Brief View of the Latest Healthcare Industry_Issue15

September-November, 2017



Former CDC Chief Launches $225 Million Global Health Initiative

Tom Frieden, former director of the Centers for Disease Control and Prevention, is starting a new initiative to tackle some of global health’s thorniest issues: cardiovascular disease and epidemics. The $225 million initiative, called Resolve, announced September 12th in New York, aims to reduce the global burden of heart disease and stroke, the world’s leading causes of death. It also will focus on helping low- and middle-income countries fight infectious disease epidemics by strengthening laboratory networks so emerging threats are identified promptly, and training disease detectives to track and investigate disease outbreaks, including those that circulate in animals and jump to humans. https://www.washingtonpost.com/news/to-your-health/wp/2017/09/12/former-cdc-chief-launches-new-global-health-initiative/?utm_ term=.5b631effed9c




Amgen Is Taking On a $3 Billion Cancer Drug. But Will It Cut Costs for Patients?

The Food and Drug Administration (FDA) continued its potentially record-breaking pace of new drug approvals, green lighting the first-ever “biosimilar” copycat of a cancer drug. The new treatment, U.S. biotech Amgen’s Mvasi, has a big target in its crosshairs: Avastin, a versatile cancer therapy from drug maker Roche that rings in nearly $7 billion in global annual sales, including $3 billion in America. Avastin is, like many cancer drugs, extremely expensive. And that was one of the motivations for introducing a clinically-proven competitor like Mvasi (also known as bevacizumab-awwb) to the market. It’s unclear how Amgen and partner Allergan will price Mvasi. http://fortune.com/2017/09/15/amgen-roche-avastin-biosimilar-price/




Pfizer Alleges J&J Thwarted Competition to Remicade, in Legal Test of Biotech-Drug Copies

Pfizer Inc. filed suit against Johnson & Johnson alleging J&J thwarted competition to its arthritis therapy Remicade, in a case that could shatter arrangements pharmaceutical companies make with insurers to protect their franchise products and threaten efforts to bring down the costs of the most expensive drugs. The lawsuit is the first antitrust action to surface amid the emergence of biosimilars, which are copies of popular biotech drugs, after years of litigation over patents and timing of launches. Pfizer’s Inflectra is the biosimilar of Remicade. Inflectra was developed by Celltrion Inc. of South Korea. Pfizer has the rights to sell the drug in the U.S. Scott Hemphill, a professor of antitrust law at New York University School of Law, said Pfizer will need more than J&J’s contracts with health insurers and hospitals to prevail.

https://www.wsj.com/articles/pfizer-files-antitrust-lawsuit-alleging-j-j-thwarted-use-of-biosimilar-rival-toremicade-1505913080



F.D.A. Approves Second Gene-Altering Treatment for Cancer

The Food and Drug Administration approved the second in a radically new class of treatments that genetically reboot a patient’s own immune cells to kill cancer. The new therapy, Yescarta, made by Kite Pharma, was approved for adults with aggressive forms of a blood cancer, non-Hodgkin’s lymphoma, who have undergone two regimens of chemotherapy that failed. Before it was approved and named Yescarta, Kite’s treatment was known by other names: axi-cel, axicabtagene ciloleucel, or KTE-C19. The company also hopes that Yescarta will eventually be approved for earlier stages of lymphoma, rather than being limited to patients with advanced disease who have been debilitated by multiple types of chemotherapy that did not work, said Dr. David D. Chang, Kite’s chief medical officer and executive vice president for research and development.

https://nyti.ms/2zjEtsf


How Would CVS and Aetna Fit Together?

CVS Health Corp. is reportedly in talks to buy Aetna Inc. for more than $66 billion. Aetna became the biggest customer of CVS’s PBM unit under a 12-year deal struck in 2010 between the two companies. A combination with CVS would let Aetna push further into the health-care-delivery space, as well as integrating the health coverage it provides with all of CVS’s pharmacy-focused services and clinics. The real growth opportunity for CVS is in the pharmacy-benefits business. Revenue and profits for CVS’s pharmacy-services operations, comprising mainly the PBM business, have been growing at a faster clip than the company’s retail business.

https://www.wsj.com/articles/behind-the-potential-cvs-aetna-deal-1509129970




U.S. Hospitals Wrestle With Shortages of Drug Supplies Made in Puerto Rico

Hospital pharmacists across the country are racing to find vital drugs after Hurricane Maria halted production at the factory in Puerto Rico. In addition to creating a humanitarian crisis on the island, the storm knocked out production at the Puerto Rican factories that make vital drugs, medical devices and medical supplies that are used around the world. In a recent interview, Dr. Gottlieb said he was worried that if conditions don’t improve, more shortages — of both drugs and medical devices — might follow by early next year. Pharmaceutical products made in Puerto Rico account for nearly 10 percent of all drugs consumed by Americans, and about 80 firms make medical products there. https://nyti.ms/2zyhiup




Courts Reverse Johnson’s Baby Powder Judgments for Nearly $500 Million

In back-to-back victories for Johnson & Johnson, the courts have reversed two judgments against the consumer products giant totaling nearly $500 million. The money had been awarded to women who said that they developed ovarian cancer after using the company’s talcum powder for decades. In her ruling, Judge Maren E. Nelson granted the company’s motion for a new trial. The judge cited the “insufficiency of the evidence” and said that the damages awarded were excessive. The potential dangers of talcum powder are a subject of debate within the medical field, in part because the evidence varies. National health organizations are cautious about drawing any firm conclusions. https://nyti.ms/2zwL3f5




