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Sandeep Singh Dhillon
NIH And 11 Pharmaceutical Companies Announce $215 Million Collaboration – Forbes
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By Ellie Kincaid , FORBES STAFF

The U.S. National Institutes of Health and 11 pharmaceutical companies today announced the launch of a five-year cancer immunotherapy research collaboration as part of the Cancer Moonshot. In total the partners will contribute $215 million to what they are calling the Partnership for Accelerating Cancer Therapies (PACT).

PACT’s fundamental question, NIH director Francis Collins told reporters in a press conference, is, “why doesn’t immunotherapy work for all patients in all types of cancer, and what can we do about that?”

Top priority in answering that question is testing immune- and cancer-related biomarkers in clinical trials to understand the mechanisms of how cancers respond to or resist immunotherapy. With standardized biomarkers to look at and harmonized assays to test them across many different trials, data from different studies will be more easily compared, Collins said.

Developing standardized biomarkers for immuno-oncology will be “extremely enabling,” like standardizing IP addresses in the early days of the web, Thomas Hudson, vice president for oncology discovery and early development at AbbVie, said at the press conference.

He expects having standard biomarkers and sharing data will help provide a scientific basis for deciding which cancer drugs to try in combination. Given the sheer number of potential combinations, that’s “one of the key reasons we got involved in PACT,” he said. “We don’t think random combinations are the way to go.”

The data for researching biomarkers will come from four National Cancer Institute-funded Cancer Immune Monitoring and Analysis Centers at Dana-Farber Cancer Institute, Stanford Cancer Institute, Precision Immunology Institute and the Tisch Cancer Institute at Icahn School of Medicine at Mount Sinai and University of Texas MD Anderson Cancer Center. The centers will support adult and pediatric immunotherapy trials with tumor and immune profiling.

Getting access to data from clinical trials NCI supports was “very attractive,” Hudson said.

Which biomarkers the collaboration will focus on first is still to be discussed at a meeting the companies will likely have next month, said Douglas Lowy, NCI’s acting director.

The 11 pharmaceutical companies participating are AbbVie, Amgen, Boehringer Ingelheim Pharma GmbH & Co. KG, Bristol-Myers Squibb, Celgene Corporation, Genentech, Gilead Sciences, GlaxoSmithKline, Janssen Pharmaceutical Companies of Johnson & Johnson, Novartis Institutes for Biomedical Research and Pfizer. Each will contribute up to $1 million per year for the five-year partnership, totaling $55 million.

The NCI will make up the rest with $160 million in funding mostly from the Cancer Moonshot, with some coming from regular appropriations, Lowy said.

Read the full article at

Sandeep Singh Dhillon
Malaysia’s healthcare budget below WHO recommendation – The Malaysian Insight
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By Noel Achariam

MALAYSIA’S budget for healthcare is 3% lower than the World Health Organisation (WHO) recommendation and needs to be raised, said a consultant.

InfoMed chief executive officer Mohan Manthiry said the nation’s current budget for healthcare was 4% of the gross domestic product, and the government must spend more to provide quality care especially in public hospitals.

“The general population, where a majority are hard-pressed by inflation, are now flocking to government hospitals.

“Malaysians can’t afford proper healthcare because of stagnant salaries, poor revenues and negative growth.

“The government needs to provide more services, improve facilities and reduce congestion.

“To do this effectively, the government needs to allocate more funds for healthcare,” he said after speaking at the Malaysian Insurance Institute on Medical Health and Insurance Seminar today.

It was reported that the Health Ministry would seek a bigger allocation under Budget 2018 due to increasing medical costs.

Its minister, Dr S. Subramaniam, said the RM23 billion allocated for this year was insufficient, which prompted the ministry’s request for an increased allocation.

He said the ministry was committed to providing the people with quality healthcare.

Budget 2018 will be unveiled in Parliament on October 27. In past budgets, the ministry had received between 10% and 15% more in the annual allocation.

Mohan said according to WHO, the recommended budget for healthcare in Malaysia should be 7%.

“Malaysia’s current budget (for healthcare) is 4% of GDP. Singapore, whose healthcare is among the best in the world, is only spending 5% of its GDP, and is still able to provide quality healthcare.

