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Brief View of the Latest Healthcare Industry_Issue9

Mar- Apr, 2016

F.D.A. Toughens Warning Labels for Some Opioid Painkillers

The Food and Drug Administration is now requiring new warning labels for certain types of opioid painkillers. The agency said the changes would mostly apply to immediate-release opioids—usually intended for use every four to six hours—and would include new boxed warnings, the agency’s strongest type, about the risks of abuse and death. Back in 2013, the agency toughened labeling requirements for extended-release opioids, which are often seen as a bigger addiction risk because of their potency. All the changes announced by the FDA would apply to 87 brand-name drugs and 141 generics. The new labeling requires that drugs should be reserved for pain severe enough to require opioid treatment and for which alternative treatment options are inadequate or not tolerated. The new labels also include “clearer instructions” for directions like initial drug dose and dose changes during therapy. But officials said there were no dose thresholds given, or maximum amounts, which some addiction specialists had been calling for.

Report Shows Theranos Testing Plagued by Problems

According to an inspection report released by federal regulators, medical testing done by the medical start-up Theranos was plagued by quality control problems that could have led to inaccurate results for patients. Among other findings in the report, the company used unqualified or inadequately trained personnel and stored samples in freezers that were not at the proper temperature. It also failed to ensure that the quality control for an important blood-clotting test was acceptable before reporting results for patients. The report is from an inspection last fall of Theranos’s laboratory in Newark, Calif., by the Centers for Medicare and Medicaid services, which regulates clinical laboratories.

Pfizer Confirms Termination of Proposed $160 Billion Allergan Merger

Pfizer Inc. and Allergan Plc terminated their $160 billion merger after the U.S. government proposed regulations to crack down on corporate tax inversions. Both companies blamed the U.S. Treasury Department proposal for ending the deal, and Pfizer said in a statement that it will pay Allergan $150 million in reimbursement for expenses associated with the failed transaction. The termination represents a victory for the Obama administration, who proposed tougher-than-expected new rules aimed at making inversions like the Pfizer-Allergan deal harder to achieve. In an inversion, a U.S. company shifts its tax address overseas, often through a merger. Allergan, which is run from New Jersey but has a legal domicile in Dublin, agreed last year to merge with Pfizer in a deal that would have given the U.S.-based company an Irish address and a lower tax rate. By combining with Irelandbased Allergan, Pfizer could also get access to the billions of dollars in revenue it was keeping overseas in order to avoid paying U.S. taxes on top of the taxes it had already paid in foreign countries.

Allergan signs $3.3bn deal with Heptares

Allergan has signed a $3.3-billion deal with Heptares for access to the UK-based group’s portfolio of experimental neurological therapies. The Dublin, Ireland-headquartered firm has bought global rights to a portfolio of novel subtype-selective muscarinic receptor agonists in development for the treatment of major neurological disorders, including Alzheimer’s disease. Under the deal, Heptares, a wholly-owned subsidiary of Sosei, will bank an upfront payment of $125 million from Allergan, and also stands to receive contingent milestone payments of up to around $665 million linked with clinical development and launch of the first three licensed compounds for multiple indications, as well as $2.5 billion on achieving certain annual sales thresholds.

FDA Panel Votes Against Approving Clovis’s Cancer Drug on Current Data

An independent panel of experts advising the U.S. Food and Drug Administration recommended that Clovis Oncology Inc.’s lung cancer drug not be approved based on existing trial data. The panel voted 12 to 1 against giving the drug an accelerated approval, and recommended the FDA wait for the results from an ongoing latestage trial that compares the drug’s effect to that of chemotherapy. An accelerated approval would allow Clovis to conditionally market the drug, Rociletinib, based on early evidence of its clinical benefit. Rociletinib is designed to treat a subset of patients with advanced non-small cell lung cancer whose condition has worsened despite treatment. It targets patients with a genetic mutation known as T790M that helps tumors evade current lung cancer pills. The panel said existing data on Rociletinib did not adequately characterize its benefit-risk profile over current treatment and also expressed uncertainty about the proposed dose. The FDA is expected to announce its final decision on the drug by June 28.

Sean Parker Donates $250 Million to Launch Cancer Immunotherapy Institute

Silicon Valley billionaire Sean Parker will donate $250 million to launch the Parker Institute for Cancer Immunotherapy, which aims to develop more effective cancer treatments by fostering collaboration among leading researchers in the field. The new institute will focus on the emerging field of cancer immunotherapy, which harnesses the body’s immune system to fight cancer cells. It will include over 40 laboratories and more than 300 researchers from six key cancer centers across the United States including New York’s Memorial Sloan Kettering and Stanford Medicine.

U.S. Drug Spending Climbs

In 2015, the total spending on prescription drugs in the U.S. rose 12.2% to nearly $425 billion, continuing a steep climb fueled by the introduction in recent years of expensive new drugs for cancer and infections, as well as price hikes for older drugs. The spending growth rate decelerated from the 14.2% rise in 2014, partly because of patient expirations for certain drugs, but the growth was still well above the average for the past decade, according to a research arm of IMS Health that produces the annual report on spending. IMS estimated that after rebates and other price breaks, manufacturers received $309.5 billion for U.S. prescription drugs last year, up 8.5% from 2014. The higher total spending figure—$425 billion—is based on the list prices that pharmacies and hospital customers pay drug-wholesale distributors. And while the average list price for patent-protected brands rose 12.4% last year, the net price growth after discounts was 2.8%. Politicians, health-care payers, doctors and patients have increasingly criticized drug pricing in the past year, saying medicines are out of reach for many patients and are straining health-care budgets.

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