Stephanie Sutton was an assistant editor at Pharmaceutical Technology Europe.

Stephanie Sutton

GlaxoSmithKline (GSK) has come to a tentative agreement with the US government to conclude ongoing investigations relating to sales and marketing practices. The settlement is still subject to negotiation, but GSK expects to pay around $3 billion, which is covered by existing legal provisions, according to a 

. The final amount and terms of the settlement are expected to be finalized in 2012. GSK says that the payments will be funded through existing cash resources. 

The settlement addresses civil and criminal liabilities, and covers:

Investigations into GSK’s sales and marketing practices, which were initiated by the US Attorney’s Office in Colorado in 2004, but later taken over by the Massachusetts Office. 

The US Department of Justice’s investigation of possible inappropriate use of the nominal price exception under the Medicaid Rebate Program.

The Department of Justice’s investigation of the development and marketing of Avandia.

GSK’s CEO, Andrew Witty, said in the statement, “This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today. In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the US to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.”

GSK explained that since 2008, it has established a new framework for compliance in the US, which is supported by staff training programs that require certification by employees. In addition, the company has introduced a new incentive compensation system for sales representatives who work directly with healthcare professionals. Instead of using sales targets as a basis for bonuses, the new system bases incentives on the quality of service that representatives deliver to support improved patient health.

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GlaxoSmithKline has come to a tentative agreement with the US government to conclude ongoing investigations relating to sales and marketing practices. The settlement is still subject to negotiation, but GSK expects to pay around $3 billion, which is covered by existing legal provisions. The final amount and terms of the settlement are expected to be finalized in 2012.

GlaxoSmithKline Agrees in Principle to $3-Billion Settlement with the US Government

The European Commission has launched an antitrust investigation to examine whether contracts between Johnson & Johnson (J&J) and Novartis were designed to delay the market entry of generic versions of Fentanyl in the Netherlands. Fentanyl, developed by J&J, is a strong painkiller for chronic pain. Novartis’ Sandoz unit markets a generic version of the drug in certain markets where Fentanyl’s patents have expired. 

, the EC will deal with the case “as a matter of priority.” 

“I regard this sector as a priority in terms of enforcement of competition rules given its importance for consumers and for governments’ finances,” Joaquín Almunia, vice-president of the commission in charge of competition policy, said in a press statement. “Pharmaceutical companies are already rewarded for their innovation efforts by the patents they are granted. Paying a competitor to stay out of the market is a restriction of competition that the Commission will not tolerate.”

Although no press statements have, at the time of going to print, been released by J&J and Novartis, a third-party 

 from Reuters claims that J&J has said the investigation focuses on contractual arrangements with Hexal/Sandoz (Hexal was acquired by Novartis and integrated into its Sandoz unit in 2005) concerning Fentanyl patches in the Netherlands during the period 2005–2006. A 

 from the Wall Street Journal also claimed that a J&J spokesperson had said that J&J had a contractual agreement with Sandoz in 2005 and 2006 with regards to Fentanyl patches in the Netherlands. Both reports said that Novartis declined to comment.

According to the EC statement, the Commission is keeping a close eye on business practices in the pharmaceutical industry. The increased scrutiny follows a previous sector inquiry (2008–2009) that concluded that originator drug companies may be paying to delay the market entry of generic medicines. The main finding of the inquiry was that competition does not work as well as it should, and that there has been both a decline in innovation and delay in the introduction of generic medicines. 

Since the inquiry finished in 2009, the EC has launched antitrust cases against several pharmaceutical companies, including Servier, Lundbeck, and Cephalon, which was recently acquired by Teva Pharmaceutical Industries, for possible violations of the EU’s competition rules.

Servier Under EC Scrutiny for Anticompetitive Behavior

EC Final Report Condemns Industry Malpractice

The European Commission has launched an antitrust investigation to examine whether contracts between Johnson & Johnson and Novartis were designed to delay the market entry of generic versions of Fentanyl in the Netherlands.

