went on CNBC last week to talk about consumer advertising for medical device companies like Zimmer’s Gender Knee and Stryker’s knee replacement joint. Both have done TV spots; Zimmer has a campaign running right now and Stryker used to use golfer Arnold Palmer in its ads.

At one point in the interview I was asked if we’ll see more “body parts” being advertised on TV. I replied yes, because the population is getting older and more likely to need them, and because DTC generally drives requests at doctors’ offices and thus the category as a whole.

Since then, I’m kind of having second thoughts. I pulled these numbers from TNS Media Intelligence on total device advertising in the U.S.:

2002 = $384 million
2003 = $444 million
2004 = $483 million
2005 = $510 million
2006 = $443 million

As you can see, they show that adspend dropped last year to a level not seen since ’02 or ’03. The stats are in stark contrast to spending by Big Pharma, which topped $4.7 billion last year and has never seen a declining year.

So, is the bloom off the rose for consumer marketers in the device industry?

Some highlights:

• J&J accounts for about 25% of the entire category. Its total device spend was $105 million last year, down from $150 million in ’05.
• Procter & Gamble’s various devices at $34 million last year is exactly half what it was in ‘02.
• Roche’s spending on its Accuchek brands collapsed from nearly $16 million to just $5 million.
• Transitions Lenses is down from historic highs of $28 million to $25 million.
• Church & Dwight down from $22 million to $18 million.
• Novartis's various eyecare brands down from $30 million to $19 million.
• Bayer down from $24 million to $22 million.
• Bausch & Lomb down from $24 million to $21 million.
• Invisalign down from $22 million to $15 million.
• Abbott Labs down from $20 million to $18 million.

One thing to notice: the trend with major spenders is the same across devices: They all peaked last year or the year before and are spending at lower ranges. This makes me think that the great device gold rush might be over. Where is the money going? Probably onto the web, or perhaps many of these brands have discovered that the ROI just isn’t there, particularly for brands involved in long-term decision making cycles or where doctors more strictly control the barriers for entry than GP pill pushers do.

It’s not all gloom, though. Still spending freely:

• Stryker’s spending is still at record levels in the $5.1 million range.
• Philips’ Lifeline Medical Alert did a $5 million campaign last year.
• New entry: Chattem’s Icy Hot spent $18 million last year.

The bottom line: J&J et al drive this category. J&J previously decided to cut its DTC spend dramatically. It looks like other major companies hve done the same thing on a less dramatic scale. Until those companies see a change in the performance of above-the-line activity,  don't expect to see a return to  the $500 million level any time soon.

Bucket of Money Scandal: Reps Complaining as Early as March 4; Abraxis Linked?

Check out this discussion thread posted on the AZ section of Cafe Pharma back in early March -- way before the Bucket of Money scandal got rolling (New readers: see numerous posts below).

Clearly, none of this is proof of anything. Café Pharma is an unreliable source that should be taken with a fistful of salt.

Nonetheless, just for fun:

It starts when one AZ rep (presumably) asks:

“Why is MZ so hell bent on using RSMs to sell against Femara? … The whole thing sounds sleazy to me.”

Could MZ be Mike Zubillaga? Who knows. As usual with anonymous info, it’s unreliable.

The dueling posters then engage in a battle over whether “MZ is the best Regional @ AZ” or, conversely, whether “he is just another RSD licking the shit off of the boots of Scarlett to get to the next level in his career.”

Who is “Scarlett?” You might suggest it’s the wonderfully named Scarlett Spring, AZ’s national sales director/oncology. I couldn’t possibly comment. (A message left for Spring last week was not returned – Ms. Spring, feel free to call me at 646 654 5406 or jedwards@brandweek.com if you have anything you want to add.)

After several posts regarding the usual Café Pharma intellectual debate about whose body parts are in whose mouths, the posters begin debating whether they should follow AZ’s “policy” or MZ’s directions.

