Friday, April 30, 2010

Ex-Schering-Plough Defense Counsel To Be Lead US Attorney Handling Health Care Fraud In NJ

While this newly-minted head of the revamped health care fraud prosecution unit in the New Jersey US Attorneys' office will have to be walled off from any investigations involving legacy Schering-Plough, and thus New Merck (due to conflicts rules), it should give New Jersey pharma company CEOs [and their GCs] more than a little pause, when it settles in that -- by dint of her corporate defense "insider" stint, as retained lead counsel to Schering-Plough, she now well-understands where the corporate cracks and crevices are -- yep, "hiding" right there, in plain view. And to this recently-acquired knowledge, she'll add her considerable prior experience as a US Attorney, from her last go-'round -- prosecuting criminal fraud cases of all sorts. Smart hire, here -- by DoJ.

The site "Main Justice" has a great article on it all, do go read -- but here is a short snippet:

. . . .The Justice Department has signaled it intends to aggressively pursue health care fraud, requesting a $60 million increase in its budget for fiscal 2011 to combat it. . . .

[Ms. Maureen] Ruane will join the U.S. Attorney’s office on May 24, her second tour of duty with the office. In 1998, she joined the U.S. Attorney’s office working on appeals, then moved to the criminal division where she investigated and tried cases in bank fraud, consumer fraud, interstate theft and money laundering.

After she jumped to private practice at Lowenstein Sandler PC in 2004, Ruane represented pharmaceutical and health care companies on civil matters and in investigations. She served as co-lead counsel to Schering Plough in defending against shareholder lawsuits challenging its merger with Merck. She also represented Bristol Myers Squibb in environmental lawsuits. . . .

"It is absolutely a new and exciting opportunity, when so much of the nation is focused on health care,” Ruane said. “New Jersey is home to so many pharmaceutical companies, it’s a key state where we should look very carefully at what is happening. . . ."

Indeed. There is every reason to expect that this now two-time DoJ veteran will vigorously, and fairly, enforce the federal health care fraud laws, in what Ed Silverman calls the "nation's medicine cabinet".

Thursday, April 29, 2010

Does Sanofi's Slight Q1 Animal Health Downturn Pre-Sage Merck's Intervet Biz's Q1 2010?

Recall that in July 2009 Merck announced it would tansfer its half-share of the Merial businesses back to Sanofi, in order to close the bust-up. Recall also that on March 9, 2010, Merck and Sanofi announced that the legacy Schering-Plough Intervet businesses would now to be contributed to Merial, in mid-2011, assuming all appropriate antitrust clearances.

Okay -- and here it gets fuzzy, but I suspect that in the meantime, Merck will begin reporting legacy Schering-Plough Intervet Animal Health as an unconsolidated operation. Merck may report half of it effectively held for sale, to Sanofi's Merial -- and thus only include the other half of its results in Merck's operating results, proper. Got all that? [Me either, truth be told.] In short, we'll see. My GAAP is probably rusty, here.

We'll have certainty on next Tuesday morning, pre-NYSE open, when New Merck reports its first quarter 2010 results -- and the legacy Schering-Plough Intervet businesses with it -- but here is what Sanofi-Aventis just reported this morning, on these Merial businesses:

. . . .Merial, which has been a wholly-owned subsidiary of sanofi-aventis since September 18, 2009, recorded first-quarter net sales of $724 million, up 0.5% (+5.8% on a reported basis). Net sales of the companion animal franchise were slightly down (-1.1%), reflecting a late parasiticide season and new entrants. The production animals segment reported a good performance with a 4.9% sales increase (to $214 million), driven by Avian sales (+10.4%) and Veterinary Public Health sales (+34.0%), boosted by favorable sales of blue-tongue virus vaccines. These performances were slightly offset by lower sales (-2.7%) for the Ruminant franchise, impacted by depressed milk prices in Europe. . . .

Could presage some pressure on New Merck results, in the companion animals, and production animal ruminant segments. We'll see.

Maley Fosamax® Bellweather Case: The Plaintiff's Case In Chief Is In, Tonight

UPDATED 04.29.10 @ 4 PM EDT: It is either (i) or (ii), below -- the trial continues today: Filed & Entered: 04/29/2010 Jury Trial - Held. . . .

So if the trial continued today, Judge Keenan has very-likely deferred decision on Merck's Rule 50(a) motion.

