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The US Food and Drug Administration finally released portions of the long-awaited guidance documents that will help to implement the development and approval of biosimilar molecules under the Biologics Price Competition and Innovation Act of 2009 (BPCIA)

Yesterday the agency issued three guidance documents which represent only a small portion of the total guidance package that will be necessary to develop and commercialize biosimilar products in the US

They are:

Scientific Considerations in Demonstrating Biosimilarity to a Reference Product

http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM291128.pdf

Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM273001.pdf

Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product

http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM291134.pdf

For a more detailed analysis of the guidance documents please check out a post by James N. Czaban. According to Czaban (and many other in the biosimilar space) these first three guidance documents represent “baby steps” towards implementing the specifics of BPCIA. To that point, Czaban suggests that:

“These Guidances, while helpful in expressing some of the FDA's general approaches, but will be of limited specific value with respect to any particular product”

Stay tuned for more updates.

Until next time...

Good Luck and Good Job Hunting!!!!!!

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Sandoz, the generics division of Novartis, is currently the world leader in the biosimilar market. In fact, if it was not for Sandoz, the biosimilar industry may never have gotten started in the first place! As some of you may know, Sandoz sued FDA (and won) to gain approval of its biosimilar human growth hormone. While FDA contends that Omnitrope is not really a biosimilar (it was approved as a “drug” rather than a biologic) most analysts agree that it was the first biosimilar product ever approved and sold in the US. 

As part of its global biosimilar strategy, Sandoz today announced that it had initiated Phase III clinical trails for US approval of biosimilar version of recombinant human granulocyte-colony stimulating factor(G-CSF) or filgrastim (Amgen’s Neupogen®) and another for global launch of PEG-filgrastim (Amgen’s Neulasta®); a PEGylated form of G-CSF.

The filgrastim study is designed to evaluate the efficacy and safety of Sandoz's biosimilar filgrastim versus Neupogen® in breast cancer patients eligible for myelosuppressive chemotherapy treatment. These trials expected to support extension of commercialization to the US, the largest global market for biologics. The pegfilgrastim study, which is being conducted in breast cancer patients undergoing myelosuppressive chemotherapy treatment, represents the next major step in the Sandoz global biosimilar development program. Previously, Sandoz announced that it had initiated late stage clinical trials for a biosimilar version of Roche’s monoclonal antibody cancer treatment Rituxan®). Finally, Sandoz has eight to ten different biosimilar molecules at various stages of development in its pipeline.

Sandoz currently markets and sells three biosimilars: filgrastim (Zario®), somatropin (Omnitrope®) and epoetin alfa (Binocrit®) in countries across Europe and elsewhere. As mentioned above Omnitrope is also sold in the US. However, because FDA has yet to craft a regulatory approval pathway for biosimilars (despite legislation mandating their approval) it is illegal to sell biosimilars (with the exception of Omnitrope) in the US.

Once vilified and staunchly opposed by most major pharmaceutical and biotechnology companies, the biosimilar business has been picking up steam in the past few years. To that end, companies like Merck, Pfizer, Teva and more recently Amgen and Biogen (all of whom lobbied against an approval pathway for biosimilars in the US) announced plans to compete on the global biosimilar market.

The decision of these companies to enter the biosimilar market is largely a result of downward pricing pressures on pharmaceutical and biotechnology drugs and near-empty drug pipelines at most major life sciences companies. Nevertheless, it is still not clear whether or not a robust biosimilar market truly exists. To wit, biosimilars have been in the market in the EU for the past fiver years and have not gained much traction there. However, the real biosimilar markets probably exist in China, Brazil and other emerging countries where there are large populations and emerging middle classes but drug prices are under tight government regulation. Because of this, the uptake of biosimilars in these markets will likely be greater than in Europe and the US.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!!!!!!

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Asia’s largest drug maker, Takeda, today announced that it will eliminate 2,800 jobs or about 9% of its workforce in the US and Europe. The job cuts, planned over the next four years, are intended to better integrate NycoMed, the Swiss company purchased by Takeda for $12 billion last September.

Most of the positions affected by the downsizing are in the US and Europe and will help the company save $1.7 billion over the next year or so.The plan includes the elimination of 2,100 jobs mainly in Europe and 700 in the U.S. across research, commercial, operations and administrative functions. Takeda currently has about 30,000 employees worldwide with operations in 42 countries.

The reason for the downsizing is slumping US sales of the company’s top selling drug Actos (diabetes) that will lose patent protection this August and face stiff generic competition. Like other pharmaceutical companies, Takeda is abandoning the US and European markets in favor emerging markets in China, India, Brazil and the Middle East.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

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Much has been written about the emerging markets in China. While there are likely thousands of business article and white papers on China’s economic expansion, I was unable to find a single source that provided me with some vital economic and social statistics to explain China’s rise as an economic power; that is until I received OnWisconsin, a quarterly publication from my alma mater the University of Wisconsin-Madison.

An article entitled “Delicate Balance” by Jenny Price ’96 provided me with a plethora of data that cogently and expertly explained the Chinese ascendancy as an economic power. Not surprisingly, the data offered by Price was compared with economic, social and business data from the US. Some of the information was startling to say the least (bold italics); so here goes:

Urban Population

United States 82%

China 47%

Median Age

United States 36.9 years

China 35.5

Total Fertility Rate

United States 2.06 children born per woman

China 1.54 children born per woman

Infant Mortality Rate (death per 1,000 live births)

United States 6.06

China 16.06

Net Migration Rate

United States 4.18 migrants/1,000 population

China -0.33 migrants/1000 population

Largest City

United States New York/Newark 19.3 million

Shanghai 16.6 million

Imports/Exports

United States $1.903 trillion/$1.27 trillion

China $1.307 trillion/$1.506 trillion

Gross Domestic Product (GDP) by Sector

Agriculture

United States 1.2%

China 9.6%

Industry

United States 22.2%

China 46.8%

Services

United States 76.7%

China 43.6%

External Debt

United States $13.98 trillion

China $406.6 billion

Public Debt

United States 58.9% of GDP

China 17.5 % of GDP

Budget Revenues/Expenditures

United States $2.092 trillion/$3.397 trillion

China $1.149 trillion/$1.27 trillion

Population (2011 estimate)

United States 313,232,044

China 1,336,718,015

Literacy (ages 15 or older or can read and write)

United States 99%

China, 91.6%

Life Expectancy at Birth

United States 78.37 years

China 74.68 years

After reviewing the data, it became much more apparent to me as to why so many companies, most notably pharmaceutical and biotechnology companies, are investing heavily in the Chinese market. Financial analysts predict that the Chinese pharmaceutical market will surpass the US (currently the world’s largest) by the end of the decade. That said, I think it may be time for the American public to learn more about China. Learning as much as possible about the competition is essential if you want to stay in the game.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!!

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The Pharmalot blog today reported that pharma and biotech downsizing, restructuring and outsourcing have resulted in 38 manufacturing facilities in 2011. While this may not sound like a lot given the ongoing tough economy, the post reports that 65 facilities were closed in 2010. According to some estimates, these closures have resulted in the loss of roughly 18,000 life sciences manufacturing jobs in the past two years. Sadly, pharmaceutical manufacturing, like almost all other manufacturing jobs in the US are being lost at an unprecedented rate. Further, many of these manufacturing jobs are being outsourced to multinational CMOs or to manufacturing facilities being built by pharma companies in emerging markets like Latin America, Eastern Europe and Asia.