“This is because the funds have to be efficiently utilised. Otherwise, quality healthcare is not going to be felt by the public.”

Mohan said the healthcare sector should be geared towards prevention and enhancing the education system to reduce incidences of chronic diseases.

“There is a worrying trend in non-communicable diseases, such as diabetes and obesity. This is something we should focus on, which is consuming most of the resources in healthcare. ”

WHO had stated that almost 70% of the global mortality rate was due to such diseases, he said, adding that in Malaysia, the number of patients was on the rise, with the country being No. 1 in diabetes and obesity in the region.

“To manage this, we need to get individuals to take charge. We cannot leave it to the government, doctors and hospitals.

“This has got to do with lifestyle, and one of the major causes is the food we eat.

“We need to have a long-term plan, and I have been advocating the need for education in healthcare.”

Mohan said it was crucial for healthcare to be taught as a subject at the primary school level.

“It should be in the curriculum, where children are taught everything in healthcare and matters related to health, from food and the environment to exercising.

“Such education should start at home, but it’s not happening. So, it has to become part of formal education.

“It is good if this can be implemented in primary schools. Then, the government would not have to spend so much money (in its healthcare budget) because it’s part of the curriculum.”

The original article can be viewed at

Sandeep Singh Dhillon
Malaysia moves forward to combat Hepatitis C; issuing compulsory license to produce generic treatment – MIMS Malaysia
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By Reshmin Kaur Cheema

With the rising costs of the Hepatitis C treatment, Malaysian authorities have decided to step up and take measures to ease patients’ burden. They will be following through on plans to allow for generic companies to produce a version of the expensive Sovaldi (Sofosbuvir) pill.

This sets Malaysia as the first country to initiate such move, amidst global headlines highlighting this distressing financial matter. In light of the difficulties governments are facing – especially in Malaysia – patient advocates have commended the move in widening access to treatments.

Putting things into perspective, MIMS previously reported that roughly 500,000 or 2.5% of the Malaysian population are said to be living with chronic liver conditions.

Different approach to tackling increased costs

Executive Director of South Centre, a non-governmental organisation based in Switzerland, Martin Khor wrote to The Star publication stating, “The government decision is the key to opening the door to affordable treatment. The government will have freedom to choose which drug to buy from which firm, at what prices, and with which other drugs to combine it.”

This latest update comes after the government initial plans to issue a supposed government-use license that was announced last month. Following this, Gilead Sciences went on to expand a 2014 licensing deal. This allows for seven larger generic drug makers, with operations in India, to sell copycat forms in middle-income countries like Malaysia, Ukraine, Belarus and Thailand.

The deal was originally thought up to increase access in 101 low-income nations and shut down criticism over the pricey drug status. However, Gilead still endured objections because some of those from middle-income countries cannot afford the Sovaldi drug. Thus, the Malaysian government has decided to roll out generic licensing to bypass the Gilead patent altogether.

Consumer activists say that Malaysia chose to pursue the license as a less restrictive option. They elaborated that Gilead’s ways would jeopardise an ongoing Malaysian project whereby the authorities are working hand in hand with Drugs for Neglected Diseases Initiative – a non-profit and an Egyptian company to produce a generic treatment.

Varying responses – to commend or remain sceptical

Sangeeta Shashikant, a legal advisor to Third World Network (TWN), opined that with this move, Malaysia is projected to obtain combination Hepatitis C treatments for USD300 and perhaps less. The Gilead license, on the other hand, may not reflect the most affordable prices, as pricing relies on the level of generic competition in the country.

Consumers Association of Penang stated that “It is imperative that the government sticks to its decision to issue a government-use license. This is because there are strict limits to what Malaysia can do or cannot import or produce under the Gilead license, and other factors that restrict the freedom to choose the generic companies that it can work with.”

It continued, “…Therefore, it is best for Malaysian consumers and patients that the government have both the government-use license as well as the license scheme that Gilead will extend to Malaysia. Both can co-exist, providing Malaysia with maximum policy choice.”

However, The Galen Centre for Health and Social Policy said Putrajaya should deliberate negotiating the best possible deal with Gilead – including technical support, concessions and additional assistance.

Chief executive Azrul Mohd Khalib said, “This hard-won development would see increased access to a treatment which will improve the quality of life for patients and most importantly, save lives. It represents a moral victory for the government which has worked hard to enhance access for Malaysians to innovative drugs and treatment to treat emerging health challenges.”