[End of Update]

How do I know that, in the absence of press reports? Well, because Merck's counsel just filed a Rule 50(a) motion to decide the case without having to put on a defense. Such a motion, if made at all, is properly made at the close of the plaintiff's case in chief. That point must have come today. From here, three things can happen: Judge Keenan may (i) decide to delay a decision on Merck's motion, and listen to some or all of Merck's defense case (and decide the motion later); (ii) promptly deny Merck's motion, and let the case continue; or (iii) grant Merck's motion, and effectively end the trial in a loss for Louise Maley, tonight.

I'd put the order of probabilty of occurence in the same order as I laid out the options: (i), (ii) and finally (iii). Here is some text from the memo of law supporting the motion:
Filed: April 28, 2010. . . .

. . . .Defendant Merck Sharp & Dohme Corp. (“Merck”) files this memorandum in support of its Motion for Judgment as a Matter of Law pursuant to Federal Rule of Civil Procedure 50(a). . . .

Will Judge Keenan allow the case to reach the jury? Time will tell, but I strongly suspect he will (more background on it). Stay-tuned.

Wednesday, April 28, 2010

Frazier Annointed(!) Appointed -- Likely Next Chairman and CEO At Merck, Come 2011

I think I mentioned this probability once in passing a few months before February (just can't find it in all the clutter, here), but we certainly discussed it, as did Peter Loftus, back in February 2010.

Today's announcement, after market close, that Kenneth Frazier has been named the overall President of New Merck (not just the global Human Health Care businesses president) is the clearest handwriting on the wall, yet -- that he will be tapped to take Dick Clark's place, when Clark reaches mandatory retirement age, mid 2011. From the presser:

. . . .As company president, Mr. Frazier will lead Merck's three largest worldwide divisions responsible for pharmaceutical and vaccine sales and marketing, research and development, and manufacturing and supply. He will ensure the effective collaboration among these global and interdependent divisions, which is critical to the success of the November 2009 merger of Merck and Schering-Plough and the company's long-term performance. . . .

I think Frazier will make a fine Chairman and CEO.

Pharmacia Fraud Case Back On Track -- Bad News For Ex-CEO Hassan

The 2000-to-2003-era securities fraud cases against Ex-CEO (of both Pharmacia, and later, Schering-Plough) Fred Hassan (and others), for conduct while at Pharmacia, were just re-ignited yesterday, given the Supremes' decision in Reynolds v. Merck.

The very able federal District Court Judge Anne Thompson had previously stayed these cases, pending a decision in Reynolds. The Pharmacia case had presented the same statute of limitations issue then under appellate review, in Reynolds. [Click to enlarge image, at right.] With a decision in favor of the plaintiffs in Reynolds now secured, it is likely that Fred Hassan and Carrie Cox will need to defend these Pharmacia era cases, as well.

We shall see, but this is not the way Celgene, Cardinal Healthcare, Time Warner and Bausch & Lomb really want their directors' names being publicized, I bet.

Tuesday, April 27, 2010

West Point Facility: A "May-Day" Union Strike, Against New Merck?

This just in, from an anonymous New Merck employee, in response to the facilities closings post, the one I posted immediately prior to this -- see bolded portion. It does look to be authentic, to me:

. . . .Was told by our management today about the closings. The people let go from this are on top of and not a part of the ongoing consolidations of departments!

My department was told that the consolation announcements on who are being kept and who is being let go will be made in May. No indication of how many or what criteria they are using to determine who goes and who stays. As an employee of this company it almost feels as if management is purposely keeping people in suspense and turmoil on possible job losses and layoffs. Employee morale is so poor people just want them to get this over with and stop the constant reminder of that any day could be their last day of employment.

Most people will move to Union NJ and some to go to Rahway, and a select few to go to West Point PA how many and who have not been stated.

Merck bought SG for items in its current pipeline, current management of this company doesn’t’ care about SGP’s long term research, they wanted a quick fix for the lagging pipeline from peter Kim’s lack of success running MRL

Also rumor central has it that the West Pont Union committee has voted in favor for a strike. West Point union’s contract is up on May first with a possible one week extension. But negotiations are not going well and the two sides are still far apart on wages and headcount issues.

-- Anonymous April 27, 2010 @ 5:46 PM. . . .

Thanks for the update -- very sad -- to see good researchers pushed off the bench. . . we will keep you in our meditations, daily.

Pharmalot: Three "New Merck" -- Legacy Schering-Plough -- Facilities Closing

The three affected facilities are all in New Jersey -- Roseland, Union and Lafayette.

Do go read Pharmalot -- Ed Silverman's -- story:

. . . .Meetings were held this morning with employees, although there was no specific info available on the number of people who are expected to lose their jobs. However, the layoffs will include a mix of people who work in R&D -- such as in Lafayette, where Schering-Plough Research Institute has offices -- as well as manufacturing, among other things. There is some irony here -- as one source notes, Merck is laying off some of the scientists who helped create the pipeline they so greatly coveted. . . .

