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Feb
8
Sandeep Singh Dhillon
60-Year-Old Drug May Hold Clues To Stopping Spread Of Breast Cancer – Forbes
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By Victoria Forster , CONTRIBUTOR

One of the oldest chemotherapy drugs in the world may be able to stop breast cancer spreading, according to a study published today in the journal Nature.

As with many types of cancer, most people who die of breast cancer do so not because of their primary tumor, but because their cancer spreads to other organs. For this to happen, the cancer cells must leave the original tumor, enter the bloodstream and then settle and grow in other organs. Once cancer has metastasized like this, the chances of survival are drastically lower than in individuals without metastasis.

Researchers at the Cancer Research UK institute at Cambridge University, U.K. found that giving L-asparaginase to mice and limiting the asparagine they consumed in their food greatly reduced the spread of breast cancer cells. It works by blocking the production of an amino acid called asparagine, which can be produced in the body by an enzyme called asparagine synthase or consumed in food. To confirm this, the scientists used RNA interference to block the production of asparagine synthase and found similar effects on the spread of the breast cancer cells.

L-asparaginase has been used for decades to treat children with leukemia and was originally pioneered in the 1950s after it reduced the growth of lymphomas in rat models. Some children with a particular type of leukemia show resistance to L-asparaginase and this has previously been linked to their levels of asparagine synthase, so the researchers examined data on breast cancer patients, which indicated that breast cancer cells that were able to make lots of asparagine were more likely to spread.

Professor Greg Hannon, lead author of the study, said: “Our work has pinpointed one of the key mechanisms that promotes the ability of breast cancer cells to spread. When the availability of asparagine was reduced, we saw little impact on the primary tumor in the breast, but tumor cells had reduced capacity for metastases in other parts of the body.”

In the future, the scientists hope that nutritional interventions such as limiting asparagine, which is found in high quantities in soy, dairy, poultry and seafood, might stop the disease spreading and improve overall survival. However, specialists are keen to advise against breast cancer patients drastically changing their diets as a result of these new findings.

Martin Ledwick, Cancer Research UK’s head nurse, said: “Research like this is crucial to help develop better treatments for breast cancer patients. At the moment, there is no evidence that restricting certain foods can help fight cancer, so it’s important for patients to speak to their doctor before making any changes to their diet while having treatment.”

L-asparaginase is not the first “old” drug for which scientists have found new potential uses. Thalidomide, the much-maligned drug responsible for serious birth defects after being given to pregnant mothers in the 1960s is now being used as an FDA-approved treatment for multiple myeloma and is in clinical trials for seemingly every other imaginable type of cancer.

Aspirin is also a hot research topic currently, proposed to prevent some types of cancer and big-hitting research institutions such as St. Jude’s in Memphis, focusing on childhood cancer, have entire research programs dedicated to repurposing existing drugs for new treatment possibilities.

With so much focus on new treatments, this is yet another reminder that successful cancer treatments might be already right underneath our noses.

This article originally appeared at https://www.forbes.com/sites/victoriaforster/2018/02/07/sixty-year-old-drug-may-hold-the-key-to-stopping-spread-of-breast-cancer/#b9159e8423e8

Feb
1
Sandeep Singh Dhillon
If Amazon And Buffett Lift Veil On Health Prices, Insurers Are In Trouble – Forbes Healthcare
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By Bruce Japsen , CONTRIBUTOR

Jeff Bezos’ Amazon and Warren Buffett’s Berkshire Hathaway are forming their own healthcare company with JPMorgan Chase to increase transparency for their employees, and that could be bad news for insurers and pharmacy benefit managers.

Health insurance companies and PBMs have long said they want to bring more transparency to the U.S. healthcare system, yet consumers often don’t know the true cost of healthcare. Prices are negotiated in secret and doctors don’t often know what their own services cost or what their patients will be charged.

Details of the new company the three corporate giants want to create remain sketchy, but the idea that they want to bring more transparency is one of the disclosed goals. “Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.

Those who’ve been engaged in the struggle to find the true cost of healthcare have been working for years with limited success. Often times, they have difficulty getting data from health plans or medical care providers.

“Resistance to transparency in healthcare remains high,” says Network for Regional Healthcare Improvement CEO Elizabeth Mitchell, who welcomes Amazon, Berkshire and JPMorgan’s new company. “Employers who pay for this care still don’t have insight into the relative value of what they are buying. They are looking for a way to have assurance that they are paying a fair price for a high quality service.”

