December 15, 2015 | by Sarah Massey, M.Sc.
This year saw a number of big announcements and shake-ups in the pharmaceutical industry. As the 2015 calendar year draws to a close, the Xtalks Blog thought it would be a good idea to explore the top 5 pharmaceutical industry topics of the year, and make predictions on what people in the industry can expect for 2016.
Drug pricing has been a consistent tug-of-war between pharmaceutical companies – whose prerogative is to develop drugs that see blockbuster sales and pay dividends to stockholders – and patient groups – including government agencies, payers and ultimately patients who want effective treatments that come at a fair price. There was renewed interest in the subject this year due in part to a much talked-about price hike perpetrated by Turing Pharmaceuticals’ Martin Shkreli. The 5,000 percent price increase of the 1950s-era drug Daraprim sparked controversy throughout the US, causing presidential candidate Hillary Clinton to call for drug pricing reform.
“Price gouging like this in the specialty drug market is outrageous,” wrote Clinton in a tweet. “Patients who rely on this treatment should not have their health and lives put at risk because of an unnecessary anti-competitive market, and the FDA should act through all of its available authorities to remedy this situation as soon as feasible,” she later said in a letter to the US Food and Drug Administration (FDA).
Now the presidential candidate has released a series of TV ads featuring some of the specifics of her proposed drugs cost plan. She proposes a monthly limit of $250 for out-of-pocket expenses for prescription drugs, and promises to provide additional funding to the US Food and Drug Administration (FDA) to allow them to clear the backlog of generic drugs awaiting approval.
As the issue of the cost of pharmaceuticals is ongoing in the US – especially in the face of an upcoming US presidential election – it’s likely we’ll continue to see drug pricing issues in the news in 2016.
Megamergers and Tax Inversion
This year saw an unprecedented merger between US-based Pfizer and Ireland-based Allergan, worth a whopping $160 billion. Industry insiders single out tax savings for Pfizer as a driving force behind the deal; a process known as tax inversion.
According to estimates made by Pfizer, the company could save as much as 8 percent in tax money every year, after they move the company’s headquarters to Dublin. Of course, this represents a substantial chunk of tax dollars that the US government won’t be collecting, leading to the implementation of stricter laws that attempt to discourage companies from performing tax inversions.
Once again, Democratic presidential candidate Hillary Clinton has stepped into the debate, saying she has “deep concerns” about the impending merger between Pfizer and Allergan. “They’re doing it to save money on taxes,” said Clinton. “I want the Treasury Department to do everything it can to stop that kind of behavior and call it for what it is: gaming the tax system.”
Recently, Clinton proposed a number of new regulations aimed at discouraging companies from performing tax inversions. She suggested that the US government should use the might of the Treasury Department to penalize companies that engage in “earnings stripping” – another way to described the tax-savings motivations behind US companies’ relocation overseas.
According to a Michael Short, a spokesman for the Republican National Committee, “Hillary Clinton’s entire proposal is inverted because it does nothing to solve the underlying problem of our outdated and uncompetitive tax code.” While not untrue, Short’s criticism of Clinton’s proposal also represents political opposition.
Clinton also proposes a change to the regulations governing mergers whereby larger US corporations would be unable to evade taxation by the US government by simple acquiring smaller, foreign companies. She also recommends enforcement of an exit tax on companies trying to commit a tax inversion by requiring payment of the US levy on their normally untaxed foreign profits.
While the deal has been all but finalized, some investors are skeptical the deal will indeed go through. With only two weeks to go before year’s end, stakeholders may have to wait until 2016 to see if Pfizer and Allergan complete their merger.
The potential for immunotherapy to treat everything from allergies to cancer has made it a leading topic for 2015. A team of researchers in Montreal, Canada developed a ‘smart biogel’ this year, which is capable of delivering immunotherapy treatments directly into the tumor. The technique uses modified, patient-derived T-lymphocytes to target cancer cells and help the patient’s body mount an immune response against the tumor.