Ironic, indeed.

Supremes Allow Vioxx® Securities Fraud Class Action Suit To Proceed

The United States Supreme Court just decided Merck v. Reynolds, in favor of the plaintiffs (a 31-page PDF file). The securities claims may now be tried in the New Jersey District Court. [Background here, and here.]

Bad news for Merck, that:

. . . .Contrary to Merck’s argument, facts showing scienter are among those that “constitut[e] the violation.” Scienter is assuredly a “fact.” In a §10(b) action, it refers to “a mental state embracing intent to deceive, manipulate, or defraud,” Ernst & Ernst v. Hochfelder, 425 U. S. 185, 194, n. 12, and “constitut[es]” an important and necessary element of a §10(b) “violation.” See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U. S. 308, 319. Because the scienter element of §10(b) fraud cases has special heightened pleading requirements, see 15 U. S. C. §78u–4(b)(2), unless a §10(b) complaint sets out facts showing that it is more likely than not that the defendant acted with the relevant intent, the claim will fail. It would frustrate the very purpose of the discovery rule codified in §1658(b)(1) if the limitations period began to run regardless of whether a plaintiff had “discover[ed]” any facts suggesting scienter. . . .

And the Court cannot accept Merck’s argument that the limitations period begins at “inquiry notice,” meaning the point where the facts would lead a reasonably diligent plaintiff to investigate further, because that point is not necessarily the point at which the plaintiff would already have “discover[ed]” facts showing scienter or other “facts constituting the violation.” The statute says that the plaintiff’s claim accrues only after the “discovery” of those latter facts. It contains no indication that the limitations period can sometimes begin before “discovery” can take place. . . .

Indeed. More soon, but this is just as I had predicted back in November 2009.

Monday, April 26, 2010

"Take It Away, Salmon!" -- On Merck's Daxas® COPD Announcement

Merck will market Daxas® (roflumilast), an investigational once-daily tablet for patients with chronic obstructive pulmonary disease (COPD). Here is this morning's Merck announcement. Right now the deal is for Canada and Europe. It may expand, though, if and when approved by FDA.

Here is a less sanguine view of the candidate, offered by MedPage Today:

. . . .Patients taking roflumilast experienced a number of adverse events: altogether, 14% of the patients in the trial discontinued the drug because of problems that included weight loss, psychiatric events including suicide, and the potential for cancer. Diarrhea and nausea were the leading causes of discontinuation.

Psychiatric adverse events were more common in roflumilast patients than in patients taking placebo (6% versus 3%), and roflumilast patients reported a two- to threefold greater incidence of insomnia, anxiety, and depression-related adverse events compared with placebo.

"Of significant concern are the occurrence of three completed suicides and two suicide attempts in COPD patients compared to no suicides/suicide attempts in patients receiving placebo," FDA reviewers wrote.

Also of concern was the greater incidence of cancer. A total of 218 cancer/tumor events were reported in 208 patients -- 60% of whom were in the roflumilast group,and 40% of whom were in the placebo group.

In Forest's briefing documents prepared for the advisory panel meeting, the company says six key studies "consistently demonstrated efficacy of 500 mcg roflumilast over placebo in reducing the rate of moderate to severe exacerbations and improving lung function."

Several months ago, Forest Research narrowed the proposed indication for the drug.

The company originally sought approval of roflumilast for maintenance treatment of COPD. Now, it is seeking approval for reducing exacerbations of COPD associated with chronic bronchitis in patients at risk of exacerbations.

"This change of indication six months into the review period and two months prior to the advisory committee meeting is problematic because it shifts the focus of the efficacy analysis, which was based upon the original indication." the FDA reviewers said. . . .

Paging Salmon. . . Batter, up! Salmon's commentary:
. . . .The 3 completed suicides and 2 attempts are of particular concern. It would be nice to know the denominator, the time frame post starting treatment and other signals of suicidality, e.g. thinking about harming yourself. Even the antidepressant and antipsychotic data that I am familiar with that raises the spectre of drug induced suicidality with those classes didn't have nearly that level of risk.

A 50% increase in cancer/tumors again is a major issue.

As for the change in indication. This is simply hand waving. All COPD treatments are designed to reduce exascerbations, either acutely during an acute attack or prophylacticly. If prophylacticly then by it's very nature it's a maintenence indication whether it uses that particular word or not.