Not surprisingly, most of the 2011 closures were in the Northeast (8) resulting in the loss of roughly 1,400 jobs. And, not surprisingly again, one of the hardest hit states was New Jersey; home to almost all of the major pharmaceutical companies in the world. The next region that was hit hard is the Mid-Atlantic (7) with notable closures in Maryland (Shire Pharmaceuticals) and North Carolina (DSM Pharmaceutical Products).

Interestingly, while plant closures are on the rise, there is new manufacturing facility construction that may help to offset the losses. However, unlike the past, many of the new facilities are being financed by academic institutions and not-for-profits rather than life sciences companies. According to the post, roughly 106 new North American (not only the US) are underway and represent an investment value of $4.3 billion. The new Shire facility being constructed in Lexington, MA and the International Vaccine Center (InterVac) in Saskatoon, Saskatchewan were cited as examples.

Despite the constructions of several new manufacturing facilities in North America, it is obvious that most major life sciences companies are looking South and East for future pharmaceutical and biomanufacturing capabilities. The bottom line is that labor and the cost of goods are cheaper in these markets and in contrast with the past, there are skilled workforces in place to manufacture life sciences products according to American, European and Japanese Current Good Manufacturing Practices. 

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Merck today announced that it will establish an Asia Research and Development headquarters in Beijing, China as part of a $1.5 billion commitment the company made to invest in China over the next five years.

The new headquarters will be focused on new drug discovery and development. Merck’s Asian commercial operations (known as MSD outside of the US and Canada) are located in Shanghai, China and will remain a separate entity from the new R&D center in Beijing. In addition to these facilities, MSD possesses manufacturing capabilities at many other locations throughout China.

Merck joins a growing list of big pharma companies that are rapidly establishing R&D centers in China and other emerging markets. With this in mind, don’t expect US R&D jobs to return to the US anytime soon! Now, may be a good time for American students to reconsider an anticipated career in life sciences R&D. On the other hand, the future is bright for Chinese life sciences graduate students and postdocs who are training in the US.

While Horace Greeley may have gotten it right in his day, I think the saying “Go East young man/women” may be more apt for the 21^st century life sciences industry.

Until next time...

Good Luck and Good Job Hunting!!!!!!

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While Samsung is mostly know for flat screen televisions and other electronic appliances, one of South Korea’s largest companies has been quietly evaluating a play in the protein engineering and manufacturing space. For those of you who may not know, Korea possesses one of Asia’s most vibrant biotechnology industries. At present, there are over 600 Korean biotechnology companies in existence. In April 2011, Samsung created a business units called Samsung Biologics which specializes in biopharmaceutical manufacturing.

Today, Samsung formally announced that it would create a joint venture with America’s Biogen/Idec to develop market and manufacture biosimilar molecules. Under the terms of the agreement, Samsung will invest $255 million and garner a 85% stake in the venture which will be located in South Korea. Biogen/Idec will invest $45 million for a 15% stake in the joint venture. Samsung will take a leading role in developing and marketing the joint venture’s products whereas Biogen/Idec will contribute expertise in protein engineering and biomanufacturing. The joint venture will not develop biosimilar versions of Biogen/Idec’s proprietary, branded protein-based drugs which include Avonex (MS), Rituxan (oncology) and Tysabri (MS).

Biogen/IDEC is the first “big biotech” company to jump on the biosimilar train. The company joins Merck BioVentures and Sandoz (Novartis) as major players in the biosimilar marketplace. Teva, which began looking at biosimilars about eight years ago, is also widely believed to be a biosimilar player. While the financial fate of biosimilars is still uncertain in the US, these molecules are generally perceived as having a much higher financial upside in large emerging markets such as China, Korea, Brazil and Russia which are susceptible to government pricing controls.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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While China and India have gotten the most attention as emerging pharmaceutical markets, Latin American markets most notably Mexico and Brazil (okay, it is a South American country but it can be included in Latin America) have been quietly expanding as rapidly as the Indian and Chinese markets. To wit, Denmark-based, Novo Nordisk—the world’s largest insulin maker—recently announced that it will be beefing up its medical consultant (aka sales reps) presence in Latin America over the next two to three years. During this period, the company expects to increase its current headcount of 300 to 800 employees.

Novo currently holds a 50 percent share of the Latin American insulin market. The company currently generates annual sales in Latin America of approximately $360 million. But, its main rivals Sanofi Aventis and Eli Lilly & Co, which sell faster-acting insulins, are beginning to cut into Novo’s market share.  The solution: add more sales reps in the region. While this may be great news for Latin American sales reps, it is not good news for American sales reps. Unless, of course, these reps speak Spanish and are willing to relocate!

Until next time...

Good Luck and Good Job Hunting!!!!!!

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It seems that big pharma always waits for early Fall to announce pending job cuts. Novartis, Europe’s second largest pharmaceutical company, announced two days ago that it would eliminate 2,000 jobs mainly in the US and Switzerland but add new employees to operations in emerging markets like India and China. Novartis is just another addition to a growing list of big pharma companies that are slashing jobs in the US and Europe and hiring new employees in lower cost markets.

The announce cuts represent a 1 percent reduction in Novartis’ global workforce. The cuts will be implemented over the next three years and are predicted to save the company in excess of $200 million annually. 

According to a company spokesperson, Novartis will eliminate 1,100 jobs in Switzerland, with the balance in the U.S., Jimenez said. Some research will be moved to the U.S. from Switzerland, and reductions will be made in technical research and development, data management, clinical trial monitoring, drug safety and regulatory affairs. Novartis will add 700 positions in China and India in data management and trial monitoring.

As part of the reorganization and job cuts the company will close an over-the-counter drug manufacturing plant in Nyon, Switzerland and chemical production facilities in Basel and Torre, Italy.

The current cuts come after Novartis announced last November that it would eliminate 1400 U.S. sales jobs and more recently in March that it would reduce operations in the UK.

Although life science pundits recently suggested that job cuts in the pharmaceutical industry are slowing and may have hit rock bottom, it appears that the carnage is still taking place and will likely continue well into the future as more resources and monies are invested in emerging markets.

Until next time...

Good Luck and Good Job Hunting

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British pharmaceutical giant AstraZeneca today announced that it would invest $200 million into a new manufacturing facility located in China Medical City in Jiangsu province in Eastern China. This is the company’s largest global investment ever in a single manufacturing facility. The new plant which will be completed by 2013 will manufacture intravenous and oral solid drugs. 

AstraZeneca was one of the first Western pharmaceutical companies to establish a presence in China (1993) and has fast become one of the leading biopharmaceutical companies in the country doing about $1.0 billion in business annually. 

Many of Astra Zeneca’s competitors including Novartis, Roche, Merck & Co. and others have also recently made large investments into Chinese R&D and manufacturing facilities. If this doesn’t eliminate anyone’s doubt that pharma is shifting its focus from the West to emerging markets, I am not sure what will!!! While this shift may be bad news for American life scientist seeking employment, it is certainly welcome news for Chinese Nationals who received their life sciences training in the US and other Western nations.

Until next time...

Good Luck and Good Job Hunting (there are openings in China!!!!!!)

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The US is slipping and emerging markets are growing in competitiveness according to an annual list compiled by the World Economic Forum. Perhaps even more troubling is that the same group found that the US is lagging in the adoption of internet, computing and mobile communication technologies. After all, adopting of new technologies has been widely viewed as a means to improve competitiveness.