EC Probes J&J and Novartis

Switzerland’s Acino Pharma agreed to buy Cephalon’s combined Middle East and African business in a transaction worth approximately EUR 80 million ($110 million). Acino will pay EUR 60 million ($82.5 million) in cash, and an additional EUR 20 million ($27.5 million) will come through shares.

The acquired business includes both Cephalon and Mepha (a Swiss subsidiary of Cephalon) brands and is expected to generate sales of almost EUR 100 million ($137.4 million) in 2011. The product portfolio comprises the analgesic Olfen (diclofenac), the antispasmotic Spasfon (phloroglucinol–trimethylphloroglucinol), the gastrointestinal drug Gasec (omeprazole), and the antibiotic Mesporin (ceftriaxone).

The transaction will enable the company to make a “quantum leap” toward establishing its own presence in the emerging markets, according to a 

 from Acino. “Over the last 18 months, Acino’s management has refined its growth strategy to focus on three complementary business pillars: selling the products it develops through its partners in the developed markets, establishing its own market presence under its Acino Switzerland brand in emerging markets, and entering into development programs with innovative pharmaceutical companies based on its expertise in drug-delivery technology,” explained the Acino statement.

In related news, Cephlon has been acquired by Israel’s Teva Pharmaceutical Industries for approximately $6.8 billion. The deal was 

 in May 2011, and received approval from EU authorities and US regulators 

. The approval from the European Commission, however, is conditional upon the divestment of Cephalon’s generic version of its Provigil drug.

Switzerland's Acino Pharma has agreed to buy Cephalon's combined Middle East and African business in a transaction worth approximately EUR 80 million ($110 million). Acino will pay 60 million Euro ($82.5 million) in cash and an additional EUR 20 million ($27.5 million) will come through shares.

Acino Acquires Cephalon's Middle East and African Business

AstraZeneca will invest $200 million in a new manufacturing facility in China that will produce both intravenous and solid medicines. The facility will be located in China Medical City (CMC) in Taizhou (Jiangsu province) and construction is due to finish at the end of 2013.

, the facility will help the company to meet China’s growing demand for its products. In addition, the investment will help AstraZeneca to expand the availability of its medicines to people in both urban and rural communities who traditionally have had limited access to established medicines.

“AstraZeneca has been putting down deep and broad roots in China for many years,” said Mark Mallon, President of AstraZeneca China, in the statement. “Our new manufacturing facility will complement our efforts to meet the medical needs of Chinese patients with medicines that are locally produced. In particular, it will help us to reach out to more of the estimated 900 million people in urban and rural communities who have had less access to high quality medicines.”

China is an important market for AstraZeneca. The company first established its presence in the country in 1993 and in 2010 had a turnover in excess of $1 billion. Its facilities in China include a manufacturing and supply site in Wuxi New District, the Innovation Centre China, which is a translational science centre targeting biomarker research into cancer therapies, and an extensive network of collaborations with academic and medical institutions. In addition, AstraZeneca has an established sales and marketing operation as well as large-scale clinical development capabilities. 

According to the press statement, China’s pharmaceutical market grew from $10 billion in 2004 to $41 billion in 2010 and is expected to grow to more than $100 billion by 2015 as the government invests in improving healthcare infrastructure and expanding insurance coverage.

AstraZeneca to build $200-million facility in China

The European Commission (EC) has adopted revised proposals clarifying the information that industry can supply to the public on prescription-only medicines, while maintaining a strict ban on direct-to-consumer advertising.

Only certain information will be allowed to be communicated, including information on the label and packaging leaflets, pricing information, instructions for use, and information on clinical trials. Channels of communication will also be strictly limited to media such as officially registered internet websites and printed information made available when specifically requested by members of the public. Dissemination in general print media, radio and television will not be permitted.

