Lilly spends money, Pfizer struggles, and a KOL gets KO’d

October 9, 2008 – 3:29 pm

There’s a lot of news this week being discussed. Lilly turned out to be the secret suitor of ImClone and is buying the company for $6.5 billion, as well settling with 33 states for $62 million over claims of improperly marketing Zyprexa; Pfizer’s doing a reorganization of its research units and has been accused of manipulating studies of Neurontin; and then there’s the resignation of Dr. Charles Nemeroff as chair of the psychiatry department of Emory University as a Senate committee unearthed information that the doctor failed to report all of his pharma consulting gains to the university. And there’s also the tidbits of news and discussion, so dig in.

Lilly gains some, loses some

Eli Lilly and Co. stepped forward to reveal itself as the other party interested in buying ImClone, trumping Bristol-Myers Squibb’s $62-a-share bid. Ed Silverman at Pharmalot writes about the deal here.

As far as Bristol-Myers Squibb’s position about the sale, Jim Edwards at Bnet summarizes it thusly: “Thanks for the cash, suckers!” Bristol-Myers Squibb’s stake in ImClone will bring it about $1 billion from the sale. I like Mr. Edwards’ translations of statements from Bristol-Myers Squibb CEO Jim Cornelius.

For example, Mr. Cornelius said in the press release, “We are pleased to have initiated a process that has resulted in the substantial increase of ImClone’s value for all of its stockholders.”

Mr. Edwards’ translation: “After getting this thing rolling at $62 a share, we are pleased to have forced Lilly — a more desperate company in terms of its patent cliff — into over-paying for ImClone. And when we say ‘increase of ImClone’s value for all its stockholders,’ we’re referring specifically to the sled full of cash that Lilly CEO John Lechleiter must now give us. Mush, mush!”

Mr. Edwards and Scott Hensley at the Wall Street Journal Health Blog point out that Bristol-Myers Squibb will still jointly market Erbitux in the United States, with the marketing partner now being Lilly.

As Jacob Goldstein at the Wall Street Journal Health Blog points out about the sale, “Never mind the credit crunch. Pharma companies are sitting on cash, and they’re desperate to get into the biotech business.”

Mr. Silverman picked up the New York Times story about Lilly’s settlement with 33 states over improper marketing of Zyprexa, for $62 million.

Jacob Goldstein at the Wall Street Journal Health Blog also has the news, and points out that Lilly won’t be out of pocket on the settlement for long. “Lilly sells $62 million worth of Zyprexa every five days or so, according to a recent SEC filing,” Mr. Goldstein writes. He also says with other government investigations still continuing, Lilly may have to pay out even more money.

Philip Dawdy at Furious Seasons does some followup of the settlement here, saying, “I spoke yesterday with representatives from the Illinois and Oregon AG’s offices, trying to clarify a few matters about yesterday’s $62 million settlement with Lilly over off-label marketing of Zyprexa.” The upshot? The states are also monitoring similar issues with other drugs. A representative of the Oregon Attorney General’s office told Mr. Dawdy, “”There are many more [claims] to come down the road. We’re monitoring all of the companies. If they were operating the way Lilly was, we’ll probably be talking to them.”

Pfizer reshapes, and is hit by new accusations

Pfizer is reorganizing its units but does not plan to cut more jobs, says Ed Silverman at Pharmalot and Jacob Goldstein at the Wall Street Journal Health Blog. There is now a new unit for primary care, a new unit for emerging markets, and a new unit for specialty care.

In referring to the earlier layoffs of R&D people by Pfizer, GlaxSmithKline, and others, Rich Meyer at World of DTC Marketing wonders, “This is the new business model for pharma?” “I can understand Pfizer’s decision not to pursue any other CV drugs once Lipitor comes off patent as it is going to be hard to get payers to add a new CV drug that is better than generic Lipitor,” he says. “However, laying off R&D people like GSK, Pfizer and others are planning to do is an acknowledgement that the organization doesn’t have the financial resources to develop new products and that it would be bettefr to just ‘buy’ companies that develop new compounds.”

Meanwhile, experts for plaintiffs in a lawsuit against Pfizer say the company manipulated the publication of studies of Neurontin, reports Mr. Silverman, picking up the New York Times story. If you want to read the experts reports, Mr. Silverman says, “Eeny, meeny, miney, mo, catch an expert by the toe. You know the rest …” Click on each word to read a separate report.