According to the report, the US, which topped the list in 2008, slid from number 4 last year to number 5. Surprisingly, for the third year in a row, Switzerland ranked first. The list is compiled by assessing 12 categories that include innovation, infrastructure and the world economy. The fact that many EU countries continue to improve in their ability to compete on a global scale, suggests that socialist-leaning governments may not be as bad as many free market US zealots would have you believe!

Singapore replaced Sweden for the number 2 position in this year’s list. Behind Sweden (no. 3), Finland was ranked fourth, and Germany was ranked sixth. Germany was followed by the Netherlands and Denmark. The UK was 10, France was 18^th and China moved up one place to 26 this year. Among other major Asian economies, Japan ranked ninth and Hong Kong 11^th. 

Among other major emerging economies, South Africa was 50^th, Brazil 53^rd, India 56^th and Russia 66^th.

The weaker performance of the US was attributed to economic vulnerabilities and low public trust in politicians and concerns about government inefficiency. The loss of US competitive coupled with fewer students opting for careers in science, technology, engineering and math (STEM) and poorer adoption rates of new technologies suggests that the US decline will continue.

Until next time...

Good Luck and Good Job Hunting!!!!

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A report in Bloomberg News today suggested that Eli Lilly & Co. Chief Executive Officer John Lechleiter, PhD told a technology conference today that unfavorable US permanent resident (green card) laws are to blame for declining US innovation in the life sciences. With this in mind, Lechleiter plans on calling for US immigration officials to issue more green cards and adopt a shorter and simpler process for highly skilled foreign nationals to gain permanent residence in the US. According to Dr. Lechleiter, one of only a handful of big pharma CEO who is also a PhD-trained scientist, current green card regulations are so-called job killers and force many talented foreign nationals to return to their native countries to work with firms that directly compete with American life sciences companies. Unlike most of his peers, Lechleiter has been very outspoken about the lack of US life sciences innovation.

While Lechleiter comments may have been appropriate five or more years ago, they are no longer germane to America’s waning innovation in the life sciences. There is little doubt that many bright and talented foreign nationals were denied permanent residency during the Bush era (2000 to 2008) because of stringent immigration policies and limits on the numbers of green cards allotted for persons from certain parts of the world; mainly China, India and the Middle East. This, in turn, forced many life scientists—many of whom desperately wanted permanent residency in the US—to return to their home countries to look for work and gainful employment.

As Lechleiter rightly asserts, these scientists found work with companies that began to directly compete with US life sciences. This phenomenon, coupled with the rapid assent of the middle class in many of these nations, made it possible to begin to conduct Western style research at a much lower costs in these countries. To that end, by 2007, most big pharma companies—many of whom had dwindling pipelines and monstrous overhead costs—realized that it would be more cost effective to outsource or move R&D to countries with emerging pharmaceutical and biotechnology markets and a well trained R&D workforce. And, for the past four years downsizing and outsourcing of R&D are exactly what have been taking place at many American big pharma and biotechnology companies.

In my opinion, the larger question that must be addressed, as far as US innovation in the life sciences is concerned is: why are so few Americans willing to pursue scientific careers? To wit, the main reason why so many foreign life scientists were educated and trained in the US over the past 20 years was because there weren’t enough American students to fill the incoming roster at most American graduate training programs. Put simply, America’s growing lack of innovation in the life sciences over the past decade can be directly attributed to far fewer Americans pursuing scientific careers and an increased reliance on foreign nationals—who were unable to stay in the US—to innovate! While changing US immigration laws may allow some foreign nationals to more easily remain in the US, there simply aren’t enough life sciences jobs left in the US to make it worth their while! In fact, the likelihood of them finding life sciences jobs in their home countries is now greater than it is in the US. In my opinion, the only way to restore American innovation in the life sciences is to convince American students that pursuing scientific careers is worthwhile and that the requisite training for industry jobs is available to them.

Interestingly, after leading with changes to US immigration laws, Lechleiter also suggested that America’s innovation problem could be solved by lowering US corporate tax rates and American companies should not be forced to pay taxes on oversea earnings. Also, he asserted that the US Food and Drug Administration (FDA) should stop putting off decisions or erring on the side of avoiding risk when considering new drug applications. 

This begs the questions, how do lower taxes, no overseas taxes and expedited drug approvals help to spur American innovation when most life sciences R&D is conducted outside of the US?

Until next time...

Good Luck and Good Innovating!!!!!!!!

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Over the past week or so there have been daily snippets on various media platforms about business deals and opportunities in the Indian and Chinese life sciences market. While it is not news that many life sciences companies are expanding operations into these markets, the growing frequency of news items about the “goings on” in both markets are noteworthy.

The first bit of news that started the Indian and Chinese life sciences news avalanche, was a note on May 29 that appeared on The Economic Times’ website that reported that New Delhi-based JB Chemical and Pharmaceuticals planned to double the size of its medical sales reps to 1,500 over the next two years to increase its penetration into rural Indian markets. The company had previously divested it over-the-counter consumer business in Russia and other Commonwealth Independent States (CIS; composed of countries from the former Soviet Union) to start up new divisions in gynecology and dental products.

The same day, another New Delhi-based drugmaker called Lupin that specializes in generic drugs, announced that it plans to launch 50 new products by FY12; twelve of which will be generic drugs launched in the US. Both bits of information suggest that new previously untapped commercial opportunities are rapidly beginning to emerge in India and that Indian drug makers are looking to compete in the US and Western European markets that were previously dominated by American, Western European and Japanese companies.

In other India-related pharmaceutical news, an article appeared on June 2 at the Online Pharma Times website that reported that Shlomo Yanai, CEO of the Israeli generic pharmaceutical giant Teva, had flown to India to discuss potential collaborations with pharmaceutical companies there. While most analysts do not think that an acquisition is likely—Teva agreed to buy US-based Cephalon in May for $6.8 billion and also paid $460 million to acquire a controlling stake in Japanese generics group Taiyo Pharmaceuticals—it signals a growing interest by foreign companies to do deals in India to establish a presence it that market.

Like the Indian market, the Chinese market is beginning to heat up. An article at Bloomberg.com published on June 1 reported that Novo Nordisk will boosts its investment in China to preserve its dominance in the diabetes market after rival Sanofi announced a new foray into the Chinese market.

According to a report issued last fall by the International Market Analysis Research and Consulting Group, the Chinese diabetes market is expected to grow from $642 million in 2009 to more that $2.8 billion in 2015. The reason for the increase is attributed to the trend of more people moving from rural areas to cities and changes in eating habits and lifestyles that are contributing to a growing Chinese obesity problem. At present the US Centers for Disease Control in Atlanta estimates that roughly 8.3 percent of the U.S. population and 6.6 percent of the global population has diabetes

Novo first entered the Chinese market about 15 years ago and in 2002 created a diabetes research center and in 2007, in association with the Chinese Academy of Sciences established a foundation to fight diabetes. This year, the company plans on expanding its insulin packaging plant in China becoming the world’s largest insulin packaging facility.

Likewise, in 2005 Sanofi created a diabetes clinic. Three years later is expanded the clinics operations, established a clinical trial center and entered into a partnership with the Shanghai Institutes for Biological Sciences to develop treatments for diabetes, cancer and neurological diseases.