I checked and the primary objective for almost every study states reduction of exascerbations and the studies are typically for anywhere from 3 - 6 months. But even the few that don't say reduction of exascerbation are not for acute attacks so the change in indication is definitely simply handwaving and of no consequence clinically.

It's likely that this change in indication is for marketing purposes for comparison to the labeling for other treatments. If so it's likely designed to imply a reduction in severity of symptoms as compared to other available medications. This may allow them to get physicians to think the risk benefit balance is better than it is.


April 26, 2010 5:11 PM. . . .

Legacy Schering-Plough/Organon Loses Its "Man In Russia" -- To Quintiles

Longer term readers will recall that Ex-CEO Fred Hassan told us -- pre-bust-up -- that increased Russian sales would offset the drop in Vytorin revenue post ENHANCE. Remember? Sure you do. [What a load of vodka potatoes that was! It would have required that one in every seven Roubles spent on drugs in Russia, be spent on Schering-Plough products, even though Schering was then only the tenth largest pharma concern in Russia!] Well, the Russian revenue machine is likewise departing, per a Russian press report:

. . . .In the biopharma industry since 1982, van Bijleveld most recently was General Manager and Vice President, Russian Federation, for Schering Plough, leading substantial growth for the commercial business in the market. Prior to Schering Plough, he held several leadership positions with Organon, including: General Manager, Organon Netherlands; Vice President, Latin America, Middle East and Africa; Sales and Marketing Director Latin America and General Manager Andina; and other leadership positions around the globe. . . .

What a tangled weave, that once was. . . . Carry on.

Saturday, April 24, 2010

Sunscreen "Battle Royale": Nearing A [Partial] Sunset?

The very-able federal District Court Judge Sue L. Robinson has entered an order in Delaware, overnight, requiring that J&J's Neutrogena unit answer two questions, and two questions only -- about whether its Ultrasheer® 100+ product formulation now contains the chemical additive DEHN, and if so, for how long. [Background, here.] Apparently, this issue is central to deciding whether J&J's unit made false and misleading advertising claims under the Lanham Act. I say "apparently", because all the actual motion papers on this particular topic were filed "under seal" -- so I am looking into a black box, as it were. Trade secrets, it seems.

Do remember, though, that J&J's Neutrogena unit has, itself, separately countersued legacy Schering-Plough (now New Merck) -- for Lanham Act violations regarding the Coppertone® products Merck now sells (via likewise allegedly false and misleading representations).

Again, to be clear -- I am reading tea leaves, here -- forgive me if I've not got it exactly right. The whole order is here (as a 3 page PDF file). The snippet:

. . . .If there is no dispute that the [Neutrogena Ultra Sheer product] now contains DEHN, what is an appropriate remedy for [the Neutrogena unit's] false and/or misleading representations regarding the [Neutrogena product]. . . .

This outcome doesn't directly affect J&J's countersuit -- but a loss here, for J&J, would make a settlement -- of both suits -- more likely.

Maley Bellweather Fosamax® Trial: "We Now Join This Program -- Already In Progress"

Despite what the Plaintiffs' MDL site claimed, apparently the Maley v. Merck Fosamax® bellweather trial is already well-underway, in Judge Keenan's courtroom in Manhattan. Tonight, his clerks have electronically entered a week's worth of minute notations on the file jackets. The trial has been underway all week.

Here is the full-text of a letter describing a dispute -- about whether a 30 second section of a recorded deposition would be replayed to the jury, for context -- at the open of this morning's testimony (after apparently having taken a day off on Editor's Note: a Thursday minute entry of "jury trial held" was belatedly entered into the ECF system on April 30, 2010):

April 23, 2010

. . . .Re: In re Fosamax Products Liability Litigation (MDL-1789) Malev v. Merck & Co. Inc., Case No. 06-cv-04110-JFK

Dear Judge Keenan:

I write on behalf of Merck Sharp & Dohme ("Merck") to briefly apprise the Court of two issues that the parties require rulings on in advance of the completion of Dr. Goldberg's testimony being played to the jury this morning.

First, Plaintiffs counsel has informed Merck's counsel that it desires to have the last thirty seconds or so of audio played before we adjourned Wednesday replayed to the jury.

Plaintiffs' Position

The deposition was stopped half way through a very short exam regarding Exh. E-2, which is 1.0922B. The deposition should be resumed at the point where the exhibit is first tendered, which is only about 30 seconds before the break point, so that the jury, which has been off for a day is reoriented as to what the witness is looking at and discussing. Otherwise, the jury will be lost as to the context of the questions and answers.

