Pharmalot

In the latest flap over Johnson & Johnson product recalls, the Chinese government has taken the health care giant to task for its quality control procedures and, more specifically, allegedly failing to withdraw some products that have been pulled from other markets, according to reports.

Last week, the China Food and Drug Administration met with J&J officials and issued a statement urging improvements in quality control. The agency also vowed to strengthen oversight to ensure timely recalls and pledged to crack down on companies that conduct late or secretive recalls, Global Times writes.

What prompted the meeting? The missive came shortly after a newsletter in Beijing called Health Times reported that J&J conducted at least 51 global product recalls since April 2005, but 48 of those products were not recalled from the mainland Chinese market. In other words, a double standard exists.

The report noted that, last April, J&J recalled nearly 1.7 million bottles of Children’s Tylenol made and sold in South Korea due to a high level of acetaminophen, which may cause liver damage (back story). The J&J unit in Shanghai insisted the bottles were not sold in the mainland.  But Health Times disputed the contention.

The newsletter also pointed to a decision last December by a J&J domestic unit to halt sales of the Velcade injection after an order from the CFDA, but Health Times contended the product had already been recalled in the US, UK and Japan a year earlier.

The meeting marked the first time the CFDA held talks with a multinational company over quality problems, indicating that China's watchdog is increasing its attention to drug safety, Liu Baocheng, director of the Center for International Business Ethics at the University of International Business and Economics, told the Global Times.

As for J&J, the healthcare giant issued a statement to Asian media saying its mainland Chinese subsidiaries have reported all product recalls conducted in the mainland in accordance with CFDA rules. And a spokesman in the US sent us this: “Johnson & Johnson has a strong commitment to delivering quality products to Chinese consumers as well as our customers all over the world.

“We have one global quality policy that applies worldwide to all of our companies, and when any of our companies initiates a product recall for quality reasons, we work with health authorities to determine the appropriate course of action in the best interest of patients and consumers.”

[UPDATE: And he adds that “there may be instances when quality actions initiated in other parts of the world do not affect a specific country because the products in question are not sold there or the facilities where quality matters have arisen do not manufacture products for that country. When any of our companies initiates a product recall for quality reasons, we work with health authorities to determine the appropriate course of action in the best interest of patients and consumers.”]

Nonetheless, J&J may be suffering from some of the consumer confidence issues seen not long ago in the US. A survey by Eastmoney.com last week found that 91.4 percent of 4,652 respondents would no longer buy any J&J products, Global Times writes. Why? Well, 34 cited continuous quality problems in recent years, while 50 percent pointed to a different attitude toward the mainland market for recalls.

As we have noted previously, over the past three years, J&J (JNJ) has experienced an outsized list of manufacturing problems that have led to recalls of Tylenol, Motrin, Rolaids, Sudafed and Benadryl; K-Y Jelly; Acuvue contact...

In a setback to an important joint venture between Bristol-Myers Squibb (BMY) and AstraZeneca (AZN), the top-line results of a large, late-stage study of their Onglyza diabetes drug failed to show superiority in reducing cardiovascular deaths, heart attacks and strokes compared to a placebo in Type 2 diabetes patients with cardiovascular risk factors (read this).

At the same time, the findings of the so-called SAVOR study, which examined more than 16,000 patients, also indicated that Onglyza did not cause cardiovascular harm, which is a key FDA litmus test for diabetes pills since heart risks are a common concern for diabetics. But the outcome suggests that wider use of the drug and other DPP-4 medicines, such as Januvia, which is sold by Merck (MRK), is unlikely to occur.

“Ruling out CV harm is good, of course, but it had been hoped… that positive SAVOR results would supercharge the DPP-4 inhibitor class to which Onglyza belongs,” writes Sanford Bernstein analyst Tim Anderson in an investor note. “Therefore, SAVOR will be viewed as more of a missed opportunity to boost Onglyza and the overall class.”