On Jun 3, Pfizer, the world’s largest drugmaker (for now) announced that it plans to partner in a joint venture with China’s Zhejian Hisun Pharmaceutical Company to produce generic drugs for the emerging Chinese market. According to the post on Bloomberg.com

“Pfizer is looking for new sources of revenue before it loses U.S. patent protection in November for Lipitor, the cholesterol medication that was the world’s best-selling drug last year with $10.7 billion in sales. Off-patent medicines, including branded generics, are one of the fastest growing segments in the global pharmaceutical market, Pfizer and Hisun said in a joint press release.”

At present, Pfizer is the top drug company in China (by sales) followed by AstraZeneca and Sanofi according to information supplied by the prescription drug intelligence firm IMS. The size of the Chinese drug market is project to grow by 25 percent this year and rough 60% of the existing market is dominated by generic drugs.

Finally, Chinese pharmaceutical companies are also beginning to invest in the US market. Late last week, the Tianjin Tasly Pharmaceutical Group signed an agreement with the State of Maryland to invest $40 million to build a tradition Chinese medicine (TCM) facility to provide TCM training and information. According to a press release:

“Tasly Pharmaceutical is currently preparing materials for approval by America’s Food and Drug Administration and plans to sell compound danshen drip pills in US and European markets. The medicine’s primary ingredient is obtained from the salvia miltiorrhiza species and is used to treat cardiovascular and cerebrovascular diseases. Danshen is also known colloquially as red sage or Chinese sage.”

I think it is time to pay more attentions to the ebb and flow of the Indian and Chinese markets!

Until next time,

Good Luck and Good Job Hunting (try India and China)!!!!!!

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Not too long ago, the mere mention of the word “vaccine” caused most big pharma executives to break out into a cold sweat. Once derided as low margin products and potential market busters—once most populations are immunized the incidence of disease declines and the market begins to falter—vaccines, primarily pediatric ones, have made a huge comeback over the last five years. 

One of the main reasons for the resurgence of the vaccine industry, was passage of US legislation that better-defined the legal obligations of vaccine makers and inclusion in the legislation of provisions that cap the size of awards made to persons claiming injury after vaccination. Another factor that contributed to the growing popularity of vaccines was emergence of the middle class in vast and concomitant improves in the healthcare systems of emerging markets that include South America, Asia and Africa. Unlike the mature vaccine markets in the US, Europe and Japan (because of low birthrates), the Asian, Latin American and African markets are poised for explosive growth over the next two decades.

In a recent article entitled “Vaccines-The Sustainable Blockbuster Business” Frost and Sullivan’s Senior Healthcare Analyst Barath Shankar Subramanian provides some interesting and insightful factoids about the vaccine industry. They are:

Pediatric vaccines are leading adult vaccines and represent the fastest growing segment of the global vaccine market

Europe is the world’s leading vaccine producer with over 90% of total production

The top five vaccine manufacturers (all big pharma companies) produce more than four-fifths of global vaccine revenues while other manufacturers (approximately 40) account for only one-fifth.

The North American market accounts for over 50 percent of the total spend on vaccines

North America and Europe supply only 14 percent of the world’s vaccine demand; the rest is met by suppliers in developing markets

Government investment, not-for-profit spending and industry alliances/ partnerships, in addition to private R&D spending, are helping to drive the current resurgence of the global vaccine industry

At present, there no fewer than 80 new candidates in late stage clinical development. Further, almost 40 per cent of the new vaccine candidates are for indications that currently have no vaccines on the market.  Finally, improvements in vaccine delivery are helping to drive the improved uptake of vaccines. For example, aerosols, transdermal skin patches, oral drops and even pills—all designed to eliminate needles and improve patient compliance and overcome cold chain supply issues are currently being developed.

From a business perspective—as far as sustainable markets go—the pediatric segment of the vaccine market is a clear winner. Currently, the leading global causes of vaccine-preventable, deaths for children under five include: pneumococcal disease, rotavirus, measles, Hemophilus influenzae b (Hib) infections, pertussis and tetanus. To that end, it is likely that governments in emerging markets will continue to add existing and new vaccines to government-mandated immunization programs. This is almost certain to propel the vaccine market to new heights over the next 10 years or more.

Until next time...

Good Luck and Good Job Hunting (think biologics!)

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While R&D scientists and sales representatives continue to struggle to find jobs in the US at pharmaceutical and biotechnology companies, the competition is fierce to hire and retain pharma employees in emerging markets like China and India. Earlier this week, I posted a piece on big pharma’s continuing expansion of its R&D activities in Asia and the growing need for US-trained PhDs in this region. However, it appears that hiring and retaining pharma sales reps is a bigger problem in China and India for big pharma companies like GlaxoSmithKline (GSK), Sanofi-Aventis (SA) and Pfizer.

According to a recent article in Bloomberg News about 20 percent of GSK’s sales forces in both countries quits each year in favor of better offers from its rivals including Pfizer and SA. One GSK executive quipped “There’s a huge war for talent. It’s hard to do anything about. If you have a good person, they could find someone else willing to pay twice as much.” This is in marked contrast with the US where almost 100,000 pharma sales reps may have lost jobs over the past five years.

Emerging Asia Pacific markets accounted for roughly 17 percent of GSK’s sales in 2010 as compared with 18 percent for Pfizer and 30 percent for SA. Sales revenues for most major pharmaceutical companies declined in both the US and Europe last year. There is no question that big pharma is turning to emerging markets as a means to maintain and increase sales of drugs after patents expire and generic competition cuts into revenue. Sales in emerging markets are predicted to reach about $400 billion by 2020 which is equivalent to the current size of the US and the five biggest European markets combined!

By its own admission, GSK was “fairly late” in their investments in China and may explain why the company may be experiencing trouble with competing for talent in that market. Employment opportunities in emerging markets will likely resemble those in the late 1990s in the US and Europe, when there was a dearth of talents life sciences professionals and companies were willing to pay large salaries (regardless of whether or not job candidates were qualified) to employees to maintain operations. This trend is driving up labor costs in China and interestingly, China is beginning to outsource work to Vietnam, Malaysia and Singapore where labor and raw materials costs are less expensive.

Until next time....

Good Luck and Good Job Hunting (Go East Young Man and Woman)

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The German drug maker Bayer today announced that it plans to eliminate 4,500 jobs by 2012. Of the 4,500 positions to be cut, roughly 1,700 will be eliminated in Germany. Interestingly, during the same period, Bayer plans on creating 2,500 new jobs in “emerging markets;” yet another sign that big pharma is betting on translating the explosive growth of these markets into large profits.

While pharma’s interest in emerging markets may be good for the workers who live in these regions, it has been disastrous for scientists and sales personnel in developed markets like the US and Europe. To date, almost 200,000 pharmaceutical and biotechnology employees have lost their jobs since 2007.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Most major pharmaceutical companies left Brazil about 30 years ago. However, much has changed in the country over the past 30 years and most western pharmaceutical companies are rushing back into Brazil to expand their operations and make acquisitions. At the same time, many Brazilian drug makers are beginning to consolidate and spread abroad.

The exodus of multinational drug companies in the 1980s was prompted by high inflation, tough government-mandated price controls and the lack of strong intellectual property and patent laws. Over the past 20 years Brazil has become a leader in agricultural technologies and made substantial investments into biotechnology. Along with these gains, patent rules and regulatory rules for pharmaceuticals and generics have become much stricter; making Brazil much more attractive to most major pharmaceutical manufacturers as growth of established markets continues to slow and need to increase sales in developing markets is critical. At present, Brazil is the eight largest eighth-largest drug markets in the world by sales. Much of this growth has been spurred by the rapid growth of the middle class (remarkably without reimbursement from state or private health insurance).