The Network for Regional Healthcare Improvement has long said any health reform effort needs to look closely at transparency because data that reveals the total and true cost of care is difficult to find. In a report last year, NRHI said health spending by U.S. commercial insurers can vary by $1,000 or more per year per patient, depending on where enrollees live.

The potential for the Amazon-Berkshire healthcare company to disrupt the way health plans do business is one reason shares of many healthcare companies tumbled Tuesday after the partnership was announced.

Shares of insurers like Aetna, Anthem and UnitedHealth Group lost 5% to 10% of their value while pharmacy chains CVS Health, Walgreens Boots Alliance and drug makers with expensive medicines like Abbvie also took a hit on Wall Street. And the big PBM, Express Scripts, also lost more than 2% of its value Tuesday.

Nobody knows for sure what Amazon, Berkshire and JPMorgan have in mind because they said their effort is in its “early planning stages.” The trio tapped three executives to get the company off the ground: Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. No further details were disclosed, including where the company would be located.

Some think Amazon could leverage its technology platform to make a dent in the healthcare cost curve and improve transparency.

“Amazon may spur new technology innovations” such as artificial intelligence or information sharing platforms that “can increase the efficiency of healthcare delivery,” said Idris Adjerid, a management IT professor in the University of Notre Dame’s Mendoza College of Business. “Our research substantiates this potential value. We find that technology initiatives, which facilitated information sharing between disconnected hospitals resulted in significant reductions in healthcare spending.”

Studies show 30% of the money spent on healthcare is waste. Amazon, Berkshire and JPMorgan said the initial focus will be on “technology solutions” that will provide U.S. employees and their families with “simplified, high-quality and transparent healthcare at a reasonable cost.”

But given Amazon’s popularity among consumers and the decades of success Buffett has built with his businesses, the executives say improving patient experience and customer service will also be a target of the new company.

“These businesses understand customer service,” Mitchell of the Network for Regional Healthcare Improvement said of Amazon, Berkshire and JPMorgan. “Reorienting healthcare to being customer focused is exactly what is needed and will require massive and overdue change.”

This article originally appeared at https://www.forbes.com/sites/brucejapsen/2018/01/31/if-amazon-and-buffett-lift-veil-on-health-prices-insurers-are-in-trouble/#6a8a085141c0

Jan
25
Sandeep Singh Dhillon
Novartis Climbs Out of Its Growth Pit – Bloomberg Gadfly
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Its new CEO has challenges but is starting from a good place.

By Max Nisen

Incoming Novartis AG CEO Vas Narasimhan is taking over at the right time.

As it reported fourth-quarter earnings on Wednesday, the company predicted it will grow sales in 2018 after a multi-year slump. Departing CEO Joe Jimenez is leaving many difficult decisions for Narasimhan as he cedes control next week. But he is also leaving a company with an unusually rich set of assets and a pretty high margin for error.

One of Jimenez’s nicest parting gifts is a return to sales growth for the company’s troubled Alcon eye-care division. That makes the decision (delayed until 2019) to sell or spin off the unit less urgent; it’s no longer an obvious drag on the share price. And there’s real hope of increasing the return of an eventual divestiture by further improving results.

But generics unit Sandoz has emerged as a new problem child, hurt by a difficult pricing environment. U.S. sales fell 17 percent in the fourth quarter from a year ago, Novartis said Wednesday. Narasimhan on the earnings call outlined a strategy to help Sandoz, moving away from products most subject to pricing pressure and toward more-complex (read, expensive) alternatives. But several other generic drugmakers are pursuing the same strategy, and it won’t be an easy or quick fix.

Sandoz’s success depends largely on the progress of Novartis’s heavy investment in biosimilars — the equivalent of generics for complex drugs made in living cells. But it’s far from alone in that endeavor, and the lucrative U.S. market is proving highly difficult and time-consuming to crack.

On the novel drug side — the source of 67 percent of Novartis’s revenue in 2017 — Narasimhan will inherit a broad set of new medicines to help overcome sales declines of older stalwarts such as Gleevec. But heavy competition awaits. Cosentyx, the firm’s best recent launch, is fighting it out in psoriasis with both well-settled blockbusters such as Humira and newer drugs such as Taltz and Tremfya. Breast-cancer drug Kisquali and an upcoming migraine medicine are also in intensely competitive classes.

Pharmacy benefit managers will likely have a field day extracting big discounts on these drugs, and the marketing battles will be fierce.

Novartis’s heart failure drug Entresto has been dogged by payer restrictions since its 2015 approval due to its cost and large patient population. It’s still far from the company’s diminished $3 billion plus estimate of its potential peak sales.