Merck's Response

The testimony regarding this exhibit was complete. The only question left to be played with respect to this topic is according to Plaintiff the latter question addressed below, to which Merck has objected. As the Court is aware. Plaintiff has made this 1999 exostosis event a focus of her case. Replaying this testimony will only serve to prejudice Merck by reinforcing the purported importance of this portion of the videotaped testimony by having the jury hear it twice.

Second, white examining the transcript from the testimony that did play, Merck's counsel realized that the last question on the record was something that it believed it had agreement should not be played. Plaintiff believes there was no agreement.

Regardless of the reasons why the parties thought differently with regard to this testimony, Merck's position and the question that Merck now knows will follow it are inadmissible. As described below, Merck's position is that the first question and answer should be stricken from the record, and the second not asked when the video resumes.

Disputed Testimony
Goldberg 448:22-449: 5

22 Q. And did you ever, in your expert

23 reports, disclose the '99 Adverse Event Report, this

24 particular one, as an ONJ report?

1 A. No, I did not.

2 Q. How did you miss it?

3 A. At that point in time we were not

4 searching on the term exostosis, which is how this

5 event was coded. So I missed it.

Merck's Objection

This reference to Dr. Goldberg's "expert reports" clearly relates to searches done in conjunction with two regulatory labeling submissions in 2005. Disclosure of exostosis reports in 2005 labeling submissions runs afoul of the March 2004 time bar in place in this case.

Plaintiff' apparently wishes to have the excerpt included for the sound byte "I missed it." However, this unquestionably relates to a 2005 search done in connection with March and August 2005 regulatory submissions, and should be excluded for this reason. Equally, it should be excluded because his testimony is colored by the 2006 updates to this particular exostosis report. This issue already been addressed by the Court with respect to the testimony of Dr. Linda Hostelley. (See ruling at Tr. 1 56:7-20, excluding 2006 discussion of updates to this exostosis report.)

Plaintiffs' Response

The portion re Dr. Goldberg missing the exostosis goes to the very issue of how it was possible for the adverse event system to miss reports like exostosis which describe ONJ-like symptoms. There is nothing in the question which would implicate any post-injury liability. It simply explains, in a timeless fashion, how it was possible for the safety surveillance physician to miss a report such as this. . . .

We'll let you know if there is an electronic record of a ruling on this, before Monday.

Friday, April 23, 2010

BREAKING -- Merck Updates, On Projected Effect Of Reform In 2010 Results

This is a very good move. This is an extraordinary move -- but these are extraordinary times. Merck is updating 2010 forecasts, and only about 10 days before an earnings release. I commend Merck for this -- and the results aren't too terribly awful, just as the results at J&J weren't so awful, earlier this week.

. . . .Merck & Co., Inc. today provided information on the expected impact of the recently enacted U.S. Health Care Reform legislation.

With the passage of health care reform this year, there will be improvements in access to coverage and important market reforms that begin this year. The more significant changes and improvements to coverage and access begin in 2014. Many companies will begin to incur costs related to the Health Care Reform legislation starting in 2010. These costs include increased Medicaid rebates and a one-time non-cash charge related to taxes on post-retirement medical benefits.

Accordingly, in the first quarter of 2010, Merck anticipates that Medicaid rebates and other impacts will reduce revenue by approximately $35 million. The company also plans to take a first quarter non-cash charge, related to the elimination of a tax benefit for retiree prescription drug coverage, of approximately $150 million, which will be excluded from first quarter 2010 non-GAAP earnings per share.

For the full year 2010, Merck anticipates that the increased Medicaid rebates (including Managed Medicaid) and other impacts will reduce revenue by approximately $170 million, which includes the first quarter impact of $35 million mentioned above.

The company estimates that the unfavorable sales impact related to the passage of this legislation, in 2011 will be approximately $300-$350 million. . . .

Smart -- get the news out now. My hat's off to Dick Clark and Peter Kellog, here. Merck's stock just jumped about a buck on the NYSE, on the news. Now about $1.50 up. Nice.

Maley Fosamax® Bellweather Case -- In Manhattan -- Opens Monday

Rebooted. Postponed for one week (to April 26, 2010), in Manhattan's federal district court, the next Fosamax® bellweather case is about to get underway. Jury selection could begin this afternoon, so here (once again) is Merck's version of the jury instructions, and the below excerpt -- at its essence -- is what Merck requests Judge Keenan instruct the jury to decide, when all the evidence is in:

. . . .This lawsuit arises out of Plaintiff Louise Maley’s use of Fosamax. Merck manufactures Fosamax. Plaintiff contends that she developed osteonecrosis of the jaw, or “ONJ,” prior to March 31, 2004 as a result of her use of Fosamax.