Some of the drug makers that have already invested in Brazil include Novo Nordisk, Sanofi-Aventis, Pfizer and Astra Zeneca. Novo Nordisk was an early entrant with its purchase in 2001 of Biobrás, a large insulin production plant outside São Paulo. Last year, Sanofi-Aventis acquired Medley, growing its portfolio of over-the-counter and branded products to complement its own offerings. Last month, Pfizer bought 40 per cent of Teuto, another generics business; other US, European and Japanese companies are continuing to study the Brazilian market closely.

While many western companies have gained a foothold in Brazil through M &A activity, others are attempting to develop their own internal presence.  Astra Zeneca, for example, is preparing for a launch of a series of both branded and generic products in the country.

In addition to the growing interest of multinational companies, some of Brazil’s domestic drug makers have been active. For example, Aché, a family-owned group and one of Brazil’s largest branded generics producers, has made smaller domestic acquisitions, and was considering buying Medley. The company has also begun forging alliances across Latin America, while its rival Eurofarma earlier this year bought Laboratorios Gautier in Uruguay, as the groups seek economies of scale in manufacturing and sales across the region. Even Farmaguinhos, the state-owned Brazilian drug company, has been collaborating with the African nation Mozambique.

Although the Brazilian government has made sizeable investments into research units such as the Butantan Institute in São Paulo and Oswaldo Cruz in Rio de Janeiro, the Brazilian drug industry is still in its infancy. The question is whether or not domestic drug makers will be able to meet demand before they are acquired by foreign companies interested in making inroads into Brazil’s burgeon drug market.

Until next time….

Good Luck and Good Job Hunting!!!!!!

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The era of blockbuster drugs was officially declared over several years ago by many pharmaceutical analysts and pundits. Nevertheless, as the old adage goes “it’s difficult to treat old dogs’ new tricks!” After all, the blockbuster drug model has been the major driver of pharmaceutical and biotechnology markets for close to 50 years. Consequently, big pharma and biotech companies haven’t truly abandoned the possibility of finding potential new blockbusters. And, it appears that the blockbuster heir apparent may be drugs to treat rare aka orphan disease indications. 

At first blush, this strategy may not make a lot of sense. This is because rare diseases afflict only small numbers of patients (at least in the US and other Western nations). However, what may be considered a rare disease in Europe or the US may actually be less rare in countries with large populations like China and India. Further, while current rare diseases patient populations may be small, the cost of the drugs developed to treat them is extremely high. In some instances, the annual cost per patient can exceed several hundred thousand dollars. If you do the math, it becomes apparent that developing rare disease treatments or so-called niche busters can actually be very big business. 

The rare diseases business model has been perfected by Genzyme and many big pharma companies are trying to emulate it. To that end, big pharma’s push into rare diseases continues to gather momentum. So far this year Sanofi-Aventis has made an $18.5bn move for Genzyme, while Pfizer and GlaxoSmithKline have both created rare disease business units.

According to Glaxo’s estimates, 7,000 rare diseases have been identified and collectively this affects 6-8% of the world’s population; in the US and Europe alone rare diseases affect 25 million people. In addition mortality rates are very high, often at a very young age, and less than 10% of these diseases are treated with approved drugs.

To date, over 7,000 rare diseases have been identified. Companies involved in the new rare diseases treatment race have whittled the list down to roughly 200-250 disorders that represent a clear path for clinical, regulatory and commercial success. The criteria used to select these indications include identifying rare disorders with: 1) a relatively high prevalence rate, 20 an early age of onset, 3) a large unmet medical need and 3) a known molecular target. The indications have been broadly classified into four distinct groups:  metabolic disorders, autoimmune/inflammation, central nervous system and blood disorders.

While Genzyme identified, developed and commercialized its rare diseases treatments, it is likely that big pharma companies like Pfizer, Glaxo, and Merck will either in-license potential new treatments or acquire companies with platform technologies or drugs in various stages of clinical development. For example, Merck’s acquisition of Glycofi several years ago has allowed the company to enter into the rare diseases and biosimilar markets.

One of the major problems with extant rare diseases treatment is their excessive and oppressive costs. One can only hope that the increased competition in the rare diseases space will help to lower drug prices and make them more affordable for patients who suffer from these devastating and life-threatening disorders.

For more insights in to the orphan drug disease market, check out an article that I wrote for Life Science Leader this month

Until next time...

Good Luck and Good Job Hunting!!!!!

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Pfizer today announced plans to set up a Rare Diseases Research Unit that will target the more-than-6000 global orphan diseases. For those of you who may not know, orphan diseases are classified by the US Food and Drug Administration as those that afflict 200,000 persons or less.

According to a press release, Pfizer’s new division will “pursue treatments across all therapeutic areas and modalities and will serve as the focal point for the company’s existing research on rare diseases”. It also intends to “work closely with patient advocacy groups, like the National Organization for Rare Diseases, as it develops and advances the unit’s research strategy. It will be lead by Edward Mascioli, most recently the head of Dapis Capital, a private equity firm. Previously he was vice president of clinical affairs at Peptimmune and senior medical director at Paraxel.

Pfizer’s decision to enter the orphan drug market signals that no markets are too small for big pharmaceutical companies to consider in an era where blockbuster drugs are few and far between. Nevertheless, it is noteworthy that orphan drugs (which are generally biologics) offer drug maker several perks including: seven years of market exclusivity, tax breaks and credits, reduced clinical trials costs and expedited regulatory review. More importantly, perhaps, orphan drugs are highly priced and can yield impressive returns even though they are used to treat small patient populations. For example, several of Genzyme’s drugs such as Myozyme and Cerezyme—both designated as orphan drugs—have already reached over $1.0 billion in annual sales. 

While sales of orphan drugs may never reach those of Plavix, Lipitor, Epogen and other multibillion dollar blockbusters, garnering US regulatory approval for four or more (which cost much less than $1.5 billion to develop) will likely provide a substantial ROI to companies that develop them. Also, developing drugs that improve the quality of life for patients with no other treatment options will undoubtedly go a long way to improve tarnished reputation of the pharmaceutical industry.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Astellas, Japan’s second largest pharmaceutical company, yesterday announced that it will hire at least 300 new pharma sales reps in China as part of its ambitious plan to increase its global revenue stream by 17 per cent over the next five years.

Documents released by the company indicate that it expects sales to double in China by March, 2015 emphasizing the fact that emerging markets will likely drive the future growth of the pharmaceutical industry. Astellas hopes to expand the indications for Prograf, its top selling organ transplantation medication to include rheumatoid arthritis, lupus nephritis, ulcerative colitis and myasthenia gravis.

Earlier this month, Astellas revealed that it would purchase NY-based OSI pharmaceuticals for $4.0 billion. The purchase will provide Astellas with its first approved cancer drug (OSI’s Tarceva) and allow Astellas to establish a firmer footing in the US pharmaceutical and biotechnology markets.

Total worldwide net sales of Tarceva for 2009, were approximately $1.2 billion and OSI's share of those revenues were $359 million. In the first quarter of 2010, Tarceva sales grew 10%

While hiring 300 reps in China may be good for the Chinese economy, the OSI deal will likely result in job cuts and further exacerbate the growing unemployment rate in the New York, New Jersey and Pennsylvania region.