As Jacob Goldstein at the Wall Street Journal Health Blog writes, “If you’re a marketing manager for a prescription drug, you might think twice before sending an email that says this: ‘We are not interested at all in having this paper published because it is negative!!’ That’s what the senior marketing manager for Pfizer’s epilepsy drug Neurontin wrote in a 2002 email.” Mr. Goldstein links to the Wall Street Journal’s version of the story here.

Playing with numbers

Gardiner Harris of the New York Times and David Armstrong of the Wall Street Journal both came out with the story last Friday. Apparently Dr. Nemeroff reported to his employer $1.2 million of the $2.8 million in speaking fees he earned from drug companies between 2000 and 2007.

The usual pharma critics went into overdrive when the news came out. The blogger at Clinical Psychology and Psychiatry: A Closer Look said, “Uh-oh, Chuck, they out to get you, man.”

“One of my first posts on Nemeroff was presciently titled: Uh-oh Chuck, They Out to Get Us, Man,” this blogger says. “Apparently, I was foreshadowing the present investigation. Don’t feel too bad for Nemeroff; he should be able to afford excellent legal representation.”

The ClinPsych blogger also details a month in the life of Chuck “High Life” Nemeroff. “Imagine making $20k in a month for basically reading slides a few times that were quite possibly entirely written by a drug company,” this blogger says. “And many of these talks were accompanied by posh meals, the kind that myself and most of my readers might eat once or twice a year.”

Dr. Daniel Carlat at the Carlat Psychiatry Blog says, “As more information surfaces about Dr. Charles Nemeroff, the picture becomes more complicated and more sordid.

In an earlier post, he notes that, “For Charles Nemeroff, it was never a question of whether it would all come crashing down, but when it would happen. … In a prior post on this blog, I had referred to Dr. Nemeroff as ‘Charles Bling Bling Nemeroff,’ and later apologized for having gratuitously insulted him. I formally rescind that apology.”

Ed Silverman, in detailing what Dr. Nemeroff did and did not do in reporting his fees from GlaxoSmithKline, scores the best headline: What rules? Emory fiddled while Nemeroff earned. And in looking at Dr. Nemeroff’s speaking schedule, especially for GlaxoSmithKline, Mr. Silverman wonders, “It raises a question - when he did find time to do anything else?”

At Hooked: Ethics, Medicine, and Pharma, Dr. Howard Brody examines the role Emory University played in helping to shield Dr. Nemeroff. In this post, Dr. Brody says, “The basic issue is this. In today’s world, a medical school like Emory looks at all the pluses and minuses of having a guy like Nemeroff as a powerful chair, and decides that the pluses outweigh the minuses. His publication record is stellar (mostly ghostwritten of course), he brings in huge research grants, and people in his specialty all over the world want to kiss the hem of his garments. What has to change, in the regulation and the culture of the academic medical center, so that it becomes a no-brainer that having a guy like this on your faculty is a net loser?”

In this post, Dr. Brody looks at the past history of the relationship between Emory’s medical school and Dr. Nemeroff. “So now we come to the $64 question (or in Nemeroff’s case, the $2.8M question), which is what has to happen to the medical school culture to not allow people like Nemeroff to have it all their own way,” Dr. Brody says. “The incredibly optimistic answer is that universities and academic medical centers have to grow two pieces of anatomy, of which the one I can say in polite society is a backbone.’They need to be willing to stand up to the blackmail and intimidation that a ‘Boss of Bosses’ can throw their way – ideally cutting him off early in his career so that he never accumulates the incredible power that Nemeroff now seems to enjoy.”

Around and about …

Shirley S. Wang at the Wall Street Journal Health Blog reports that Sheri McCoy will be the new head of Johnson & Johnson’s pharmaceutical unit. “What an executive with a diverse background at J&J — but no particular expertise in pharmaceuticals — will bring to the task is an obvious question,” Ms. Wang writes. “The Health Blog asked for an interview with McCoy but hasn’t heard back on that request yet.”

Merrill Goozner at GoozNews looks at the news that the U.K.’s National Health Service will pay for Roche’s Tarceva after the company dropped the price to the same level as another existing therapeutic option. Meanwhile, drugs in the class such as Tarceva are showing little therapeutic benefit. “The rising price of drugs with limited benefits isn’t the sole reason why health care costs are skyrocketing out of control. But drug prices are a significant contributor,” Mr. Goozner says. “Until the U.S. creates new institutions and institutional arrangements to fairly evaluate and price drugs, cancer patients — like Barack Obama’s late mother, whose financial struggles as she fought cancer gets mentioned in his latest health care commercial — will continue to worry about paying the extraordinarily high co-pays on cancer drugs even as they spend the final months of their lives battling the dread disease.”