However, “implementing a government-use license would be outside that framework. It could represent a pyrrhic approach to a long-term problem with possible consequences and complications,” cautioned Azrul. MIMS

Full article at

Sandeep Singh Dhillon
Faulty EpiPen allegedly linked to unanticipated patient deaths; FDA issued warning letter – MIMS Malaysia
Pharma News

Tanvi Ambulkar

An EpiPen, which involves administering an emergency injection of adrenaline in the event of life-threatening anaphylactic reactions, is typically used to restore blood pressure and volume. Recently, the makers of EpiPen have come under fire – in view of its failure to properly investigate the complaints that the device misfired during life-threatening emergencies; including several instances, whereby patients later died, according to a warning letter issued by the US Food and Drug Administration (FDA).

Manufacturers failed to conduct comprehensive investigation into complaints received

The FDA alleges that, “Our own data show that you received hundreds of complaints that your EpiPen products failed to operate during life-threatening emergencies, including some situations in which patients subsequently died.” Despite these deaths and more than a hundred complaints, no formal inquiry was initiated by the manufacturer. Inspections of the manufacturing process in a Missouri plantation by the FDA in February and March revealed that there were “significant violations” committed in manufacturing the device.

Several EpiPens were recalled by Meridian Medical Technologies, a Pfizer company, in March to prevent retailing defective devices to customers. A FDA spokesperson has issued a statement expressing that the agency “was not aware of defective EpiPens currently on the market.” The FDA had issued a warning letter to Meridian Medical Technologies elaborating on the drawbacks of the production process. The letter detailed that the company had “failed to thoroughly investigate multiple serious component and product failures for your EpiPen products, including failures associated with patient deaths and severe illness.”

Responding to complaints – here’s what the manufacturing company has to say…

Pfizer insists that the nature of these complaints is expected because the “product is frequently administered by non-medically trained individuals.” In spite of this, the number of complaints lodged by customers should have elicited some form of inquiry into the quality of the products sold. However, Pfizer furthers claims that there is “no information to indicate that there was any causal connection between these product complaints and any patient deaths.”

Pfizer has been responsible for shipping up to 30 million EpiPens since 2015. Kim Bencker, a spokesperson for the company, echoes the beliefs of the manufacturer by stating that Pfizer was “very confident in the safety and efficacy of EpiPen products being produced at the site.” Whilst it is difficult to establish a direct connection between these products and the deaths, several complaints had been lodged where the device had failed to activate in a crisis situation.

Despite several instances of the device failing to work, the complaints were deemed as insufficiently frequent to act upon. Previous objections expressed by the FDA were also condoned and several devices containing the “potentially defective component” continue to be shipped.

Expensive devices may lead to a fall in sales revenue

As tens of thousands of the products have been recalled by companies, such as Mylan, that uphold “quality and patient safety” – Pfizer would most likely be facing tremendous pressure during these challenging times in overcoming this sales slump. Increasing competition in the market for these devices would also be driving prices to lower rates in order to attract a greater number of customers. MIMS

Sandeep Singh Dhillon
New Data Could Add $1.5 Billion To Sales Of Johnson & Johnson Blood Thinner –
Pharma News, Pharma Notables

By Matthew Herper

New data could lead doctors to use Johnson & Johnson and Bayer’s blood thinner Xarelto to prevent heart attacks in some patients, leading to a significant sales boost. In a note to investors earlier this month, Credit Suisse analyst Divan Vamil predicted that a successful result could increase sales of the drug by $1.5 billion in the U.S. alone.

Well, the results are a success, although they come with the same trade-off as any use of a blood thinner: more bleeding. In results published in the New England Journal of Medicine and presented in Barcelona at the annual meeting of the European Society of Cardiology, the combination of a low dose of Xarelto and aspirin cut the risk of heart attacks and strokes, cut the risk of heart attacks by 14%, strokes by 42%, and death by 18%. Forty-one out of every 1,000 people who took the Xarelto-and-aspirin combo would be expected to have a heart attack, stroke, or heart-related death compared to 54 among those who got aspirin alone.