Still, at least Novartis has new drugs. Some of its medicines are in less-competitive markets. And while I am constitutionally skeptical of Narasimhan’s claims that the company will boost productivity via investment in automation and AI, his pledge to prune the firm’s research pipeline more aggressively is promising.

Though Novartis hasn’t done much on the M&A front, it has the capacity to invest if pharma growth lags once more or if Sandoz proves tough to fix. Its balance sheet is strong. And it can generate a flood of cash by selling out of its consumer joint venture with GlaxoSmithKline PLC and its separate multi-billion-dollar equity stake in Swiss rival Roche Holding AG. It could also speed up its decision on what to do with Alcon.

But its financial position gives it the luxury of waiting for the best return on these disposals while enjoying a cheap boost to its income in the meantime.

There are pitfalls ahead for Narasimhan. But at least he’s not starting in one.

This article originally appeared at https://www.bloomberg.com/gadfly/articles/2018-01-24/novartis-earnings-climbing-out-of-a-growth-pit

Jan
3
Sandeep Singh Dhillon
New drug approvals hit 21-year high in 2017 – Reuters
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Ben Hirschler

LONDON (Reuters) – U.S. drug approvals hit a 21-year high in 2017, with 46 novel medicines winning a green light — more than double the previous year — while the figure also rose in the European Union.

The EU recommended 92 new drugs including generics, up from 81, and China laid out plans to speed up approvals in what is now the world’s second biggest market behind the United States.

Yet the world’s biggest drugmakers saw average returns on their research and development spending fall, reflecting more competitive pressures and the growing share of new products now coming from younger biotech companies.

Consultancy Deloitte said last month that projected returns at 12 of the world’s top drugmakers were at an eight-year low of only 3.2 percent.

Many of the drugs receiving a green light in 2017 were for rare diseases and sub-types of cancer, which often target very small populations, although they can cost hundreds of thousands of dollars. (tmsnrt.rs/2hGom21)

Significantly, the U.S. drug tally of 46 does not include the first of a new wave of cell and gene therapies from Novartis, Gilead Sciences and Spark Therapeutics that were approved in 2017 under a separate category.

U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb has hailed these products as “a whole new scientific paradigm for the treatment of serious diseases”. However, there is debate as to how cash-strapped healthcare systems will pay for them.

Under Gottlieb, the FDA has taken advantage of policy changes implemented in recent years to accelerate the drug approval process.

Procedures such as the agency’s “breakthrough therapy” designation have cut review times and helped to stimulate competition by adding multiple new drugs that often work in a similar way.

A wide choice of medicines with the same mechanism of action can be a double-edged sword for manufacturers, since it gives insurers and governments ammunition to drive down prices.

Pfizer and Merck’s new diabetes drug Steglatro, for example, was the fourth product of its kind to win a green light in the United States, while Novo Nordisk’s Ozempic was the sixth of its type. Both were approved in December.

In cancer, AstraZeneca’s Imfinzi was the fifth medicine to target a key protein found on the body’s immune cells when it won approval last May.

For the current year, companies have more new products waiting in the wings, although the pace of FDA approvals may be tempered by the fact that several drugs that had been expected to be cleared in the first quarter of 2018 were actually approved in 2017.

In Europe, meanwhile, the focus will be on any disruption or delays to the approval process as the European Medicines Agency prepares to relocate from London to Amsterdam as a result of Britain’s decision to leave the European Union.

Reporting by Ben Hirschler; Editing by Keith Weir

This article originally appeared in https://www.reuters.com/article/us-pharmaceuticals-approvals/new-drug-approvals-hit-21-year-high-in-2017-idUSKBN1ER0P7

Dec
13
Sandeep Singh Dhillon
Chemotherapy-Free Cancer Treatments Move Closer To Reality – Forbes
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By Victoria Forster, CONTRIBUTOR

CAR T-cells first hit the headlines in 2012 after saving the life of a young girl in Philadelphia, Emily Whitehead, who was running out of options to treat her aggressive, relapsed leukemia. Doctors removed some of her T-cells, genetically modified them to attack a protein called CD19 on her leukemia cells and injected them into her bloodstream. Just three weeks later, she was in remission.

Although rare, it is not unheard-of for new treatments to achieve substantial early successes in one or two patients only to experience significant, sobering setbacks in larger-scale trials. This often at the very least dampens the media hype, but CAR T-cells have made consistent progress in garnering both considerable investments from pharmaceutical companies and strong results from clinical trials. Further promising results for the therapy were reported at the American Society of Hematology (ASH) conference this week for a host of blood cancers, including practically incurable multiple myeloma.

