Novartis CEO reshapes drugmaker for 'brutal' new world

Reuters | Caroline Copley and Ben Hirschler 

Novartis Chief Executive Joe Jimenez is taking a hard look at the drugmaker's smaller businesses as he reshapes the company for what he expects to be a "brutal" new era in healthcare spending.

At least one of the three sub-scale units - animal health, vaccines and over-the-counter medicines - is not expected to make the cut, he told Reuters in the clearest indication yet of how the review is progressing.

"I really wish we could make all three of those businesses global scale, but I think it's unlikely," Jimenez said.

Eli Lilly freezes salaries, cuts bonuses

Eli Lilly ($LLY) has once again put its payroll in the deep freeze. For the third year in a row, the U.S.-based drugmaker says most employees won't see salary increases because of patent-cliff losses, The Wall Street Journal reports. And Lilly is cutting cash bonuses, too.

Lilly staffers might have seen this coming. Early this year, CEO John Lechleiter said 2014 would be the most financially challenging yet. Still suffering from the loss of Zyprexa's patent in late 2011, Lilly now faces generic competition for its top-selling drug, Cymbalta. Its attempts to fill those sales gaps have been less than successful, with several potential drugs now in the discard pile.

Most recently, Lilly and partner Boehringer lost out at the FDA with their new diabetes drug empagliflozin; the agency refused to approve the drug because of manufacturing shortfalls.

The prospects for pharma companies to develop a commercial trade channel across Europe could hardly be greater.

Few headlines capture the essence of a subject as succinctly as that donning the latest report from A T Kearney on the commercial trade channel (CTC) opening up for pharma companies across Europe. But while compelling arguments can be made for engaging in strategies that involve less detail and more retail, there remain a lot of grey areas for companies that want to take a more commercial approach.

Pablo Moliner, a partner in the company's Madrid office, told a breakfast meeting in London on March 21 that a more directly commercial approach can increase sales of mature drugs by between five and 25 percent. The wide range in potential gains stems from factors such as the kind of drugs, the different opportunities presenting from the varying remuneration arrangements for pharmacists across Europe and the fact the CTC involves relatively new thinking for pharma.

Drug spending "to rise 3%-5% this year"

Pharma Times 

Drug costs are set to rise 3%-5% in all US healthcare settings this year, driven by factors including fewer new generics coming to market, say new forecasts.

Prescription drugs account for around 11% of total US healthcare costs, and spending on these products has lessened in recent years, dropping 0.7% to around $326 billion in the year ending September 30 2013 compared with 2012, according to a new study, which has been published online ahead of print by the American Journal of Health-System Pharmacy (AJHP).

 However, the authors expect a reversal of this trend in 2014, forecasting a 3%-5% increase in drug spending across all settings, with a 5%-7% rise in expenditures for clinic-administered drugs and a 1%-3% increase in hospital drug spending.

They're no Coca-Cola, but top biopharma brands Pfizer, Biogen and Merck still worth billions

FiercePharma | Tracy Stanton

How much is a pharma company's brand worth? More than $4 billion, if that pharma company is Pfizer ($PFE). It's the most valuable pharma brand in the U.S., according to Brandirectory's latest iteration of the Billion Dollar Brands Club. For a company that's among the biggest prescription drug marketers in the world, that might not be so surprising.

You might be surprised at which drugmaker comes next, though. It's not a Big Pharma company, but a Big Biotech: Biogen Idec ($BIIB). Brandirectory tots up its value at $2.64 billion. Merck & Co. follows close on Biogen's heels at $2.61 billion, rounding out the top three.

Glaxo to Bring Doctors In-House as Educational Speakers

 Bloomberg | Makiko Kitamura

GlaxoSmithKline Plc (GSK) plans to hire doctors to educate their peers about its drugs instead of paying external speakers, a further change to its marketing practices following a record fraud settlement in the U.S.

The drugmaker is also investing in improving its multichannel marketing strategy through media such as online streaming of educational content, Deirdre Connelly, head of Glaxo’s U.S. pharmaceuticals business, said in an interview in Philadelphia. The changes come at a time when London-based Glaxo is introducing products recently approved to treat skin cancer, HIV and respiratory diseases.

Glaxo has been reforming marketing practices to improve its reputation. In 2012, the company agreed to pay $3 billion to settle allegations that it illegally promoted its Paxil and Wellbutrin anti-depressants and failed to report safety data on the Avandia diabetes drug. Hiring doctors and medical experts to speak as in-house representatives of Glaxo will provide more transparency, Connelly said.

“We’ll continue to disseminate this very important information on drug benefits and risks, but we’re just not going to do that by hiring external speakers,” she said. “We want to ensure that no one even perceives us to be doing anything wrong.”

The Pharmaceutical Sales Rep Lives to Fight Another Day

 The Wall Street Journal | Ed Silverman

The pharmaceutical industry has shed thousands of sales representatives over the past decade, but drug makers continue to invest in hiring and training, albeit at rates that are only slightly higher than what was seen several years ago. The upshot is that the demise of these marketing stalwarts may have been exaggerated.

Among U.S. drug makers, the annual cost per primary care rep ranges from $125,000 to $200,000, although most companies allocate roughly $160,000, which is up from $150,000 back in 2005. The modest increase reflects less travel, fewer extravagant meetings and lower costs for laptops and tablets, according to a recent report by Cutting Edge Information, a market research firm.

The same factors helped temper cost for reps who call on specialist physicians and hospitals, although the averages were, not surprisingly, higher than for primary care reps. The average cost for a specialty rep was $228,000, while the average annual cost for hospital reps was $243,000, according to the report, which queried 61 drug and seven device makers late last year.

What Do Pharma's "High Performers" Have in Common?

Anne O’Riordan *

A new study of high-performing pharma companies reveals science-based innovation strategies and patient-outcome-based commercial models are now the key drivers of growth. 

A select group of high performing pharma companies are significantly breaking away from the pack in terms of high performance in profitability, growth, future value, consistency and longevity, according to recent biopharmaceutical high performance business research. These high performing pharma companies are able to achieve this by focusing on innovation-driven growth strategies that are substantiated by patient- outcome-focused commercial models.

The research looked at the long-term performance of pure play pharma companies — those that have more than 75 per cent of their revenue derived from pharma products.

In contrast to similar research published last year, the new study found that while good product pipeline and penetration in emerging markets is still driving market growth, investor sentiment has shifted and science-based innovation strategies and patient-outcome-based commercial models are now the key drivers of growth.

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Pfizer's billion-dollar Celebrex patent loss has Mylan, Actavis revving up generics

One of Pfizer's  top-selling products is suddenly vulnerable to generic competition 18 months earlier than expected. A U.S. court nixed a key Celebrex patent, putting the pain drug up for a sales fight in May. And generics makers Mylan and Actavis  are promising to launch their versions as soon as Pfizer's monopoly expires.

Pfizer will appeal, but barring success in a higher court, the company stands to lose billions in sales; Celebrex (celecoxib) brought in $2.9 billion in net sales last year, $1.9 billion in the U.S. Morningstar analyst Damien Conover says the ruling could cost Pfizer $1 billion this year and $2 billion next. And Mark Schoenebaum, an ISI Group analyst, figures Celebrex generics could lop 12 cents off Pfizer's 2014 earnings per share, if they make their debut in May.