The Plaintiff seeks compensatory damages for her injury. She alleges that Merck negligently failed to warn her prescribing physician, Dr. Lawton, that Fosamax created a risk of ONJ, and that such negligence was the proximate cause of her injury.

Merck contends that the scientific evidence does not establish that Fosamax causes ONJ. Merck also contends that Plaintiff never had ONJ, and that any complaints Plaintiff had about facial pain were the result of other factors having nothing to do with Fosamax.

Further, Merck contends that there would have been no basis to warn physicians about ONJ before Plaintiff’s injury in March 2004 because at that time there was no evidence that Fosamax caused ONJ. . . .

Plaintiff’s lawsuit against Merck is based on a single claim known as negligent failure to warn.

Negligence is the failure to use reasonable care. Reasonable care is the care a reasonably careful and ordinarily prudent pharmaceutical company would use under the same or similar circumstances.

Plaintiff alleges that Merck negligently failed to warn her prescribing physician, Dr. Lawton, that Fosamax presents a risk of ONJ; that Dr. Lawton would not have prescribed Fosamax to Plaintiff if Merck had warned Dr. Lawton that Fosamax presents a risk of ONJ; and that Merck’s failure to warn Dr. Lawton about that risk resulted in Plaintiff developing ONJ.

A manufacturer of prescription medication owes a duty to adequately warn physicians about the medication’s risks. This duty runs to the prescribing physician, not the patient, because the physician is the one who weighs a medication’s risks and benefits to decide whether to prescribe it to the patient.

A manufacturer’s duty to warn does not arise until the manufacturer knows or should know of the risk. When determining what a manufacturer should know, it is held to the knowledge of an expert in the field. Because a manufacturer cannot be required to warn of an unknown risk, the knowledge chargeable to it must be limited to the period prior to the date on which the plaintiff incurred her injury, in this case, March 31, 2004.

For her negligent failure to warn claim, Plaintiff has the burden of proving each of the following elements:
(1) By March 31, 2004, Merck knew, or by the exercise of reasonable care should have known, that Fosamax created a risk of ONJ;

(2) Merck should have warned Dr. Lawton of this risk before March 31, 2004;

(3) Dr. Lawton would not have prescribed Fosamax to Plaintiff if Merck had warned Dr. Lawton about this risk;

(4) Plaintiff developed ONJ on or before March 31, 2004; and

(5) Fosamax was the “proximate cause” of Plaintiff’s ONJ.

If the Plaintiff does not prove each of these elements by the greater weight of the evidence, then you must return a verdict in favor of Merck on Plaintiff’s negligent failure to warn claim.

If you determine that Merck should have warned Dr. Lawton about a risk of ONJ, you may presume that Dr. Lawton would have incorporated the risk of ONJ into his decision on whether or not to prescribe Fosamax to Plaintiff. However, Plaintiff bears the burden of proving by the greater weight of the evidence that the risk of ONJ was sufficiently high that it would have changed Dr. Lawton’s decision to prescribe Fosamax to Plaintiff. If Plaintiff does not prove by the greater weight of the evidence that the addition of risk information about ONJ to the Fosamax label would have changed Dr. Lawton’s decision to prescribe Fosamax to her, then you must return a verdict in favor of Merck. . . .

Respectfully submitted,

/s/ William J. Beausoleil

I'll keep you posted as Monday's trial date gets underway in earnest.

Thursday, April 22, 2010

Merck's Januvia®, Beaten By Norvo Nordisk's Victoza®: Tomorrow's Lancet

More hard-scrabble news for Whitehouse Station, here -- this time, published in The Lancet (out tomorrow), and reported by Reuters, tonight:

. . . .Daily injections of both high- and low-dose Victoza® reduced blood sugar levels by more than a daily tablet of Januvia® in people with type 2 diabetes who had not responded adequately to the older drug metformin, researchers said on Friday. . . .

Novo demonstrated two years ago that Victoza controlled blood sugar better than Byetta®, a drug from the same class of medicine that is sold by Eli Lilly and Amylin Pharmaceuticals. . . .

We'll be keenly interested to see whether the declines in Merck's common stock prices, on the NYSE, of late, are simply pricing in health care reform, or reflect a more company-specific set of weaknesses in larger Merck franchise drugs -- Vytorin/Zetia, Cozaar/Hyzaar and now, Januvia. Stay tuned for May 4, 2010 -- at 8 AM EDT -- we'll live-blog it.