Blood cancers are often the experimental template for pioneering new cancer treatments, such as Gleevec for chronic myeloid leukemia, the first-ever FDA approved cancer therapy to target a specific protein found on cancer cells. Gleevec achieved spectacular clinical trial results before its approval in 2001 and went on to transform cancer medicine, changing a disease with a 30% five-year survival rate to one where over 80% of people survive for 10 years or more. This success is partly due to the ease of taking blood samples to monitor the effects of therapies compared to invasive biopsies and costly scans for solid tumor patients, but researchers are optimistic about the wider prospects of CAR T-cells.

“It’s an exciting time. Based on these results and recent FDA approvals in this field, there is reason to be confident that cell therapies, such as CAR T, may one day be the standard of care for hematologic malignancies as well as solid tumors,” said Reiner J. Brentjens, MD, Director of cellular therapeutics at Memorial Sloan Kettering Cancer Centre at the ASH meeting.

For tumors with currently dismal outcomes with conventional chemotherapy, this hopeful prediction can’t come true soon enough, and with almost 100 CAR T-cell clinical trials currently ongoing in the U.S. alone, including for pancreatic and brain cancers, options for patients with hard-to-treat cancers are increasing.

Many conventional chemotherapy agents kill cancer cells in a way which can crudely, but regrettably and truthfully, be described as carpet-bombing, indiscriminately affecting any cell which is dividing. CAR T-cells are the exact opposite, being engineered to target normally one very specific protein on whichever cells are in the crosshairs. In the case of many leukemias and lymphomas, this protein is CD19, present on B-cells, a type of white blood cell normally involved in the immune response when functioning correctly.

More specific therapies generally mean less toxicity for healthy tissues and fewer side-effects for patients. However, just as bacteria generate resistance to antibiotics, cancer cells are constantly evolving to evade the effects of chemotherapy. Many of the old chemotherapy drugs, for their many flaws, work in ways which make it difficult for cancer cells to evolve complete resistance as they affect processes key for survival such as DNA replication. However, the specificity of CAR T-cell therapies is, in this case, an Achilles heel. In one of the trials reported at ASH this week on refractory Non-Hodgkins Lymphoma, in a third of patients who relapsed after treatment, their cancer had evolved to simply not have the CD19 protein targeted by the CAR T-cells, rendering the therapy useless.

One of the current theories as to why this happens is that the CD19 negative cells may have been already present in the patient, just in tiny numbers. When the cells with CD19 were massacred by the CAR T-cell therapy, the cells without it no longer had any competition and thrived. So what is the solution? Make the therapy just a little bit less specific again. New studies are trialing CAR T-cells which go after two targets on B-cells, a protein named CD22 as well as CD19. It is hoped that the B-cells can’t survive if they lose both CD19 and CD22 and even if they evolve to lose one protein, they will still be susceptible to the therapy via the other.

Most CAR T-cell trials have currently been done in patients with few other options but the hope is that they will eventually be able to reduce, or even replace chemotherapy currently needed to achieve a cure, even in cancers with an excellent prognosis. For example, over 85% of children now survive leukemia long-term, but the cocktail of chemotherapies they receive come with considerable side effects, with many survivors experiencing serious health conditions later in life as a result of the treatment.

Although scientists are beginning to understand the short-term toxicities of CAR T-cells, their long-term side effects are largely an unknown and will remain so for several years. However, scientists are hopeful that CAR T-cell therapy will have fewer and less severe long-term side effects than conventional, old chemotherapies. A big ethical and moral question is how to justify replacing treatments which are undeniably very good at achieving the main goal of saving lives, with something which is currently less certain. For parents of children with leukemia who have failed conventional treatments already, the decision to try CAR T-cells is easy. For the first parents that consent to the inevitable chemotherapy-free CAR T-cell only trial, it will be a leap of faith. If all goes well, their children will be the first ever to survive leukemia without any chemotherapy treatment.

In May this year Emily, the first patient to get CAR T-cells celebrated the milestone of being five years cancer-free. Undoubtedly there are still numerous challenges to overcome before CAR T-cells become a mainstream therapy for multiple cancer types, but in five years from now, hundreds if not thousands of others will be joining Emily in this currently unique club.