Unlike the US, there seems to be a growing need for pharmaceutical and biotechnology R&D and sales employees in China and other parts of Asia. To that end, I hear that Beijing and Shanghai are lovely this time of year!!!!

Until next time...

Good Luck and Good Job Hunting !!!!!!!!

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It is no secret that growth of the pharmaceutical industry has slowed to single digits in the past five years or more. In fact, many experts don’t expect there to be double digit growth in this sector for a long time. Instead, future robust growth of the pharmaceutical industry is expected to take place in emerging markets including India, China, Brazil, South Africa and others. This is because the economies of these countries are booming and the middle class in these nations continues to rapidly grow. 

While branded prescriptions drugs once dominated Western markets, it is likely that generics or branded generic products will be the major players in emerging markets. Because of this, big pharma companies such as GlaxoSmithKline, Daiichi Sankyo and most recently Abbott Laboratories have either purchased or crafted large marketing deals with smaller regional drug manufacturers.

Daiichi Sankyo paid $4.0 billion in 2008 for a major share of India’s Ranbaxy Laboratories and GlaxoSmithKline earlier this year acquired exclusive rights to over 100 products produced by Dr. Reddy’s Laboratories, another Indian drug maker with a broad reach in emerging markets.

Today, Abbott Laboratories announced that it would purchase the healthcare business of Piramal Healthcare Ltd, one of India’s largest purveyors of branded generics for $3.72 billion. When the deal closes, Abbott will inherit the rights to about 350 brands and trademarks and a manufacturing plant in northern India. Also, Piramal agreed to a six year non-compete agreement for branded generics. The remaining parts of Piramal include a custom manufacturing business, over-the-counter products, vitamins, diagnostic devices and Piramal Life Sciences a drug discovery company.

The company, which has India’s largest sales force, would become a subsidiary of Abbott Laboratories and employ about 7,500 workers. Last week, Abbott said it would license at least 24 products from Zydus Cadila to sell in emerging markets. Analysts estimate that emerging markets account for 20 percent of Abbott’s business. The Piramal and Zydus Cadila deals suggest that Abbott maybe the company to reckon with in emerging markets in India and elsewhere.

 Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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One economic downturn and it seems as though the pharmaceutical world has been turned upside down! Who would have thought a few years ago that emerging pharmaceutical markets in India and Asia will outpace the US and Western European markets in the very near future (I did but nobody listens to me). To that end, Ranbaxy Laboratories will hire nearly 1,500 marketing executives, expanding its sales team by at least 50%, to spur sales and regain its rank as India’s top drug maker. The recruitment push is among the biggest by an Indian drug maker in recent years.  Ironically, pharma sales reps are still being regularly layed off in the US.

The company plans to hire mostly medical representatives, regional managers and area managers by July to boost sales in the rural markets.  According to a Ranbaxy hiring manager “Ranbaxy is looking at new rural markets and deeper penetration in interior markets.”

Ranbaxy is owned by Japan’s Daiichi Sankyo which employs over 12,000 people in 46 countries.

Industry analysts suggest that Ranbaxy’s aggressive hiring push is a sign that the company is focusing on internal markets which are poised for exponential growth in the next few years. Also, Ranbaxy has had its share of legal and regulatory disputes over patents and generics drugs in the US and Western Europe signaling that the company may be pursuing those markets less aggressively than in the past.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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While I was pleased that President Obama and the Democrats were finally able to deliver much needed reform to an ailing American healthcare system, the compromises that were made to pass the bill are troubling. First, language allowing reimportation of lower cost drugs from Canada and other developed nations was eliminated from the bill. Second, the provisions allowing the contentious 12 year data exclusivity provision for generic versions of biologic and biotechnology drugs remained in the final bill. Finally, and perhaps most importantly, any language alluding to or implying that the US government, may, in the future, be able to negotiate or regulate drug prices was obliterated. In short, the pharmaceutical and biotechnology industries received all of the assurances and guarantees that were in the deal brokered by Billy Tauzin, the former head of the lobbying group PhRMA, between the White House and PhRMA over a year ago. Surprisingly, Tauzin was fired by PhRMA several weeks ago because its leadership mistakenly thought that Tauzin conceded “too much” to the Obama Administration when he brokered the original health reform package with the White House. (At the time that Tauzin was fired, health care reform legislation appeared to be on life support and all but dead).

In the final analysis, big pharma and biotech will give back $85 billion over ten years —largely by agreeing to give back some of the profits it was allowed to collected from the egregiously flawed Medicare Part D legislation passed during the odious Bush Administration. While $85 billion may seem like a lot (to the average American citizen) to give back, it is important to note, that the size of the global pharmaceutical and biotechnology markets is over $600 billion per year. Although growth in these markets is beginning to slow in developed nations like the US and Japan (to high single digits), it is beginning to explode in heavily populated developing nations like China, India and Brazil where it is roughly $12-18%. Put simply, despite assertions to the contrary, business in the biotechnology and pharmaceutical markets is booming and likely to continue for the foreseeable future. In other words, the newly passed healthcare reform legislation is a “sweetheart deal” for the US life sciences industry.

Ironically, while the healthcare reform bill insures that almost all Americans will be entitled to healthcare coverage and that insurance companies cannot deny healthcare benefits to persons with pre-existing medical conditions, the legislation may actually limit the access of Americans to potentially life-saving biotechnology drugs. This is because the 12 year data exclusivity period for generic versions of branded, biotechnology drugs (otherwise know as follow-on biologics or biosimilars) remained in the final version of the healthcare reform bill.

As I previously mentioned, this provision disallows approval of follow-on biologics for a period of 12 years from the data that the original biologic received US regulatory approval. For example, if a branded biologic or biotechnology product garners US regulatory approval in 2010, the earliest date that a generic version of this product would be able to appear on the US market would be 2022. Moreover, in some instances, the 12 year data exclusivity provision may extend the so-called patent life of a product. Using the example above, if the patents protecting the product happen to expire in 2019, the innovator company is guaranteed an additional three years of marketing exclusivity before generic versions of the product can appear on the US market. Finally, the 12 year data exclusivity provision effectively prevents foreign biosimilar manufacturers from competing in the US biotechnology market until about 2018; a strategy designed to allow the US to maintain its dominance of the global biotechnology market. Interestingly, despite the approval of six or more biosimilars in Europe, these products have failed to catch on and are not able to compete with their branded, innovator counterparts.

In conclusion, I laud President Obama’s persistence and give him props for his ability to deliver (as promised) health reform to the American public. I have no doubt that the legislation will help to improve the delivery of healthcare in the US and hopefully improve the overall health of Americans. However, while the new healthcare reform legislation is a first, positive step, the American healthcare system will never entirely be “fixed’ until US drug prices are regulated—like they are in the rest of the world. Then, and only then, will the US government be able to control and contain healthcare costs in America.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

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Earlier this week, an article appeared in the NY Times Business section heralding the entry of several large pharmaceutical companies into the branded generics industry. For those of you who may not know, generic drugs are lower cost versions of brand name prescription drugs that have lost patent protection. Generic prescription drugs are usually much cheaper than their brand name counterparts but generally deliver the same therapeutic effects as the branded product. In most cases, so-called “commodity generic drugs” are not branded and sold to consumers by their chemical names. A good example of a commodity generic drug is the anti-depressant sertraline HCl; which Pfizer sells under the brand name Zoloft. Pfizer still manufactures and sells Zoloft but Zoloft lost patent protection several years ago and a generic version of the active ingredient, sertraline HCl, is now available to consumers. Because sertraline HCl is much cheaper than Zoloft, pharmacists almost always substitute prescriptions for Zoloft with sertraline HCl. This is perfectly acceptable because sertraline HCl was approved by the US Food and Drug administration with an AB rating which means that sertraline HCl is biologically equivalent to Zoloft.

