Governors Push Pfizer About Jobs in AstraZeneca Deal

Bloomberg |  Michelle Fay Cortez 

The governors of Maryland and Delaware have asked Pfizer Inc. Chief Executive Officer Ian Read whether jobs will be cut in their states after the drugmaker promised to keep people employed in the U.K. as a way to further a $100 billion-plus bid to buy AstraZeneca Plc. (AZN)

If the acquisition occurs, it would allow Pfizer to move its legal address from New York to the U.K. to gain a lower tax rate. Read told U.K. Prime Minister David Cameron that Pfizer would keep at least 20 percent of the combined company’s research and development workers and substantial manufacturing facilities in the U.K. for at least five years to win support for the deal.

Samsung Invests in Drugs

Bloomberg | Kanoko Matsuyama and Jungah Lee

 

Samsung Group transformed its electronics unit into the world’s largest smartphone maker by outselling Apple Inc. (AAPL) Now it’s setting sights on the drug industry.

South Korea’s biggest company is investing at least $2 billion in biopharmaceuticals, including the growing segment of biosimilars, which are cheaper versions of brand-name biotechnology drugs that have lost patent protection.

Samsung, with $327 billion annual revenue, aims to become a major force in biotechnology, an industry expected to generate sales of more than $220 billion in five years. With the electronics market reaching saturation, billionaire chairman Lee Kun Hee has been investing in new areas that might shore up growth for the family-controlled company.

“We are in an infancy still,” Christopher Hansung Ko, chief executive officer at the Samsung Bioepis unit, said in an interview. “We are a Samsung company. Our mandate is to become No. 1 in everything we enter into, so our long-term goal is to become a leading pharmaceutical company in the world.”

At the heart of those plans are biosimilars. Samsung plans to sell its first biosimilar version of Amgen Inc. (AMGN)’s arthritis therapy Enbrel in 2016 in Europe and a version of Johnson & Johnson (JNJ)’s Remicade treatment for autoimmune diseases in 2017, according to Ko. A separate unit called Samsung Biologics Co. has contracts to manufacture biologic medicines for branded pharmaceutical companies.

Big Pharma's Favorite Prescription: Higher Prices

Bloomberg | Robert Langreth*  

Earl Harford, a retired professor who lives in Tucson, recently bought a month’s worth of the pills he needs to keep his leukemia at bay. The cost: $7,676, three times more than when he began taking the pills in 2001. Over the years he’s paid more than $140,000 of his retirement savings to cover his share of the drug’s price. “People with this condition are being taken advantage of by the pharmaceutical industry,” says Harford. “They haven’t improved the drug; they haven’t done anything but keep manufacturing it. How do they justify it?”

As evidenced by Pfizer’s (PFE) proposed $100 billion-plus takeover of AstraZeneca (AZN), Big Pharma is in the throes of the greatest period of consolidation in a decade. One reality remains unchanged, however: Drug prices keep defying the law of gravity. Since October 2007 the cost of brand-name medicines has soared, with prices doubling for dozens of established drugs that target everything from multiple sclerosis to cancer, blood pressure, and even erectile dysfunction, according to an analysis conducted for Bloomberg. While the consumer price index rose just 12 percent during the period, one diabetes drug quadrupled in price and another rose 160 percent, according to an analysis by DRX, a provider of comparison and management software for health plans.

Starting prices for drugs are escalating as well. Fifteen cancer drugs introduced in the past five years cost more than $10,000 a month, according to data from Memorial Sloan Kettering Cancer Center. A cholesterol-lowering treatment for those with certain rare genetic disorders costs $311,000 a year, and a cystic fibrosis medicine—developed partly with funding from a charity—costs $300,000 annually.