The original article first appeared at https://www.forbes.com/sites/victoriaforster/2017/12/12/chemotherapy-free-cancer-treatments-move-closer-to-reality/?ss=pharma-healthcare#1486f28e6676

Dec
4
Sandeep Singh Dhillon
Brexit impact on UK pharma industry to be investigated – BBC News
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By Bill Wilson
Business reporter, BBC News

Brexit may affect the cost of medicines and hit UK pharmaceutical investment, a Commons committee head has warned.
Rachel Reeves, who chairs the Business, Energy and Industrial Strategy (BEIS) committee, says access to new medical products may also be at risk.
She said the uncertainty around Brexit was “very concerning”, as MPs prepare to examine its effects on the industry.
They include the sector’s access to highly skilled workers after the UK leaves the European Union.
Ms Reeves said the evidence MPs had received suggested Brexit could threaten “the cost of medicines, investment in the UK and access to new and innovative research and products”.
“There are serious concerns raised around the future regulation of pharmaceuticals, mutual recognition of medicines, and the prospect of damaging disruption to cross-EU drug supply chains,” she said.
“This is very concerning, with uncertainty risking the UK becoming a less desirable place for investment and development in a growing, productive industry.
“We are keen to examine the detail of these concerns and to hear from the industry what it wants from the government to ensure the smoothest possible transition as we leave the EU.”
Brexit will mean the relocation of the European Medicines Agency from London to Amsterdam.
The MPs’ inquiry comes despite the announcement last week of two big deals in the UK’s pharma sector.
The government said then that the decisions by MSD, known as Merck in North America, and Germany’s Qiagen illustrated confidence in its recently announced industrial strategy for when the UK leaves the EU.
The industrial strategy white paper outlines the government’s plans to support more research and development, encourage firms to embrace new technology and boost the economy.
A report in the Sunday Times said more major investment for the sector is due to be announced soon, with GlaxoSmithKline expected to reveal a new research partnership.
The Business committee has been seeking views from across the sector and has received written submissions from big pharmaceutical companies, trade unions, industry bodies and the government.
The submissions have been published ahead of a public evidence session on Tuesday when the committee will question witnesses from the industry on the impact of Brexit.
It will consider different outcomes relating to future cross-border customs and trading arrangements, and consider what the government should aim to achieve in negotiations.
Those appearing before the committee will include the Association of the British Pharmaceutical Industry (APBI) and Belgian-headquartered Janssen Pharmaceutical, part of US giant Johnson & Johnson.
The ABPI said the inquiry was important.
“The written evidence received by the committee highlights how regulatory cooperation, a frictionless system for trade and access to research funding, collaboration and talent, underpin the successful development and delivery of medicines,” a spokesperson said.
“Evidence also shows that 45 million packs of medicines go from Britain to the EU every month and 37 million come the other way. With this whole system at stake, clarity on medicines regulation and trade is urgently required for all patients across Europe.”

Full article at http://www.bbc.com/news/business-42213937

Nov
27
Sandeep Singh Dhillon
Roche Cancer Drug Rises To Challenge Merck, Bristol-Myers – Forbes
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By Matthew Herper

Tecentriq, a cancer immunotherapy developed by the Swiss drug giant Roche, slowed the progression of previously untreated lung cancer in a large clinical trial when combined with a chemotherapy regimen, the drug giant said.

“We are extremely encouraged by these results and will submit these data to health authorities globally with the goal of bringing a potential new standard of care for the initial treatment of lung cancer,” said Sandra Horning, MD, Roche’s Chief Medical Officer said in a press release

The news represents the latest upset among a class of new medicines that unlock the body’s ability to fight tumors. These medicines, called PD-1 inhibitors, are already big sellers for Bristol-Myers Squibb and Merck. In the third quarter of 2017, Bristol’s Opdivo generated $1.3 billion in sales; Merck’s Keytruda generated $1 billion. Financial analysts at Wall Street banks forecast that by 2022, these drugs will generate annual global sales of $25 billion a year, with the bulk of sales going to Bristol and Merck.

Merck has pulled ahead of Bristol, the pioneer in developing these drugs, because an early Merck trial in first-line lung cancer succeeded, while a similar study from Bristol failed, baffling investors and researchers. Keytruda is approved in advanced non-small lung cancer in patients whose tumors express a protein called PD-L1 above a certain level, or in combination with the chemotherapy drugs Alimta and carboplatin. Today’s Roche result complicates things further, because Roche used a different combination of drugs

Roche’s study had three arms. All patients received carboplatin and paclitaxel, the cancer drug once sold as Taxol. The control group also received Avastin, one of Roche’s best-selling cancer drugs. Then two groups got Tecentriq, one with Avastin and one without. What Roche has announced today is that the Avastin-Tecentriq-chemotherapy combination did better than Avastin and chemotherapy alone, and that the survival results so far are “encouraging.” That leaves a big question: how are the patients who got Tecentriq, but not Avastin, doing?