Unlike commoditized (no-name) generics, branded generics are off-patent prescription drugs that are sold to consumers—as the name implies—under a brand name. Typically, because these products are “branded” and actively marketed by manufacturers they are sold at higher prices than equivalent no-name generics. This is because consumers are generally willing to pay more for drugs that are manufactured by well known and trusted companies as compared with no-name generics which are usually produced by lesser known or unidentified manufacturers.

Branded generics are not a new or novel concept. They were previously championed by a number of generics manufacturers, most notably Barr Laboratories, which was recently purchased by the Israeli generics giant TEVA. In the past, when pharma embraced the blockbuster drug business model, drug manufacturers built in revenues— that eventually would be lost through patent expiry—into the price of their top selling drugs. This allows drug companies to maximize ROI early in a drug’s life cycle years before patent expiry Studies have shown that branded prescription drugs can lose as much as 90% of their original value two years after the introduction of generic equivalents. Consequently, because of drastically diminishing financial returns after patent expiry, it didn’t make economic sense to continue to promote and support a brand that was facing generic competition. Put simply, the company made its money on the drug and it is time to move on. 

However, the emergence in recent years of an affluent middle class in developing markets like China, India, Brazil, Eastern Europe and elsewhere is causing branded pharmaceutical companies to reconsider their generics strategy. In these markets, many people frequently pay out of pocket for their medicines but cannot afford to pay for the expensive brand name drugs. Also, in some emerging markets, where the threat of low quality or counterfeit prescription drugs may be high, consumers who can afford to purchase medicines are willing to pay more for drugs manufactured by well known and respected companies. Finally, IMS Health estimates that close to $89 billion in US drug sales alone will be lost to generic competition over the next five years or so.

In the absence of any new blockbuster drugs on the horizon, many big pharma companies have been scrambling to acquire or enter into relationship with established regional generic manufacturers. For example, GlaxoSmithKline recently bought a stake in Aspen a South African generics manufacturer and entered into an agreement with India-based Dr. Reddy’s laboratory to sell generic products in Asia and other emerging markets. Likewise, in the last year, Pfizer created an off-patent generics division (products are sold under Greenstone label which is a wholly owned subsidiary of Pfizer) and signed agreements with three Indian companies to sell their products in the US and other markets. These deals added about 200 products to Pfizer’s new generics portfolio. Further, Pfizer recently announced that the Greenstone brand has become the world’s seventh largest generics seller. In addition, Pfizer is expected to make a formal bid to purchase the financially-troubled German generics manufacturer Ratiopharm; one of Germany’s largest purveyor of generic drugs.

Not to be outdone by the competition, the French drug maker Sanofi-Aventis recently purchased Brazil-based Medley, a dominant player in the South American branded generics industry and Laboratorios Kendrik, a Mexican generics producer. Last year, the company also purchased Zentiva, a leading Czech generic manufacturer signally the company’s intention to move into financially-lucrative Eastern European markets.

Watson, one of the largest American generics manufacturers (which primarily operates in the US) recently purchased Arrow, a generic producer that operates in 20 different countries. Finally, Novartis, recognizing a business opportunity before most of its competitors, entered the generic market in 2003 following creation of Sandoz, a division of Novartis that manufactures and sells small molecule generic drugs and branded biosimilar products. Recently, Novartis purchased the German branded generics manufacturer Hexal, making it the world’s second largest generic drug manufacturer after Teva.

The entry of pharmaceutical companies into the generics business is allowing these companies to pursue a two-tiered business strategy in certain markets which is designed to preserve the long term value of their branded franchises. For example, companies can continue to sell their expensive name-brand drugs to the wealthy (or those that can afford them) and concurrently sell the more moderately priced branded generics which includes and over the counter products to the broader market. 

While some may lament the end of the blockbuster drug era, rising healthcare costs and generic competition is forcing big pharma to continue to explore novel and innovative strategies to reinvent itself.

Until next time...

Good Luck and Good Job Hunting (try the generic industry; business is booming)

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The loss of over 200,000 pharmaceutical jobs over the past three years has been mainly driven by the anticipated loss of revenue from blockbuster drugs that will lose patent protection by 2013. While drug makers frequently cite blockbuster patent expiry as the reason for the need to downsize, they rarely provide the business and economic metrics, numbers and statistics that have influenced their decisions. 

Patricia Van Arnum, Senior Editor of Pharmaceutical Technology wrote a fascinating article in this month’s issue of Pharmaceutical Technology Europe that skillfully outlined the economic forces that are driving branded pharmaceutical companies to downsize and reorganize. According to the article, in October 2009 the pharmaceutical intelligence firm IMS estimated that the global pharmaceutical market is expected to growth 4-6% in 2010 and reach $825 billion. Market growth at an annual rate of 4-7% is expected to continue through 2013 and the size of global pharmaceutical market is projected to exceed $975 billion. The US pharmaceutical market, the largest in the world, is expected to drive much of this growth. However, the growth of the American market is only expected to be 3.5% in 2010. In market contrast, China’s pharmaceutical market is expected to increase by a staggering 20% per year and contribute 21% to the overall growth of the global pharmaceutical market by 2013. 

While prospects for the US market are better than originally anticipated, the loss of nearly $137 billion in revenues in 2013— because of patent expiry of blockbuster products—coupled with fewer new drug approvals are the factors that will limit the growth of the global pharmaceutical market to single digits through 2013 and likely beyond. Some of the drugs slated to lose patent protection by 2013 include Lipitor (atorvastatin) by Pfizer, Plavix (clopidogrel) by Sanofi-Aventis and Bristol-Myers Squibb and Seretide/Advair (salmeterol and fluticasone) by GlaxoSmithKline. Lipitor, Plavix and Seretide were the number one-, two- and foruth best-selling drugs in 2008 with global sales of $13.7 billion, $8.6 billion and $7.7 billion respectively.

The increasing growth of the generic pharmaceutical industry is best reflected in the concomitant growth of merchant active pharmaceutical ingredient (API) manufacturing industry. In the API world, there are two types of manufacturers; the so-called captive API producers or companies that exclusively manufacture APIs for finished, branded products and merchant manufacturers which are third party providers of APIs. Over the past four years or so, the growth of the merchant API market for generic products has substantially outpaced the growth of the API for innovator products. For example, from 2004-2008 the merchant market for generics grew at an average annual rate of 9.1% from $12 billion in 2004 to $17 billion in 2008 according to a recent report by the Chemical Pharmaceutical Association (CPA). In contrast, the CPA determined that the merchant market for innovator/branded APIs only increased at an average annual rate of 4.4% from $16 billion in 2004 to $19 billion in 2008. Looking ahead, the worldwide market for merchant APIs is projected to grow at an average annual growth rate of 6.8% through 2013 to about $50 billion. During this period, growth of innovator APIs is expected to be about 1.8% whereas the growth of generic API is expected to be a robust 11.4%.

The US is currently the largest market for generic APIs and consumed roughly 22.9% of the total global demand for generic APIs in 2008. China, which is the second largest consumer of generic APIs, consumed 19.2%. While the US is expected to remain the largest consumer of both innovator and generic APIs, China is projected to become the largest consumer of generic APIs in 2013 capturing a 26% share of the total generic API market (the US will be number 2 with 20.5% market share).