Samsung Reports Operating Profit, Extends Collaboration With Merck KGaA

Samsung reported a KRW 20.5 billion operating profit ($18.2 million), on KRW 127.5 billion ($113.4 million) in revenues for the quarter as its first plant runs at full pace and its second facility continues to draw new contracts, the company said. Its net loss, however, widened to 31.7 billion won ($28.2 million) from 9.6 billion won in the same quarter a year ago, primarily because of “call option valuation losses on its subsidiary company,” it reported. Under the reiterated deal first struck in 2014, Merck will provide process development and some technical training for its Mobius single-use technology which Samsung BioLogics uses.

http://www.fiercepharma.com/manufacturing/samsung-reports-operating-profit-extends-collaboration-merck-kgaa




Novartis Picks Centerview To Explore Sale of Dermatology Unit: Sources

Novartis is working with Centerview to review options for its dermatology business, including a possible sale, as it trims non-core assets. The mandate, which comes after Novartis’ $3.9 billion purchase of French radiopharmaceutical firm Advanced Accelerator Applications (AAA), is likely to pave the way for a sale of the group’s dermatology drugs, which could fetch up to $ 1.5 billion.

http://www.reuters.com/article/us-novartis-dermatology-m-a/novartis-picks-centerview-to-explore-sale-of-dermatologyunit-sources-idUSKBN1D22PA




As Amazon Entry Into Pharma Looms, CEOs See Plenty of Room for Change in Distribution

Online retailing giant Amazon has yet to publicly disclose any plans to get into drug sales, but the mere speculation has pharma CEOs thinking, and speaking, about how it could entirely remake their world. Goldman Sachs analysts have put out a 30-page report outlining several options for Amazon in pharmaceuticals, writing that a partnership with an existing PBM is a “path of least resistance.” One Bernstein analyst said he believes the company will have its pharmacy business set up by 2019 and ready to compete for business in 2020, while a Leerink analyst has said “it’s a matter of when, not if” that Amazon will move into drugs.

http://www.fiercepharma.com/pharma/drug-execs-see-amazon-s-potential-to-shake-up-distribution




New York City and State Battle Over Health-Care Funding

New York City and state officials clashed over funding for the city’s public-health system amid looming federal cuts. Officials with NYC Health + Hospitals, which runs the city’s 11 public hospitals, disclosed in a letter to the state that they have enough cash on hand to operate for only about two weeks because they haven’t received $380 million from the state that they expected to be paid out earlier this year. Gov. Andrew Cuomo’s administration said that the city is exaggerating its case, as state officials prepare for a loss of about $2.6 billion in federal funding over several years to hospitals statewide and look to reorganize state dollars. The city’s publichealth system already is in dire financial straits.

https://www.wsj.com/articles/new-york-city-and-state-battle-over-health-care-funding-1506985681unit-sourcesidUSKBN1D22PA




CVS Will Offer Next-Day Delivery of Prescription Drugs

CVS Health said that it would begin offering next-day delivery of prescription drugs and same-day service in some big cities next year, reflecting the company’s worries about potential competition from Amazon and as its retail sales declined in the third quarter of this year, a dip that the company said occurred because of the three major hurricanes that forced many stores to close. A CVS spokeswoman, Erin Pensa, said the company’s delivery partner has not been announced, but that they have been able to use their scale to negotiate low-cost, affordable options for all CVS Pharmacy customers.

https://nyti.ms/2j4HWYS




Korean Cosmetics Maker Buys U.S. Firm for US $50 Million

Cosmax Co., a South Korean cosmetics maker, has acquired a U.S. company for US$50 million to expand its foothold in the North American market. The Korean company said it recently signed a contract to buy all of NuWorld Beauty. Cosmax is the country’s leading original design manufacturer (ODM), making products ranging from skincare to haircare and facial masks. Cosmax said it will strengthen its production and marketing capabilities, research and development following the acquisition, with an aim to post 200 billion won ($178 million) in revenue in the U.S. market alone by next year, and 3 trillion won worldwide by 2020. http://english.yonhapnews.co.kr/news/2017/11/13/0200000000AEN20171113008200320.html




Trump Chooses Alex Azar for Health and Human Services Secretary

President Trump nominated a pharmaceutical executive to be the next secretary of the Health and Human Services Department. The nominee, Alex M. Azar II, served as a deputy at the department under former President George W. Bush. From 2011 to 2017, he was the head of the pharmaceutical company Eli Lilly’s United States Division where he worked for a decade. Mr. Trump said that Mr. Azar will play a key role for better health care and lower drug prices but the choice immediately raised new doubts among some lawmakers and industry observers about the president’s stated commitment to rein in drug companies.

https://nyti.ms/2hwZgoN




Bill Gates Makes $100 Million Personal Investment to Fight Alzheimer’s

Billionaire Microsoft co-founder Bill Gates is to invest $50 million in the Dementia Discovery Fund. The investment – a personal one and not part of Gates’ philanthropic Bill & Melinda Gates Foundation – will be followed by another $50 million in start-up ventures working in Alzheimer’s research, Gates said Despite decades of scientific research, there is no treatment that can slow the progression of Alzheimer’s. Current drugs can do no more than ease some of the symptoms. Gates said, however, that with focused and well-funded innovation, he’s optimistic that treatments can be found, even if they might be more than a decade away.

http://www.reuters.com/article/us-health-dementia-gates/bill-gates-makes-100-million-personal-investment-to-fightalzheimers-idUSKBN1DD0S3

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