The fact that Xarelto reduced the risk of overall deaths, not just heart attacks or strokes, should convince many doctors to use it. But the study looked only at a very specific group: patients who are at high risk of a heart attack or stroke, but who shouldn’t be getting a different class of clot-preventing drugs that includes the generic clopidogrel, Effient, from Eli Lilly, or Brilinta, from AstraZeneca. Patients who have recently had a heart attack, especially those who were treated by having a heart artery propped open with a metal stent, usually get these medicines for at least several months. But the 27,395-person trial specifically recruited patients who didn’t need these other drugs, and whose disease was stable.

One big opportunity for J&J and Bayer could come from a group that represented only a quarter of the patients in the study: those who’ve come to the hospital because of blood clots in their legs, known as peripheral artery disease. These are caused by artery disease, much like heart attacks and strokes.

Bleeding occurred in three patients out of every hundred in the Xarelto plus aspirin arm of the trial, a 70% increase compared to aspirin alone, although there was no difference in the number of major or fatal bleeding episodes. Peter DiBattiste, J&J’s global head of cardiovascular R&D, says that J&J plans to file with the U.S. Food And Drug Administration for approval for the new use, including the approval of a new, 2.5-milligram dose, by the end of the year.

Sandeep Singh Dhillon
Gilead to Buy Kite Pharma for Roughly $11 Billion — 2nd Update
Pharma News

By Jonathan D. Rockoff Published August 28, 2017

Gilead Sciences Inc. has agreed to pay about $11 billion for Kite Pharma Inc. and its promising new technology for harnessing the body’s immune system to fight cancer, according to people familiar with the matter.

Gilead will pay $180 a share, the people said, representing a 29% premium over Kite’s closing price Friday. The all-cash deal, to be announced Monday, would give Gilead a foothold in a new type of personalized treatment that doctors say could save patients with the most dire cases of cancer and analysts estimate would ring up billions of dollars in sales.

Gilead, of Foster City, Calif., had been looking for an acquisition to diversify its portfolio beyond its leading position in infectious-disease treatments and provide a new revenue stream as sales of the company’s hepatitis C drugs decline.

The deal for Kite would be one of Gilead’s biggest, rivaling the company’s $11 billion purchase of liver-disease drugmaker Pharmasset in 2012. Through that acquisition, Gilead gained hepatitis C therapies that are among the world’s top-selling drugs.

Now Gilead is betting that Kite can provide a similar payoff. Kite, of Santa Monica, Calif., is a leader among several companies that aim to use genetic engineering to weaponize a patient’s own immune T cells and then deploy them to attack lymphoma and other blood cancers.

Kite’s main drug, known as axi-cel, is up for approval in the U.S. and Europe. Analysts predict it would have worldwide sales of $1.7 billion in 2022, according to EvaluatePharma, which ranks the drug among the industry’s top 10 compounds in terms of sales potential. Such expectations have already pushed the company’s shares sharply higher this year.

Axi-cel is likely to face swift, steep competition. Novartis AG, one of the leading cancer-drug makers, beat Kite to be the first company to ask the Food and Drug Administration to approve a bioengineered T-cell drug. Several other companies are developing the drugs too.

Gilead made its name selling treatments for HIV/AIDS. The biotech company surged in value after launching the hepatitis C treatments developed at Pharmasset. The drugs, Sovaldi and Harvoni, helped Gilead double its sales in 2014. It now has a market value of roughly $100 billion.

Last year Gilead had $30 billion in sales, including $9.1 billion from Harvoni and $4 billion from Sovaldi.

Yet the anti-viral drugs’ commercial success has also proved to be an albatross. Gilead faced public criticism and a Senate investigation for listing Sovaldi at $1,000 a day, even though the therapy cured most patients at a cost of less than a liver transplant.

The hepatitis C drugs’ sales were squeezed in recent years when Merck & Co. launched a rival treatment, forcing Gilead to offer steep discounts to health plans. And partly because of the drugs’ success curing the disease, fewer patients needed treatment.

The company’s second-quarter hepatitis C drug sales fell to $2.9 billion worldwide, down from $4 billion during the period a year earlier.

Gilead has faced pressure from investors and analysts to find new revenue sources. Management responded by touting its next generation of HIV/AIDS treatments as well as drugs in development to treat a liver disease known as NASH, for nonalcoholic steatohepatitis.