In addition, the information will have to fulfill certain quality criteria. The information must be unbiased, evidence based and factually correct, understandable, and must meet the needs and expectations of patients.  Information that has not previously been approved will need to be verified by competent authorities prior to dissemination. 

, John Dalli, European commissioner for health and consumer policy, said: "The revised proposals put rights, interests and safety of patients first. They oblige industry to provide certain key information to patients and set clear rules for additional, voluntary information on prescription medicines. In addition, they further strengthen the control of authorized medicines."

The EC’s first proposal was released in 2008 as part of the ‘

 during a vote in 2010 of MEPs of the European Parliament’s Health Committee. According to a 

 of the European Public Health Alliance (EPHA), the previous proposal was “just a disguised way of giving pharmaceutical companies enough flexibility to promote their products directly to the public, in order to boost the sector’s growth.”

However, the latest proposal seems to have alleviated this concern as it has been welcomed by EPHA and the 

European Federation of Pharmaceutical Industries and Associations

“EPHA welcomes the new tone of the proposal which has taken the public health perspective on board. We congratulate Commissioner Dalli for producing a revised version of the proposal,” said Monika Kosinska, secretary general of EPHA, in the EPHA statement.

According to a statement from the EC, patients are taking increased interest in the medicines they take and want more of a say in how they are treated. “At the same time, patients are confronted with a growing volume of information from various sources and often find it difficult to identify reliable information about medicines,” said the statement. “The increased use of the internet over recent years makes the need for clarity even more important. Online information on medicines must be accurate and reliable.”

The European Commission has adopted revised proposals clarifying the information that industry can supply to the public on prescription-only medicines, while maintaining a strict ban on direct-to-consumer advertising.

DTC Advertising Ban Maintained in Europe

Takeda Pharmaceutical Company (Japan) has completed its acquisition of Switzerland’s Nycomed for EUR 9.6 billion ($12.9 billion) on a cash-free, debt-free basis. In addition, Takeda has named Frank Morich, Takeda’s executive vice-president of internal operations (Americas/Europe), as Nycomed’s CEO. Morich will take on the role of CEO in addition to his current role.

“I look forward to bringing Takeda and Nycomed together to ensure we can achieve enhanced revenue, growth, and diversification, while maintaining the strong momentum of both companies,” said Morich in a 

. “The combined company significantly broadens our coverage of the global pharmaceutical market to more than 70 countries, increasing our global Rx sales ranking to 12th and further strengthening our position in the industry.”

According to the press statement, the transaction fits with Takeda’s sustainable growth strategy, which the company outlines in its 2011–2013 Mid-Range Plan (MRP). Takeda has a presence in the Japanese and US markets, while Nycomed has infrastructure in both Europe and the emerging markets, which Takeda believes will enhance its development expertise and commercialization capability. The acquisition will also provide Takeda with an immediate cash boost generated from Nycomed’s annual revenue of more than EUR 2.8 billion ($3.7 billion) and enhance the JPY 1260 billion ($16.4 billion) of projected FY 2013 sales in the MRP by more than 30%.

“The combination of both organizations will strengthen Takeda’s performance during the 2011–2013 MRP period, and enable us to sustain medium and long-term growth targets starting in fiscal 2015 and extending into the next decade,” Yasuchika Hasegawa, president and CEO of Takeda, said in the statement.

The combined company will have a commercial presence in metabolic diseases, gastroenterology, oncology, cardiovascular health, central nervous system diseases, inflammatory, and immune disorders, respiratory diseases and pain management areas, as well as a presence in Japan, North America, Europe, and the emerging markets.

 in May 2011, and the transaction was unanimously approved by each company’s board of directors.

Takeda Pharmaceutical Company has completed its acquisition of Nycomed for EUR 9.6 billion ($12.9 billion) on a cash-free, debt-free basis. In addition, Takeda has named Frank Morich, Takeda's executive vice-president of internal operations (Americas/Europe), as Nycomed's CEO.