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Editorial: Welcome 2012-Are You Better Off?
It's hard to believe that we have completed another year, as it seems that just a short time ago we were welcoming in 2011. One question that we usually ponder at this time as we prepare for another year is, "Are we better off now than last year at this time?" This is a multi-faceted question that can apply to many aspects of our lives, including:
| Personal Growth | | Yes | No |
| Physical | | ___ | ___ |
| Mental | | ___ | ___ |
| Emotional | | ___ | ___ |
| Spiritual | | ___ | ___ |
| Family Relationships |
| Spouse | | ___ | ___ |
| Children | | ___ | ___ |
| Parents | | ___ | ___ |
| Other family members | | ___ | ___ |
| Professional Growth |
| Profession | | ___ | ___ |
| Job/position | | ___ | ___ |
| Continuing education | | ___ | ___ |
| Participation in pharmacy organizations | | ___ | ___ |
| Social Growth |
| Friends | | ___ | ___ |
| Neighbors | | ___ | ___ |
| Acquaintances | | ___ | ___ |
| Financial Growth |
| Salaries | | ___ | ___ |
| Investments | | ___ | ___ |
| Retirement planning | | ___ | ___ |
| Insurance Planning-all types | | ___ | ___ |
Chances are we are individually better off in some areas, about the same in some, and worse off in others. Regardless of the experiences of this past year, we can't do much about the past except decide how we are going to respond to it. Worrying about it doesn't do anything to change it, but it does affect your outlook for today.
With all the pressures of daily living and the decisions and planning that must be made, it is good to remember the following:
"Life is what happens while we are making other plans"!
Loyd V. Allen, Jr., Ph.D., R.Ph.
Editor-in-Chief
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Walgreens to Cut Costs Resulting from Express Scripts Loss
Walgreen Co. announced that it expects to have to do some cost-cutting as it prepares for losses from its break-up with pharmacy benefit manager Express Scripts Inc. The company said it plans to ease the effect of the split; it will stop filling prescriptions for the Express Scripts pharmacy network as of January 1. The cost-cutting measures are primarily "reductions in selling, general, and administrative expenses and costs of goods sold," in the second half of fiscal 2012, according to the regulatory filing. No layoffs have been announced.
Walgreen Co. said in the regulatory filing that more than 100 health plans, employers, and other Express Scripts clients have agreed to continue filling prescriptions with the pharmacy, which should help Walgreen retain some 10 million of the roughly 88 million prescriptions it filled for Express Scripts.
http://www.chicagotribune.com/business/breaking/chi-walgreens-to-cut-costs-to-help-offset-express-scripts-loss-20111229,0,1803805.story
PHARMA Buybacks, Spinoffs Cater to Investors
What can PHARMA do when R&D productivity is in the tank? Generally, the approach is to create a diversion to look at something else. For example, if PHARMA companies weren't buying back shares by the million this year, they were raising dividends or spinning off units.
Two big actions this year came from Pfizer and Abbott Laboratories. Pfizer announced a company-wide asset review, stirring up talk of a breakup, and announcing plans to shed its $1.9 billion nutritionals unit and $3.6 billion animal health business, but keep its generics unit. It also sold off its Capsugel business for $2.4 billion. How do they use the cash these deals generate�stock buybacks and dividends�at least partly.
Abbott also unveiled its breakup plans by announcing that it would split into two companies: A diversified medical products firm under the Abbott name and an as-yet-unnamed drugmaker.