Bob Ehrlich at DTC-in-Perspective says, “It looks increasingly likely we will have a Democratic victory in November.” He believes that once the scrutiny of the financial industry wanes, the drug industry will be a prime target. “I do not anticipate any bans on advertising,” he says. “I do expect much more vigorous enforcement from the FDA on drug company marketing practices.”

At Eye on FDA, Mark Senak reviews warning letters for the third quarter of 2008. “… what is extraordinary about 2008 is that, despite the fact that there have only been 13 letters issued by DDMAC this year, a whopping six, count ‘em SIX letters were issued in one week and FIVE of them were in a single day,” he says. “What’s that about?” We’ll find out his thoughts when he does part two of the review.

Additionally, Mr. Senak details some Google tools that pharma companies who want to venture more into social media can use.

Jacob Goldstein at the Wall Street Journal Health Blog picks up the Pediatrics study that challenges the value of free drug samples for kids.

And speaking of social media, Marc Monseau of JNJBTW looks at healthcare companies and the social Web. In responding to a criticism from John Mack at the Pharma Marketing Blog, Mr. Monseau responds, “Clearly there need to be some measures put into place to mitigate the risk of legal or regulatory liability. However, the more hurdles that are put into place, the less credible, useful or open those online efforts become, and in the end you may be left with something that could be criticized as being more akin to a traditional, one-way communications effort. And so what we have ended up doing in many cases is take some small steps to get more comfortable with getting involved. We are also making sure we have processes in place to handle adverse event reports and that we have responsible people involved who can respond quickly to questions. At the same time, projects like JNJBTW and the Johnson & Johnson health channel on YouTube are giving us some great experience.”

Dr. Derek Lowe of In the Pipeline looks at the 2008 Nobel Prize winners for chemistry. Meanwhile, his post about how drug R&D is changing and what it means for big pharma continues to get a lot of attention. “My take is still that this is a shift — as far as the US end is concerned — from larger research outfits to smaller ones,” he says. “After all, the drugs are going to have to come from somewhere, and the deal-making for small companies that have something promising has been intense. It just seems that the larger companies don’t think that they can do as much of this discovery work themselves — not, at least, at the prices that make sense.”

Rich Meyers at World of DTC marketing looks at what goes into a great health Website. “Creating a great health Website requires two things: great insights and research and the budget to do it right the first time,” he says. “A lot of people don’t seem to understand the process and think that anyone should be able to type some keys and presto a great Website appears. If there is one area that needs more funding instead of less it is in Website development and if you skimp on development you could wind up launching a Website that doesn’t meet business or customer objectives.”

Mr. Silverman posted that Bayer got chided by FDA for two TV spots for the birth control pill Yaz.

On the same topic, John Mack at the Pharma Marketing Blog wonders if FDA is helping marketers work around regulations. “My question is this: If the FDA is going to preview broadcast DTC ads AND get paid to do it, why didn’t the agency stop the YAZ ad from being produced or aired after seeing this storyboard?” he asks. “Is FDA THAT slow in issuing warning letters? Or is it in cahoots with drug companies to help them avoid complying with regulations? Who needs a regulatory agency that regulates AFTER the fact and not before? This can only get WORSE when drug companies routinely pay for FDA to preview their ads.”

Incidentally, I really dislike that shrieky yet bland remake of Twisted Sister’s “We’re Not Gonna Take It” used on one of the commericials. The same band, the Veronicas, also did the cover of “Goodbye to You that is used in the Yaz commercial Mr. Silverman posted (and which pales vocally in comparison to Patty Smyth’s version). Also, as a child of the ’80s, all I can think about when I hear the name Yaz is this (and since this is the month of Halloween, the video is doubly appropriate). Yes, I know the band is officially known as Yazoo in the U.K. and Europe, but they were marketed as Yaz in the United States, and to me they will always be Yaz. Way to tromp on my teenage memories, Bayer!!!

Going on the naming-drugs-after-80’s-bands theme, my husband suggests that there could be an erectile dysfunction drug in the United Kingdom called “English Beat”; a potassium deficiency drug called “Bananarama”; for restless legs syndrome, “INXS”; for BPH, “Soft Cell”; for acid reflux, “The Vapors”; and for depression, “Joy Division.” OK, maybe not the last for depression, since singer Ian Curtis killed himself. But you see what I mean here … feel free to suggest others!