But Wall Street said Gilead needed to do another deal. Gilead fanned speculation by hiring Alessandro Riva from Novartis to run its hematology and oncology division, as well as its former adviser, investment banker Andrew Dickinson, from Lazard.

After years of surging volume, pharmaceutical deal making has been slow this year, with very few mega-mergers aside from Johnson & Johnson’s roughly $30 billion deal to buy Actelion Ltd. Drug companies have been digesting earlier acquisitions and have also been hampered by uncertainty surrounding tax reform because many of them have large amounts of cash overseas.

The deal is expected to close in the fourth quarter, around the same time as the deadline for U.S. approval of Kite’s main drug, according to the people familiar with the matter.

-Dana Mattioli contributed to this article.

Sandeep Singh Dhillon
MMA urges MOH to clarify process for prescribing branded medicines to patients, especially pensioners – MIMS Malaysia
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The Malaysian Medical Association (MMA) urged on 18 August, for a more efficient and transparent process for prescribing branded medicines to patients, amid the Ministry of Health’s (MOH) “generic first” policy.

MMA president Dr Ravindran R. Naidu said approval for giving patients drugs outside the ministry’s formulary – at public clinics or hospitals – should not rest solely with the Health director-general.

“It’s important to have a transparent process, so everyone knows exactly what is needed for approval,” asserted Dr Ravindran.

“If a safe and effective generic is available in MOH formulary, every public-sector patient should receive the same drug, except where the patient cannot tolerate the generic (e.g. due to allergy). In case of intolerance of generic, the government should supply original drugs ― it’s not the patient’s fault,” he added.

Dr Ravindran said that MOH should instead bring in original drugs with good cost-to-benefit ratio should generics be unavailable, pointing out that “many” drugs do not have generic versions as well.

“Generic first” policy applies to all now

This comes after Health deputy director-general Datuk Dr S. Jeyaindran confirmed, that as part of the “generic first” policy, approximately 700,000 retired government servants will now no longer be reimbursed if they buy brand-name medications that are unavailable at public hospitals – unless they fulfil certain conditions.

Instead, they will receive generic medicines, like other patients, he added.

The policy is part of MOH’s management of medical treatment of federal government retirees and pensioned military veterans, together with the Ministry of Higher Education (MOHE) and the Defence Ministry (MOD), which took effect on 1 June this year.

The change occurred after the contract for the supply of medicines with Oratis Rx Sdn Bhd ended early this year. Pensioners are now told to pay for their purchases first and submit claims subsequently – a process which takes an average of three to six months.

“The process has been made difficult, so people opt for the cheaper generics,” said a doctor who requested anonymity.

Dr Jeyaindran assured that the standard operating procedure (SOP) has been fine-tuned and put into place in the last six weeks, with the Public Service Department (PSD) transferring funds to MOH for pensioners’ healthcare and the Retirement Fund (Inc) (KWAP), handling all dialysis and dialysis-related claims.

Change in SOP causes confusion
However, pensioners lamented that with the change, hospitals needed to approve of the prescriptions first. If approval is declined, pensioners would have to directly pay out-of-pocket for medicines that were previously dispensed for free through Oratis Rx Sdn Bhd.

According to a circular published on 30 June, approval was also needed from the Health director-general to get drugs outside the MOH formulary. This was based on three conditions: drugs in the formulary were ineffective in treating the patient; the patient suffered adverse effects from drugs in the formulary; and the application was not intended to continue medical treatment that had been started at a private hospital or a hospital from another ministry.

This has generated confusion and unnecessary backlog as the rule took effect on 1 June, but only notified relevant parties on 30 June.

The MOH however, remained firm and Dr Jeyaindran cautioned, “If doctors want to use a drug outside the Blue Book, they must justify why the patients need it.”

Efficiency compromised with change

MMA past president Dr Milton Lum said generics are sometimes ineffective in cases of dialysis, high blood pressure and arthritis. There is also an increased resistance to generic antibiotics and common drugs, and there are also no generics for many cancer drugs.

“The Blue Book is based on essential medicines,” explained Dr Lum, referring to the MOH formulary. “They cover the majority of common illnesses, but not everything.”