Researchers have even explored the benefits of immunotherapy for treating type 1 diabetes – an autoimmune disorder characterized by the body’s attack on insulin-secreting cells. Similar to the use of immunotherapy to treat cancer, this treatment uses immune cells – known as regulatory T cells or ‘Tregs’ – collected from the patient, that have been expanded before being reintroduced into the body, to increase their numbers.
Researchers developing the technique at the University of California, in association with Caladrius Pharmaceuticals, found that the cells were well-tolerated in the patients with type 1 diabetes, and were still present in the participants’ system a year after infusion. To date, the technique has only been tested for safety, however the results of the trial were successful enough to prompt Caladrius Pharmaceuticals to announce their intension to start planning a Phase II clinical trial testing the efficacy of the treatment.
Some of the world’s biggest drugmakers are jumping on the cancer immunotherapy bandwagon. Global healthcare company Roche, announced two back-to-back collaborations with immuno-oncology startups with promising technologies. The first deal announced was their $500 million partnership with SQZ Biotech, with the aim of harnessing the company’s ‘cell-squeezing’ technology allowing tumor-related antigens to be inserted into a patient’s cells.
Just a few days later, Roche announced another immune-oncology deal with Pieris Pharmaceuticals. The company’s Anticalin-based therapies – artificial proteins designed to target cancer cells – was the main attraction for Roche.
While over 100 years of research has led to these current advances in immunotherapy, the field is still undoubtedly in its infancy. We’re sure to hear a lot more about this field in the new year.
To the dismay of countless pharmaceutical and medical device developers around the world, the American Medical Association (AMA) called for a ban on all direct-to-consumer (DTC) advertising for these products this year. During the AMA’s Interim Meeting, the call the action was made, citing skyrocketing prescription drug costs as a direct result of the billions spent on advertising.
“Today’s vote in support of an advertising ban reflects concerns among physicians about the negative impact of commercially-driven promotions, and the role that marketing costs play in fueling escalating drug prices,” said AMA Board Chair-elect Dr. Patrice A. Harris. “Direct-to-consumer advertising also inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.”
The US and New Zealand are the only two countries in the world that still permit prescription drug manufacturers and medical device developers to sponsor DTC advertisements. Whether the government agencies will enact the ban is something we’ll have to stay tuned for in 2016.
Pharmaceutical Manufacturing in China
Pharmaceutical manufacturers in China have received a considerable amount of heat this year from the US Food and Drug Administration (FDA). Pharmaceutical giants – including Pfizer and GlaxoSmithKline – have experienced regulatory scrutiny from both US and European officials over the practices conducted at their China-based manufacturing facilities.
Pfizer received a Form 483 from the FDA in April, after a number of violations were identified at the company’s plant in Dalian, China. Employees kept two sets of records – one with the true results of quality testing and the other representing a polished version kept for inspections – and are believed to have used expired ingredients in manufacturing pharmaceuticals.
As the rest of the world relies heavily on China for medicines and base ingredient manufacturing, it’s more important than ever for regulators to ensure sites are compliant with Western standards. As such, since 2008 – the year a number of dialysis patients died from contaminated Chinese-made heparin – the FDA has increased their presence in the country.
Some inspections of Chinese plants have resulted in import bans into the US. In September, at least 15 of the pharmaceutical components made by Hisun – one of the largest Chinese manufacturers that supplies pharmaceutical companies including Pfizer-owned Hospira Inc., and Merck & Co. – were banned from being imported into the US, for unspecified violations.
While our reliance on China for drug and drug components manufacturing is unlikely to decrease in the future, the FDA has faced setbacks in sending more inspectors to the country, following the failure of the Chinese government to approve additional visa applications. As Chinese plants have a long way to come in order to be compliant with US regulations, it’s likely that this issue will continue on into the New Year.
What do you think about the top 5 pharmaceutical industry topics of 2015? Have we missed any? Share your thoughts in the comments section below!
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Keywords: Drug Pricing, Merger, Immunotherapy, Pharmaceutical Manufacturing, China, Direct-To-Consumer
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