Monday, October 25, 2010

Licensing and the Pharma Patent Cliff

As posted on the Licensing Law Blog October 22nd, 2010, by Richard R. Bergovoy

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic License.

Peering over the edge of a “patent cliff” that threatens to cut deeply into its profits, Big Pharma is considering modifying its current business model of in-house development of all-or-nothing blockbuster drugs towards a business model of in-licensing from biotech startups and university researchers.

The time and cost of developing new drugs from scratch is enormous– typically $2 billion per successful drug and 10 to 15 years from initial research to final regulatory approval.

But during the next five years, many top-selling blockbuster drugs will come off patent, and face severe price competition from generic versions, including: Pfizer’s Lipitor; Astra-Zeneca’s Seroquel; and Sanofi-Aventis’ and Bristol-Myers Squib’s Plavix. Between 2011 and 2014, four of Eli Lilly’s top five sellers will fall off the patent cliff: Zyprexa, Symbalta, Gemzar, and Evista. Estimates peg the total revenue loss to Big Pharma as high as $140 billion through 2016.

In response, analysts at Morgan Stanley are advocating a move away from the go-for-broke nature of the blockbuster business model, towards a Pharma 2.0 model of in-licensing from biotechs and academic researchers, who do all early-stage research and testing, and assume most of the risk. According to their analysis, the return on investment of in-licensed drugs is three times higher than drugs developed in-house.

And it appears that some of Big Pharma is listening. According to thepharmaletter.com, in 2009 the top 10 pharmaceutical companies entered into 12% more health-care focused licensing deals than the year before. Andrew Baum of Morgan Stanley estimates that large European pharmas will cut research spending by 40% in the next two years, and focus on licensing and acquisitions of promising drugs in development.

But for other pharmaceutical companies, the “Not Invented Here” syndrome still rules the day. Eli Lilly, which faces probably the most severe patent cliff among the major pharmas (above), has announced that it will meet the challenge mainly through cost cuts, job cuts, and modifications of existing product lines, rather than major new licensing or acquisition initiatives. It argues that slashing in-house research and development to boost return on investment is a short-term fix that would undermine Lilly’s long-term mission.

As we have argued in other contexts, while licensing may not always be appropriate as a complete replacement for in-house research and development, it is almost always appropriate as a complementary business model. When you are looking over the side of a cliff, Not Invented Here goeth before the fall.

Wednesday, June 09, 2010

Two Top Liability Risks for Psychiatrists: Patients with Suicidal Behavior and Psychopharmacology

as seen in this PRMS (Professional Risk Management Services) press release

Snippet:

Patient suicides may trigger the most lawsuits, but according to PRMS data, cases with the largest verdicts or settlements don't involve the death of a patient, but significant and permanent physical and neurological damage requiring lifelong care. Such damage can occur from things like renal failure from lithium toxicity, severe Stevens-Johnson Syndrome or brain damage from a suicide attempt.

"Defensive medicine is not the answer," said Jacqueline Melonas, RN, MS, JD, Senior Vice President of Risk Management for PRMS. "Care that has a sound clinical basis that also is well-documented is the best way to avoid or, if necessary, defend lawsuits."
more at the link

Tuesday, March 23, 2010

Alabama Psychiatrist Arrested for Drug Trafficking

As seen in this report

FLORENCE, AL (WAFF) - A Shoals area psychiatrist and his wife were arrested in a Huntsville hotel on trafficking charges. Dr. William Roddy and his wife Wendy Sue Roddy were both arrested at the Embassy Suites in Huntsville on Sunday. The two were accused of trafficking a controlled substance, though Huntsville Police would not comment on what the substance was. Trafficking a controlled substance is a felony in the state of Alabama and if convicted a person can serve as much as 20 years in jail for the offense.
also via Psych Search
Huntsville Police Sgt. Mark Roberts says 50-year-old Dr. William Roddy and 43-year-old Wendy Sue Roddy were charged with trafficking in a controlled substance. He says they were arrested on Sunday and were released on $250,000 bail each. Roberts says officers responded to a call about a man with a gun in a hotel parking lot and arrested Roddy. He says a search of Roddy and his hotel room turned up prescription narcotics and thousands of dollars in cash. Police say they searched the couple’s home and found more drugs.