However, local generics pharmaceutical manufacturers have asked Dr Lum to back up his statement that generics are ineffective in certain cases on 21 August.
In addition, Dr Lum also questioned how long patients and doctors must wait for approval of applications to use branded medicines.

“Is there a process to fast-track it, particularly when it’s needed urgently? What happens if the DG is not in the country? Who approves it then?” he asked.

“It has to be an efficient process with certain timelines for decision to be made, for approval to be given. If you give approval, there is a time lag before you obtain the medicine. So, there has to be efficiency in the process and timelines to be complied with,” he added. MIMS

The full article first appeared at

Sandeep Singh Dhillon
Samsung Wants to Become a Drug Company –
Pharma Extra, Pharma News

Samsung Electronics, the South Korean consumer electronics company is expanding efforts to diversify into the pharmaceutical business, landing its first deal to develop drugs for diseases that are hard to treat.

While the company is best known for churning out mobile phones, semiconductors and other consumer electronics, it recently started to move into the drug market. In late July, The Wall Street Journal reported the company was gearing up to launch a generic version of Johnson & Johnson’s rheumatoid arthritis drug Remicade. The newspaper is now reporting that Samsung is forming a partnership with Japan’s Takeda Pharmaceutical Co. to fund and develop several drugs over the next few years with the first effort focused on a treatment for severe acute pancreatitis. Terms of the deal were not disclosed.

The Path Less Risky
According to the report, the company’s move to get into novel treatments of hard-to-treat drugs is a big enhancement of its drug efforts, but one that is also risky. Only one in 10 drugs that end up with human trials gets approval while companies could spend hundreds of millions of dollars and years working on formulations at the experimental level. Developing a generic version of a popular drug, as with Remicade, has proved to be a less risky strategy for many drug companies. According to the Journal, citing data from EvaluatePharma, the biologic market is on track to have $214 billion in sales in 2017 alone and sales are projected to hit $276 billion by 2020.

With saturation in the smartphone market, and Samsung seeing increased competition from U.S. and Chinese technology firms, the company is seeking ways to diversify beyond consumer electronics, and the pharmaceutical industry is one area it has set its sights on. The generic version of Remicade is expected to sell for 35% less than the current list price for the popular drug.

Samsung got approval from the Food and Drug Administration for the generic version in April, and the launch marked the company’s first push into the pharmaceutical market under its new Samsung Bioepis Co. unit. The biotech arm is going after generic versions of branded drugs that are made from living cells and will address complex diseases like arthritis and cancer, reported the Journal. The brand-name treatments can often cost as much as tens of thousands of dollars a year, presenting a big opportunity for lower-cost players to grab market share. And it is now adding novel drug therapies to its focus, which has always been a goal of the Bioepis unit. “At this stage of our company’s development, we believe this is the next logical step,” said Mingi Hyun, a Samsung spokesman, to the Journal, noting that the unit has held talks with other pharmaceutical and biotech companies to pursue similar deals to its partnership with Takeda.

Read more: Samsung Wants to Become a Drug Company | Investopedia
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Sandeep Singh Dhillon
Goldman Sachs breaks down how Amazon can jump into health care – CNBC
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By Christina Farr, CNBC

Amazon is speeding its efforts to crack the health care market, hiring a number of high-profile executives, testing Echo technology in top hospitals and creating a secret “1492” team dedicated to health-technology opportunities like telemedicine and electronic medical records.

Goldman Sachs is now out with a 30-page report from five research analysts on Amazon’s likely ambitions in the $560 billion prescription drug market. The note cites CNBC’s reporting on the 1492 group and Amazon’s hiring of a general manager to lead its pharmacy unit.

Here are some of the key insights from the report:

  • Rather than replacing pharmacies right away, Amazon might start by partnering with a pharmacy benefits manager (PBM), which acts as an intermediary between payers, like health insurers, and the rest of the health system. That would provide “access to patient data and the potential to cross-sell related products.”
  • Amazon could ultimately improve price transparency for the consumer and reduce out-of-pocket drug costs. But it would likely start by speeding up the drug delivery process and facilitating at-home delivery.
  • Amazon could also become an online pharmacy, retail and online pharmacy, integrated PBM and online pharmacy, or handle drug distribution to pharmacies.
  • One potential — and overlooked — challenge for Amazon might be the so-called “age gap.” Amazon’s customers tend to be younger and healthier than people who typically take prescription drugs.
  • Amazon could move into digital health by using the Echo in clinical settings and developing tools for telemedicine and remote patient monitoring. “Imagine seeing a virtual doctor on your Amazon app, having it prescribe you a certain medication, and then tapping a ‘buy now’ button — all without leaving your home.”