Onglyza, which generated $709 million in sales last year, is a crucial component in the joint venture, but sales have recently stalled, reflecting questions over the safety of these drugs and a few other diabetes medicines thanks to a pair of studies raising concerns over the potential for causal links to pancreatitis and pancreatic cancer (see this and this). And a watchdog group found a high rate of adverse events for these illnesses (read more here).

In response to the ruckus, the NIH last week held a two-day workshop to review the issue and while the outcome was inconclusive, the FDA hinted that additional studies may be sought. Meanwhile, the American Diabetes Association is now asking drugmakers to provide patient-level data for an independent review (lots more here).

The effect of these developments and the ensuing publicity is causing uncertainty about the extent to which physicians and patients will embrace the medicines, along with the related class of GLP-1 inhibitors, which includes Novo Nordisk’s Victoza.  As ISI Group analyst Mark Schoenebaum points out, doctors are expected to “read across” the SAVOR results to other DPP-4 inhibitors, although he believes the results were not unexpected and so should not change prescribing habits.

Just the same, the brief statement issued by Bristol-Myers Squibb and AstraZeneca did not include any safety information, which will not be known until full results are reported at the annual meeting of the European Society of Cardiology later this year. Consequently, Onglyza is likely to remain in a holding pattern, at best, for the time being. Meanwhile, Anderson is holding his Onglyza forecasts steady at about $900 million this year, while he sees Januvia reaching about $6.1 billion.

STORY ENDS HERE

thumbs down pic thx to italianvoice on flickr

In the latest move by regulators to clamp down on so-called pay-to-delay deals, the European Commission has fined Lundbeck and four other drugmakers for reaching agreements to block entry of generic versions of the best-selling Celexa antidepressant. Lundbeck was fined $125.6 million, while the others - including Ranbaxy Laboratories - paid a total of nearly $70 million.

After the basic patent that Lundbeck held on the molecule had expired, the drugmaker only retained a number of related process patents that provided limited protection. And so, Lundbeck struck deals in 2002 with generic rivals to refrain from selling copycat versions in return for "substantial payments and other inducements amounting to tens of million of euros," according to the EC.

The regulator cited internal documents that refer to a "club" being formed and "a pile of $$$" to be shared, and charged that Lundbeck paid "significant lump sums," purchased stock from the generic drugmakers for the "sole purpose of destroying it," and offered guaranteed profits in a distribution agreement.

"It is unacceptable that a company pays off its competitors to stay out of its market and delay the entry of cheaper medicines," says EC vp Joaquin Almunia in a statement. "Agreements of this type directly harm patients and national health systems, which are already under tight budgetary constraints. The commission will not tolerate such anti-competitive practices."

The move comes amid increased scrutiny of these deals on both sides of the Atlantic and also marks the first time that the EC, which has been investigating such settlements for several years, has levied a fine. Over the past year, the regulator has twice issued what it calls a 'statement of objection' to other drugmakers (see here and here).

And earlier this week, the US Supreme Court ruled that drugmakers can face lawsuits over these deals, although they should not necessarily be assumed to be illegal. The decision largely vindicated the argument by the US Federal Trade Commission that such settlements are anti-competitive and cost US consumers some $3.5 billion annually (more here).

However, the court noted that there may be justifications for payments. "Where a reverse payment reflects traditional settlement considerations, such as avoided litigation costs or fair value for services," the court wrote, "there is not the same concern that a patentee is using its monopoly profits to avoid the risk of patent invalidation or a finding of noninfringement."

In a strongly worded statement, Lundbeck took exception to the EC conclusion and seemed to be making this argument. The drugmaker insisted it "acted transparently and in good faith trying to protect its patents," and vowed to appeal the fine. Lundbeck "strongly disagrees with the commission's decision... Any setttlement agreements involving a transfer of value from an originator to a generic company is a restriction of competition and the value transfer reflects an understanding that the patent is invalid or weak. The approach is erroneous... Patent settlement agreements are efficiency enhancing and...