It’s impossible to know exactly what this will mean until the full results of the study are presented. (Companies release early results by press release because they are considered too important to investors to keep secret.) In morning trading, Roche shares are up as much as 5.6%, and Merck shares are down 2%. But two analysts, Umer Raffat of Evercore/ISI and Timothy Anderson at Bernstein Research. commented that the results could actually be seen as a validation of the general Merck approach of combining PD-1 drugs with chemotherapy. Rivals, including Bristol and AstraZeneca, have favored combining them with another type of immunotherapy drug, called a CTLA4 inhibitor, such as Bristol’s Yervoy.

One big question will be how the chemotherapy regimens stack up against the CTLA4 combinations. Another will be how they stack up against each other. How will doctors compare the Merck and Roche drug regimens? How will insurance companies decide which ones to cover? Anderson, the Bernstein analyst, said that investors are likely to not view Roche as a big threat because it is entering the market late. But he also wrote that the trial is “one important piece of a complex, still largely incomplete, puzzle.” Bernstein forecasts 2022 Tecentriq sales of $3.7 billion, less than half as much as for Opdivo or Keytruda.

Nov
24
Sandeep Singh Dhillon
Teva Pharmaceutical Set for Major Layoffs in Israel, U.S. – Reuters
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Teva Pharmaceutical is expected to cut up to a quarter of its 6,860-strong workforce in Israel, and a few thousand more staff in the United States, media reported Thursday, though a minister said the figures may not be accurate.

The world’s largest generic drugmaker will send termination letters to “tens of percent” of its 10,000 employees in the United States in coming weeks, Israeli financial news website Calcalist said, citing people familiar with the matter.

The debt-laden company’s stock closed up 4.6 percent in Tel Aviv on the report. A spokesman for Teva, which was seen as one of Israel’s great corporate success stories, declined to comment.

Teva had been widely expected to cut costs after warning this month it would miss 2017 profit forecasts due to falling prices of generics in the U.S. and weakening sales of its multiple sclerosis drug Copaxone.

Teva has also been saddled with nearly $35 billion in debt due to its $40.5-billion acquisition of Allergan’s generic drug business Actavis last year. Investors have been pushing for clarity on its future.

Teva has already been selling off assets to help meet its debt payments.

Teva’s new Chief Executive Kare Schultz was working out the details of the job cuts with regional management in Israel and the United States, Calcalist reported.

It said between 20-25 percent of the staff in Israel could go, including Michael Hayden, Teva’s chief scientific officer and president of research and development.

Israeli Economy Minister Eli Cohen told Reuters he had spoken with officials at Teva and was told that the numbers leaked to the media were off.

“I spoke to them this morning, they said the figures are not accurate,” Cohen said.

The Histadrut labour federation said it would not accept any unilateral moves by Teva’s management.

“Any efficiency measures, if and when they arise, will be done through negotiations and with the agreement of the Histadrut and the labour unions,” Histadrut spokesman Yaniv Levi said. “Lay-offs are the last resort.”

Fitch Ratings downgraded Teva’s debt to junk this month. (Editing by Andrew Heavens)

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Oct
23
Sandeep Singh Dhillon
Amazon Is About To Disrupt The Drug Industry, But Not The Way Most Think – Forbes
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By Steve Brozak, CONTRIBUTOR

It’s now a foregone conclusion that Amazon.com will enter the healthcare sector. Every day there is another article on how Amazon is planning to dominate some new corner of the American economy. One day Amazon is taking down Grainger and Home Depot. The next it’s single-handedly taking down not only FedEx, but also UPS and the United States Postal Service. No sector seems safe as Amazon sails its ship into new waters. But those expecting Amazon to cannon ball into healthcare may need to bide their time.

Two years ago I wrote in Forbes about how Amazon’s entry into healthcare could decimate CVS and Walgreens. I think it’s still possible, but not in the way the markets and media are anticipating today. Amazon’s entry into healthcare will not be sudden. It is likely to be similar to the acquisition of Whole Foods which developed over years as Amazon evolved its strategy in home grocery delivery, one part of the incredibly valuable consumables market. It was accomplished through trial, error and recognition that Amazon needed a bricks and mortar approach to the segment that led to the Whole Foods acquisition. Sudden and complete immersion into the healthcare system as it currently exists could taint the Amazon brand and will make the company vulnerable to regulatory risk. But there are segments of the healthcare market that offer an opportunity for Amazon’s unique capabilities, and there is evidence that Amazon has been making those slow and steady moves toward healthcare.