Then it gets really interesting. One post:

“Just got back from an Abraxane meeting in Pittsburgh with our Abraxis counterparts. The Abraxis manager told all of us not to use email when dealing with Regional Scientific Managers but to stick to cells phones. AZ's Mid-Atlantic Abraxane DSM 'RD' was present & said nothing. This leads me to believe that what they are asking us to do is illegal. Is anyone else seeing this in other parts of the country?”

The reply:

“Lemme guess..help the RSM recruit for ad boards and sell Abraxane off-label. Keep it quiet. No email or voicemail. Cell phones only.”

Some context from a third poster:

“My CPA, Doctor, and Stockbroker only work over the phone or live too. Cheer up.”

And then the retort:

“Avoiding email is a way to hide evidence. I remember getting off the bus at a national oncology meeting years ago and being asked for my laptop so they could record the hard drive. This was during the Zoladex investigation. They pieced together every suspicious transaction. That included business plans, email, work day appraisals, evaluations and call notes. When reps were questioned they had everything laid out in chronological order. We were also told that at any time a federal investigator could knock on our with a subpeona. Comforting thoughts.”

Clearly, once the movie rights are negotiated the script-writing will be the easy bit.

At AZ, a Potential Smoking Gun Emerges in the Bucket of Money Scandal

Peter Rost this morning posted what appears to be an inexplicable set of PowerPoint slides from the AZ Group of 7 whistleblowers. The entire slideshow (see download below) is a comparison of AZ's Arimidex anti-cancer drug vs. Novartis' Femara drug. I hope I don't have to remind you at this stage that it is against AZ's internal policy (which in turn is controlled by its corporate integrity agreement with the government over the Zoldex scandal), to market Arimidex in comparison to Femara. Especially as the two drugs have never, according to Rost and his sources, gone head-to-head in proper study.

The icing on the cake? AZ reps' performance review forms included a section where supervisors are asked to rate reps on: "Product Initiatives- Arimidex (1) Grow at expense of Femara (2)." See second download below.

In the journalism world, we call these "Smoking Guns."

Ed from Pharmalot points out that the mainstream media has had its lunch eaten by Rost et al on this story. Given that it involves breast cancer, breaking the law, and greed ... it's a matter of time before the big boys wade in.

One last thought: Take a look at AZ's full press statement from Friday (see third download). It's a lengthy explanation of AZ's official position, the fact that it is responding by investigating the allegations, and an explanation of how it frowns upon this type of wrongdoing. This is what good crisis PR looks like. They're not ducking it, spinning it or pretending it doesn't exist. Yes, it is going to suck at AZ for a while, but if the company can be seen to be doing the right thing and not trying to persuade us all that this is somehow 'not a story,' then it will be over faster and with less lasting damage.

The proof now will be in the pudding: Will AZ tell the public the results of their probe? Or will we have to get that from the OIG and the Group of 7 six months from now? I would recommend AZ be first out of the gate on that one.

<>

Download ATACvsBIG1-98-1.ppt

Download 2007bscpsstemplate1.doc

Download oncology_newsletter_az_highest_ethics_statement_4.13.07 final v2.doc

Despite Indictments and Guilty Pleas, the HGH Industry Rolls On

Great story in the NYT Sunday Biz section on the "anti-aging" industry and its mouthpiece, the American Academy of Anti-Aging Medicine. It seems that despite Pfizer recently paying a $35 million fine for the off-label marketing of human growth hormone for anti-aging purposes, and despite 20 (that's twenty) indictments brought against doctors and others who supply HGH for anti-aging purposes, the business is still going strong.

Just one thing I'd like to add, which I felt was not given enough prominence in the article: I don't doubt for a second that taking HGH must feel fantastic for anyone in middle or old age. I mean, all those teenage chemicals suddenly racing through your veins again has got to be pretty good. But the key thing that never gets talked about is whether HGH causes cancer in grown adults. There is some evidence that it does so in rats. And, of course, this is a chemical that makes cells grow.

There needs to be more research into HGH's affect on cancer and pre-cancerous cells. Until then, you'd be nuts to give, get or market these injections.