According to industry analysts, China, India, Latin America and Central and Eastern Europe (most notably Russia), represent attractive growth opportunities for generic APIs. India and China now account for roughly 25% of the global generic market and demand in these countries is expected to remain strong for the foreseeable future as the middle class continues to emerge. To that end, China is projected to have the highest average annual growth rate at 18.4% and India’s market will grow by 14% through 2013. Similar growth is expected for the Eastern European, Russian and Brazilian generic API markets.

While the economic size of emerging generic markets is still small compared with those of the US, Western Europe and Japan, it signals that generic drugs will likely drive the future growth of the pharmaceutical industry. The lack of innovation and rising costs of branded, prescription drugs in developed nations is the main driving force behind the rapid emergence of the generic drug industry. That said, is it any wonder why Pfizer is thinking about entering the generic pharmaceutical business and that Western drug companies are shedding scientists and sales people in the US and Europe and growing the sizes of their R&D and sales force staffs in Asia, Eastern Europe and Latin America? Honestly, if I had any money left to invest, I would seriously be considering traded generic pharmaceutical manufacturers—their future success is almost guaranteed!

Until next time...

Good Luck and Good Job Hunting!!!!!!!

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I am attending the Annual Biomedical Research Conference for Minority Students (ABRCMS) in sunny Phoenix, AZ where I will be providing career development guidance to undergraduate and graduate students. Ironically, given the dismal job prospects in the life sciences industry for entry level employees, I will be giving a talk on how to find a job!  Last year's meeting in Orlando was a great one and I expect this one to be just as good.

While I am on the road, it doesn't mean that I won't be keeping track of the goings on back in my neck of the woods. To that end, Merck announced today that it will keep Schering Plough's corporate headquaters in Kenilworth, NJ open. Merck announced the decision today after closing on the $7 billion deal yesterday. This is good news for the NJ residents who currently work at the Kenilworth site. New Jersey has been extremely hard hit by all of the pharmaceutical layoffs in the past few years. Unemployment continues to rise and things will not get any better since conservative Republican Chris Christie was elected governor on Tuesday (he plans on laying off massive numbers of state employees) once he takes office in 2010.

Johnson and Johnson, on the other hand, announced that it was closing research & development facilities in Radnor and Chesterbrook, PA and consolidating those operations at the company's Spring House site. The New Brunswick, N.J., company would not say how many jobs are at those locations now or how many would remain in Spring House after the move, which is to be completed by 2012. These closure come shortly after JnJ announced earlier this week that is was elimating ca 8,200 employees or roughly seven percent of its global workforce.

Let's hope that things begin to improve soon. 

Hat tip to the Pharmalot blog!

Until next time....

Good Luck and Good Job Hunting!!!!!!

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Sepracor shareholders may be able to sleep better at night without the aid of the company’s top selling insomnia drug Lunesta after agreeing to be purchased on Thursday by Dainippon Sunmitomo Pharma of Japan. Dainippon will pay $2.6 billion for the rights to Lunesta and other drugs in Sepracor’s pipeline. 

This is the third deal in the last two year involving the purchase of American pharmaceutical companies by Japanese drug makers seeking to aggressively expand their reach into the US drug markets. Last year, Takeda Pharmaceutical purchased Cambridge, MA-based Millenium Pharmaceuticals for $8.8 billion and Eisai brought MGI Pharma of Minnesota for $3.9 billion. 

Sepracor, a specialty pharmaceutical company founded in 1984 focused on strategy of developing single isomers or chiral drugs and active metabolites of top selling drugs with the goal of developing a pipeline of proprietary pharmaceutical products. The company’s most successful product is Lunesta, a prescription sleep aid that had sales of almost $500 million in 2008.

Last January, the company layed off 20% of its workforce (350 sales reps, plus 410 contract sales reps) as Lunesta sales slumped because of competition from generic versions of Ambien and branded Ambien CR and revenue losses from its Xopenex COPD franchise. It isn’t clear whether or not more Sepracor will shed more jobs after the Dainippon deal closes sometime next year. 

Stay tuned for updates!

Until next time...

Good Luck and Good Job Hunting!!!!

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Pfizer, the world’s largest drug maker, announced on Thursday that it is unveiling a new program that will let people who have lost their jobs and health insurance to keep taking Pfizer medications — for free, and for up to a year. The company will provide more than 70 of its prescription drugs ranging from Viagra to Lipitor at no costs to unemployed and uninsured Americans who lost their jobs since Jan. 1 and have been taking Pfizer drugs for me than three months. It is not clear how much Pfizer will spend on the program and whether or not costs will be capped.

The announcement comes amid massive job losses caused by the recession and a campaign in Washington to rein in health care costs and extend coverage. The move could earn Pfizer some goodwill in that debate after long being a target of critics of drug industry prices and sales practices. The program also likely will help keep those patients loyal to Pfizer brands. Don't be surprised if other pharmaceutical companies announce similar program over the next few weeks.

Pfizer and the rest of the drug industry wants is trying to have a voice in the debate over how to overhaul the U.S. health care system, partly by joining in a pledge this week to help hold down inflation of health costs. In the mean time, drug companies have been raising prices on their drugs, partly to offset declines in revenue as the global recession reduces the number of prescriptions people can afford to fill.

Pfizer ought to be commended on the program and its concern for the health and well being of unemployed and uninsured Americans. However, it is important to point out that this is little more than a high profile, marketing campaign designed to improve the image of drug makers. More important, it is the first public acknowledgement that drug makers are willing to engage legislators in discussions about how to reform healthcare to reduce costs and cut expenditures. 

What really is at stake here is whether or not the US government will begin regulating drug prices as part of a comprehensive healthcare reform package. As many of you may know, the US government, unlike most other governments in the world, cannot negotiate or set prescription drugs prices. Not surprisingly, the US prescription drug market is the largest and most profitable in the world. It will be interesting to see how the US healthcare reform discussion unfolds—clearly a lot is at stake for the American prescription drug industry.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

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According to a recent report from the consulting firm Ernst and Young, cost cutting and downsizing are no longer the primary objectives for most pharmaceutical companies. Instead, they are mulling over the new challenges that universal health care may bring and how to better reach consumers in emerging markets. 

In a recent interview, Carolyn Buck Luce, one of the paper’s co-authors said “in our previous report, cost containment was one of the most important initiatives. In this report we found more of a balanced approach where optimizing cost was [just] one the many objectives. Only 40 percent of the executives said optimizing costs was their most important initiative, compared to a similar study in 2007 where 92 percent of those surveyed ranked cost reduction as their main initiative. In the latest survey, 66 percent of executives said the most important strategic initiative was reinvigorating the R&D pipeline, while 40 percent said expanding into new markets and restructuring their marketing and sales programs to become more customer-centric were their main areas of focus. “

One of the most telling quotes in the piece is: “There was an awful lot of focus on costs a year ago, when companies realized there was a lot of fat in their companies and a lot of opportunity to cut costs.” Does that mean that pharma really didn’t have to lay off tens of thousands of employees over the past year? It kind of makes you wonder doesn’t it? And, if you believe that pharma is truly finished with downsizing--would you be interested in a great deal on some land in Florida?

Until next time…

Good Luck and Try to Hang On to Your Job!!!!!!!!

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