Becoming A PBM Could Be Amazon’s Healthcare Market Entry

Pharmacy Benefit Managers are the gate-keeping middlemen of the healthcare system. PBMs administer health plans for insurance companies and employers. They manage benefits and treatment costs for these organizations. The more organizations a PBM services, the greater number of patients (or lives, in insurance lingo) under its umbrella. With more lives comes more leverage when a PBM negotiates with pharmaceutical manufacturers for drug prices.

The three largest PBMs are Express Scripts, CVS and OptumRx, covering more than 80% of insured Americans. A PBM that manages tens of millions of lives has greater purchasing and negotiating power than a standalone company with 3,000 employees, or a pension plan with 20,000 lives, or even an independent insurance plan with just a few million lives. Among a slew of other services, PBMs primarily work with their clients to construct and administer a pharmacy benefit program, which is often referred to as a drug formulary. Formularies are just the lists of drugs that are approved or that have preferred pricing for the insurance company through a PBM’s negotiations with the drug’s maker. In exchange for placing its drug on formulary, a PBM receives a preferred price and a cash rebate from the drug’s manufacturer for every prescription it processes. Your insurance plan’s formulary is a major reason why your doctor prescribes you one drug company’s medicine over a competitor’s. Being the preferred drug is the goal. PBMs share a portion of the rebate it receives with their clients (the health plans) and patients receive the benefit of a drug at a preferred price. PBMs also collect fees for transactions and services it processes for its clients.

Target and Walmart learned that merely selling pharmacies in their bricks and mortar operations or through the mail doesn’t equal profits, although a case can be made that it certainly increases foot traffic and store loyalty. Margins are incredibly thin for the kinds of drugs they sell most routinely. In fact, Target sold its in-store pharmacy business to CVS, a pharmacy and a PBM, and Walmart has partnered with McKesson to source its drugs. Becoming a full service PBM would have allowed Target and Walmart to have greater control over margin, but it wasn’t in the cards for either company. While becoming a PBM could be the key to unlocking profits for Amazon, the current political and social environment is unfriendly toward PBMs and drug makers and comes with its own risks.

Despite this, a gamble in healthcare has to happen sooner rather than later. Amazon’s primary customer is between 30 and 45 years old, and that’s a demographic that will soon be looking to fill more and more prescriptions. And if you don’t think their customers’ life cycle milestones are part of retailers’ strategic plans, just look at the pace of acquisitions around baby startups just under a decade ago. Amazon bought diapers.com while Bed Bath & Beyond acquired Buy Buy Baby. Finding an algorithm that figures out when you’re going to have a child before you even think of having one yourself is the holy grail of E-commerce. The birth of a child is a significant milestone around which there is a burst of spending to capture. Likewise, as its consumers age and continue to change their habits through online shopping, healthcare has become the next frontier. Amazon has already made an entry and is setting prices for over the counter medications (OTC). On average, its OTC products, like Tylenol, are cheaper on its website than most bricks and mortar stores. There are several theories circulating around Amazon’s entry into healthcare. Here are my thoughts on three of the most common scenarios being discussed.

Scenario 1: Amazon Acquires Or Partners With A Large PBM

One of the more popular scenarios bandied about is that Amazon may acquire a large PBM player. This is unlikely for a few reasons. Foremost, while it would allow Amazon to quickly enter the healthcare market, integrating the processes and services from a large operation into Amazon would be complicated and chaotic. As the drug pricing debate continues in the mainstream, PBMs have been painted with a big target on their backs as more light is thrown on their opaque and very misunderstood segment of the healthcare system. Just this week, Senator Lamar Alexander (R-TN) wondered out loud why PBMs even need rebates, which is the lifeblood of the industry.

It will be very difficult to recreate the frustration-free consumer experience Amazon currently offers and replicate it through healthcare services as healthcare currently exists. Therefore Amazon will want to separate any healthcare services it offers from its main brand and ease into the business. You could argue that Amazon is already easing in by selling prescription drugs on their Japanese website, perhaps a test case for an American entry (supporting the case for Scenario 3). If you think Amazon can do no wrong, remember this is the company that thought it would be a good idea to emblazon Amazon.com on the back of its Fire Phone, a complete flop. Amazon can’t afford a flameout in healthcare, and making another transformative purchase that could easily eclipse the purchase of Whole Foods so soon, while entirely possible for a company the size of Amazon, would be wholly inadvisable.