Sandeep Singh Dhillon
GlaxoSmithKline’s new boss streamlines R&D, axes slew of drugs – Reuters
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Ben Hirschler

LONDON (Reuters) – GlaxoSmithKline’s new chief executive announced plans on Wednesday to narrow the focus of the group’s drug research by ditching more than 30 drug projects to improve returns in its core pharmaceuticals business.

Emma Walmsley, who took over in April, said GSK would in future allocate 80 percent of its R&D budget to respiratory and HIV/infectious diseases, along with two other potential areas of oncology and immuno-inflammation.

Thirteen clinical and around 20 pre-clinical programmes will be stopped, partnered or divested, and the group is considering options for its rare diseases unit after a strategic review.

It also plans to stop selling the struggling diabetes drug Tanzeum and end a collaboration with Johnson & Johnson over experimental rheumatoid arthritis drug sirukumab, as well as divesting around 130 old drugs with limited sales.

GSK has lagged behind rivals recently in producing multibillion-dollar blockbusters and has suffered a number of high-profile failures, undermining faith in its R&D skills.

“We’ve been too broadly spread,” Walmsley told reporters, adding that the overhaul would not result in a lower R&D budget because GSK had been investing too little in individual experimental drugs in the past.

Indeed, spending could rise as Walmsley and her team go shopping for promising early-stage experimental drugs to bolster the pipeline in GSK’s priority areas.

The announcement came as Britain’s biggest drugmaker reported a 12 percent rise in adjusted earnings per share in sterling terms to 27.2 pence on sales up 12 percent at 7.32 billion pounds ($9.53 billion).

Analysts, on average, had forecast EPS of 26.2 pence and sales of 7.26 billion pounds, according to Thomson Reuters data.

The group reiterated its outlook for 2020, first given in 2015, forecasting sales growth of low-to-mid single digits and adjusted earnings of mid-to-high single digits on a constant currency basis.

For 2017, it now sees EPS growth of 3-5 percent, against 5-7 percent predicted previously, following investment in a “priority review voucher” to accelerate U.S. approval of a new HIV medicine.

Shares in the group fell 1.3 percent by 1400 GMT, with some investors disappointed that Walmsley had not taken the opportunity to increase long-term financial targets.

Given that she announced an extended cost-cutting programme to deliver an additional 1 billion pounds of annual cost savings by 2020, UBS analyst Michael Leuchten said the cautious approach “suggests tougher underlying trends”.

Following Astrazeneca

Walmsley, who previously headed GSK’s consumer health unit after 17 years working for L’Oreal, is known for her focus on benchmarking business performance and had been expected to revamp pharma R&D.

She had previously said she was considering the divestment of older antibiotics and planning to sell two UK nutritional brands.

Overhauling GSK’s R&D machine is her biggest task, however, and she wants scientific and commercial teams to work closely together to pick winners.

The changes will take time to deliver results but Walmsley does have a window as GSK is not expecting its next wave of new drugs until after 2020. It also has no further major patent expiries until 2026.

To some extent GSK is following in the footsteps of its smaller British rival AstraZeneca, which has divested a large number of non-core drug projects recently. Significantly, former AstraZeneca executive Luke Miels, who joins in September, will be a key lieutenant for Walmsley during the shake-up.

GSK benefited once again in the quarter from a weak pound, after last year’s Brexit vote, as well as strong demand for HIV medicines and the failure, so far, of generic firms to win U.S. approval for copies of its inhaled lung drug Advair.

But HIV competition is set to increase next year and U.S. generics to Advair, which has generated more than $1 billion in annual sales for GSK since 2001, are likely by mid-2018.

The company extended a commitment to pay its current 80 pence per share annual dividend through 2018.

(This version of the story adds dropped first name of CEO in second paragraph)

Additional reporting by Kate Holton, editing by Louise Heavens and Adrian Croft