More JACC Analysis of Arbiter 6-HALTS, From A Commenter

This anonymous comment deserves top-of-page mention:

. . . .More interesting stuff from the ARBITER-6 paper just published in JACC. Figure 1 tells a huge story! Shows that the greater the exposure (measured by the product of dose/day, adherence, and time on therapy) to ezetimibe, the more atherosclerosis progresses -- and the the greater the exposure to niacin, the more athero regresses. This is very damning for ezetimibe, as it takes any sidebar question of relationship to lipids, etc out of the equation, and just simply describes what happens the more drug exposure over time you have.

Does anyone else find it odd that Merck is so silent on this new publication? Quite the contrast from the Merck PR spin blitzkrieg back in November. C'mon Dick, where's that NYT letter-to-the editor about this new paper??? Peter Kim??? Dick Clark??? All you other shills on the Merck gravy train??? This is a material development in the Zetia/Vytorin story. . . .

-- Anonymous

April 22, 2010 @ 8:48 AM


Wednesday, April 21, 2010

Re-Running An Older Post -- Relevant To Vytorin®, Tonight

Here's a great comment, posted on November 18, 2009 -- about a United Health study presentation that day at a conference in Orlando, Florida; it merits "renewed front-page" exposure [Graphic, at right, depicts the branded version of the drug -- generic versions now abound, though]:

. . . .Let's do a little "Number-Needed-to-Treat" (NNT) and economic analysis, shall we?

From the Stockl presentation of these data at AHA, today:

Vytorin (simvastatin/ezetimibe) 96 events/9983 patients over 1.06 years of follow-up = 0.91%/year event rate

Atorvastatin 115 events/9983 patients over 1.16 years of follow-up = 0.99%/year event rate

Simva 124 events/9983 patients over 1.08 years of follow-up = 1.15%/year event rate

NNT = 1/absolute risk difference

Vytorin (simvastatin/ezetimibe) vs atorvastatin NNT = 1,250. This means you'd have to treat 1250 patients to prevent one event with Vytorin compared to atorvastatin.

Vytorin vs. simvastatin NNT =417

Assuming simvastatin costs 84 cents/day, atorvastatin $3.91/day, and Vytorin $3.74/day:

You'd have to spend $1.7 million to treat 1,250 patients for one year with Vytorin vs. atorvastatin to prevent one event, or spend $570 million for Vytorin vs. simvastatin, for one to prevent one event.

Since your average stroke/MI hospitalization costs about $30,000, we would have to spend way too much money to use Vytorin vs. either atorvastatin or dirt-cheap generic simvastatin. I'm no Peter Orszag, but I'm pretty sure there's no way that will ever be viewed as cost-effective.

Don't think we'll be seeing any such analysis out of the Merck health outcomes shop any time soon.

-- Anonymous, November 18, 2009 10:00 PM. . . .

Glenmark Pharma Prevails -- In Part Of Its Zetia® Patent Challenge has the story -- do go read it all -- but I will say that this one (a couple of my several backgrounders -- here, and here) has a high probabilty of ultimately ending in Glenmark's favor:

. . . .A generic drug maker hoping to sell its own version of the popular cholesterol drug Zetia® has succeeded in knocking out part of Schering-Plough Corp.'s patent protection on the medication. . . .

The ruling came in Schering Corp. v. Glenmark Pharmaceuticals , 07-cv-1334, an infringement suit that Schering filed in March 2007, shortly after Glenmark asked the Food and Drug Administration for approval to market a generic version of Zetia.

Though granted partial summary judgment on the issue, Glenmark still faces allegations that it infringed the earlier patent, which contains claims broader than those added in 2002. . . .

Full $17.8 billion New Merck patent-cliff table, here.

United Health Doubles Co-Pays -- For Merck's Vytorin®. Ouch!

Following up on the United Health-sponsored Vytorin® study that suggested it would take treatment of over 1,250 patients, just to prevent one CV event with the drug, the "other shoe" has dropped. This will accelerate Vytorin's US swoon in Q2 2010. No doubt. Bloomberg Newswire has the story:

. . . .UnitedHealth, the biggest U.S. medical insurer by sales, will start charging patients $50 to $60 for a prescription of Vytorin and Zetia, up from the current co-payment of about $25 to $30, on July 1, said Tim Heady, head of UnitedHealth’s pharmaceutical solutions division.

The move is another blow for Vytorin and Zetia, which combines Vytorin and the generic drug simvastatin. Sales of Vytorin and Zetia have fallen by 14 percent worldwide to $4.3 billion in 2009 from $5 billion in 2007, when a study showed Zetia worked no better than simvastatin alone. UnitedHealth is increasing co-pays for Vytorin to encourage patients to switch to simvastatin, which has significantly gone down in price, Heady said. . . .