As far as partnering goes, sure, Amazon could attempt to partner with a Prime Therapeutics or an Express Scripts. As others have pointed out, Amazon has a strong history of partnering with companies, leveraging its consumer reach and logistical magic to tap into and offer lifelines to companies like Circuit City and Toys R Us. But then what happened? The companies Amazon partners with tend to go out of business as Amazon upends the market.

Scenario 2: Amazon Re-engineers The Wheel With A Smaller PBM

It’s clear that Amazon needs to either re-engineer the PBM wheel or partner with a creative player who already is. While a partnership with a conventional middle market PBM will give Amazon a good entry point in healthcare, a better route would be to partner with an even smaller PBM to really learn the business, gain valuable insights on the industry and bring the PBM model into the 21st century. There are already reports that Amazon, with its 350,000 employees, is trying to administer its own health plan internally as its own PBM. While hiring executives from industry to construct its own virtual PBM is a good way for Amazon to start, it’s still just virtual. An even better path forward would be to acquire or partner with a smaller PBM that already manages millions of lives, self adjudicates (processes its own claims) and can easily manage an additional 350,000 Amazon employees. Through the smart acquisition of a creative PBM, Amazon would learn the business model and incorporate a PBM-like service into an expanding slate of healthcare programs and service offerings.

Scenario 3: Amazon Becomes A Bricks And Mortar Pharmacy In Order To Become A Mail Order Pharmacy

Amazon is well positioned to enter the mail order pharmacy business. Most mail order services are contracted out to a handful of other pharmacies that specialize in mail order delivery. For a while, insurance companies preferred their patients to enlist in a mail order pharmacy because the pricing was competitive compared to going to CVS or Rite Aid. Over the last several years that gap has narrowed. But mail delivery is what Amazon does very well, and combining a mail delivery strategy with a bricks and mortar strategy makes an incredible amount of sense for the company, especially now that it has acquired Whole Foods.

Before acquiring Whole Foods, it never made sense for Amazon to build or to acquire a network of independent pharmacies. Since none of the Whole Foods stores have a pharmacy, Amazon has an opportunity to establish in-store pharmacies that are powered by mail order fulfillment centers. A bricks and mortar strategy should be based around having an in store pharmacist fill as few prescriptions as possible. Rather, a regional prescription fulfillment center could fill and deliver the majority of prescriptions to both the store and to the patient’s doorstep. This is not unlike the current pharmacy model whereby local bricks and mortar pharmacists fill immediately needed prescriptions in the store, while chronically needed medications are filled and delivered to the store by a regional fulfillment center for monthly pickup by the patient. A model in which Amazon combines its mail delivery capabilities with its Whole Foods bricks and mortar would begin to draw two-way traffic from the stores and onto Amazon’s website. As patients sign up and manage their medications, they would create an essential link between the virtual and bricks and mortar Amazon. Shopping for eggs at Whole Foods isn’t going to compel me to go to Amazon.com no matter how many signs Whole Foods hangs in its stores to remind me that they’re now owned by Amazon. But managing my pick up/drop off of medications at my local Whole Foods through my Amazon health portal would draw me into both. Amazon seems to understand this and has already begun to blend its online business in Whole Foods by placing its innovative pick up/return locker system in Whole Foods lobbies.

Of course, while a current generation of Americans prefer to have the personal touch of interacting with and picking up their prescriptions, the trend will soon be to have most drugs delivered by mail. I have even evaluated companies that are working on fill-on-demand drug dispensing vending machines, which may also one day make their way into Whole Foods stores (let’s call them Locker 2.0). To date the one area of true weakness for mail order pharmacy services has been providing essential prescriptions immediately, say, on the day a patient is discharged from the hospital. That’s a weakness Amazon could easily topple with its tests of Prime Now, its same-day two-hour delivery service, another incremental step as Amazon inches toward the healthcare market.

Amazon’s customer base may be young, averaging 35 years old, but they are aging and in the midst of the child-rearing cycle, which requires frequent trips to the pharmacy. Amazon’s customers will need more prescriptions for themselves and for their children. Soon an entire generation will be even more used to buying things online. Right now Amazon has announced it is preparing to make two very big decisions public. The first is whether or not it will get into healthcare, to be announced, supposedly, sometime around Thanksgiving. The second is where it will locate its second world headquarters. If Amazon wants to capture as much of the purchasing a customer can do, it will need to mature with its consumers and formally enter into the healthcare market.

And as for my prediction for Amazon HQ2: It’s Boston.

Oct
2
Sandeep Singh Dhillon
Malaysia’s healthcare budget below WHO recommendation – The Malaysian Insight
Pharma News, Pharma Notables
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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 https://www.themalaysianinsight.com/s/16128/