Also, AstraZeneca and GlaxoSmithKline continued with their multibillion-dollar stock repurchasing plans. Amgen announced a $5 billion buyback plan. Teva joined in just before the holidays with a $3 billion plan. Merck raised its dividend 11%. Pfizer hiked its payout 10% and announced a $10 billion buyback plan. Shareholders may be able to expect the red-carpet treatment to continue since the companies need some investor loyalty to carry them through the patent-cliff years.
http://www.fiercepharma.com/story/should-big-pharma-spin-goose-shares/2011-02-14?utm_medium=nl&utm_source=internal
Hospira Faces Class Actions by Shareholders
Hospira has completed a two-year "restructuring and optimization plan" this year aimed at increasing shareholder value by generating annualized savings between $110 million and $140 million. However, now the company faces a class action suit by angry shareholders claiming the company did not disclose the extent of problems at a North Carolina plant that could cost even more to fix. Hospira's Rocky Mount plant makes generic injectable drugs and also supports Hospira's contract manufacturing business. At full capacity, the facility employs more than 2,500 and accounts for 25 percent of Hospira's nearly $4 billion in annual revenue.
http://www.medcitynews.com/2011/12/hospira-class-actions-claim-company-failed-to-disclose-problems-at-n-c-plant/
Drug Shortages Dominate 2011 Headlines
There were more drug shortages in 2011 than ever before, thanks to a variety of manufacturing problems, financial challenges, and drug plants running afoul of FDA manufacturing practices resulting in lowered production. The number of companies supplying certain low-margin generics dwindled, sometimes to a single manufacturer. Raw materials for some drug ingredients ran short and competitors tried to fill the gap but couldn't boost production overnight. The GAO concluded that the only way to address the problem is to grant the FDA more power and require drugmakers to report potential upcoming shortages.
For about half of shortages, companies will not reveal the reason; however, the reason is important in helping to manage the shortfall. The most common reasons for drug shortages are increased demand, shortages of active ingredients, and manufacturing delays, whether brought on by corporate production upgrades or FDA-mandated remediation.
The drugs mostly on the shortage list include oncology, antibiotics, analgesics, anesthetics, dietary supplements, and antiinflammatories.
http://www.fiercepharmamanufacturing.com/special-reports/top-drug-shortages-treatment-category
Good News/Bad News for New Drug Launches
The FDA reports that 2011 was a very good year for drug approvals when compared with the last decade. Included are Bayers and Johnson & Johnson's Xarelto, sales expected to top $2.5 billion. Also, Xalkori, Pfizer's targeted lung cancer medication, which is expected to grow to blockbuster sales levels, and Vertex Pharmaceuticals' Incivek, which is well on its way to $1 billion already.
However, 2011 was also marred by drug launches that just didn't pan out as expected:
- GSK's Human Genome Sciences sales haven't exactly ballooned, and it doesn't help that U.K. cost-effectiveness gatekeepers decided not to recommend Benlysta for use by the National Health Service.
- Benlysta's slow ramp-up is another example.
- Savient Pharmaceuticals' gout drug, Krystexxa, generated just $1.4 million over the first 6 months of the year.
- Merck's hepatitis C drug, Victrelis, was trounced by Incivek in early sales, with $31 million in May-to-October sales versus Incivek's $420 million.
- KV Pharmaceuticals stumbled with its new preterm-labor preventive Makena-an FDA-approved version of a years-old hormone injection-by setting a $1,500-per-dose price, and then writing compounding pharmacists to warn them away from selling the old unapproved versions. Patient groups and doctors recoiled and the FDA stepped in.
- Dendreon's cancer vaccine, Provenge, fell so far short of its early expectations, they were forced to lay off 500 people. Johnson & Johnson's Zytiga proved a more formidable competitor than anticipated.
http://www.fiercepharma.com/story/trials-and-tribulations-drug-launches/2011-09-30?utm_medium=nl&utm_source=internal
Zohydro, ("Vicodin times 10") May Soon Be on the Market
A pure, more powerful version of the nation's second most-abused drug, which has addiction experts worried that it could spur a new wave of abuse, may be on the market soon. The new product will contain pure hydrocodone. Four companies have begun patient testing, and one of them-Zogenix of San Diego-plans to apply early next year to begin marketing its product, Zohydro.
If approved, this will be the first time patients could legally buy pure hydrocodone. Existing products combine the drug with other analgesics, such as acetaminophen.
http://www.chicagotribune.com/health/sns-ap-us-powerful-painkiller,0,2534481.story
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