I suspect this development may have contributed to Merck's 3.6 percent dive, on double volume, on the NYSE this afternoon. Wow.

Merck To Cover Costs -- By Distributing Third Party's Tetanus Vaccine

Distributing another's vaccine (as opposed to inventing one, oneself) is a generally low-margin endeavor, but mildly good news, for Whitehouse Station, just the same -- here's a report:

. . . .[The] agreement. . . provides Merck with exclusive rights to market and distribute MBL's tetanus and diphtheria toxoids adsorbed (Td) vaccine in the United States, with the exception of Massachusetts, where MBL will continue distributing the vaccine. Merck plans to begin distributing the Td vaccine in June 2010. Specific financial details of the agreement were not disclosed. . . .

They were not disclosed because they are very small, relative to Merck's size. The deal will help absorb some of Merck's considerable vaccine overhead, just the same, though.

Legacy Schering-Plough K-Dur Antitrust "Pay For Delay" Litigation Dismissed

The lawfirm of Howrey & Simon LLP reports (in a PDF file -- White & Case LLP apparently handled the matter for New Merck) that:

. . . .The US District Court for the District of New Jersey has granted Merck & Co., Inc.’s motion for summary judgment in In re K-Dur Antitrust Litigation, MDL 1419, dismissing all claims against defendants Merck and Upsher-Smith Laboratories, Inc. arising from patent litigation settlements between Merck (formerly Schering-Plough Corporation) and Upsher-Smith, and between Merck and ESI-Lederle, Inc. . . .

The Special Master found that to prove their claims, plaintiffs needed to show that the settlements restricted competition outside the scope of Merck’s patent, either because Merck’s patent lawsuits were “sham” lawsuits, Merck’s patent was procured by fraud, or that the settlements, by their terms, restricted entry outside the potential scope of Merck’s patent. . . . The Special Master held that Merck’s patent cases were not “sham” lawsuits, that there was no allegation of fraud on the patent office, and that the settlements were within the scope of Merck’s patents. On March 24, 2010, the US District Court adopted that report and recommendation, dismissing all claims. The private lawsuits followed the filing of a FTC case against Schering-Plough challenging the same settlements. . . . [These have now been dismissed, as well.]

No word on whether the plaintiffs will appeal this dismissal. They have until April 27 to do so.

Tuesday, April 20, 2010

JNJ Guides Lower -- 10 Cents EPS Lower, Due To Health Care Reform

J&J's Q1 2010 conference call Q&A now underway -- CFO Dominic Caruso: Still within the expected $4.80 to $4.90 EPS for the year, but off 10 cents -- to the lower end of the range -- due to reform. J&J also expects currencies to take 8 to 10 cents off of results. Add backs include one time gains.

. . . .It is all driven by Medicaid rebates in 2010; Medicare decreases will show up in 2011. . . . J&J expects exspansion in 2014, when the bulk of the uninsured patients start to receive coverage, and purchase covered drugs. . . .

Waiting for any comment on Remicade/Simponi arbitration with Merck. No comments on that. . . .

More in a minute, but expect most of pharma to be slightly worse than this -- J&J's consumer sales offset a lot of the minuses.

Monday, April 19, 2010

Was Goldman's SEC "Fraud" Similar To JP Morgan Chase's 2008 "Aborted" Bearish Note Offering?

Consider the SEC's press release -- on what, it says, Goldman, Sachs & Co. did -- that crossed the line:

. . . ."The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, Director of the Division of Enforcement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party. . . ."

The SEC alleges that one of the world's largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events. . . .

That, above, is eerily similar to this June 2008 "bearish" note offering (abandoned prior to pricing -- see image at left; click to enlarge), speculating on declines in then Schering-Plough's common stock price.

Within nine days of abandoning the bearish proposed offering's position, JP Morgan Chase published a very favorable (bullish) research report on legacy Schering-Plough's prospects. It may well turn out that the only significant difference between Goldman, Sachs' current predicament and JP Morgan Chase's lack of one, is that it didn't actually go forward with that Schering-Plough offering. Fascinating.

There may be many more of these, sitting silently, in the shadows of Wall and Broad. Un-, or under-disclosed conflicts in public, and private offerings may be the new "black" on the Spring 2010 runway -- at 450 Fifth Street, NW, in DC.

Here's some video on the June 2008 deal:

Stay tuned. There will, as ever, be more to come.