 $44 billion offer because it "substantially undervalues the company," the San Francisco-based biotech made it known that if would be implementing an employee-retention program to help its people make sense of the Roche deal.

This doesn't come as much of a surprise. Following the announcement that Roche was seeking to purchase the rest of its shares in Genentech—while bandying about words such as "redundancy" and "consolidation"—a number of Genentech employees took to the blogosphere to air their displeasure.

"I am a researcher with DNA and will put out my resume the second the deal goes through with Roche," posted Dan on the Wall Street Journal Health blog. "Many of us here do not want to work for Big Pharma."

"People WILL leave," posted another anonymous employee. "That is not a threat but reality. Genentech's strength is in the science and in people management—with this no longer in place—poof, there goes a great big chunk of history and amazing innovation and productivity."

In an interview with Pharm Exec, Genentech spokesperson 

 said that the objective of the program is to facilitate employee retention and address employee concerns in this time of uncertainty.

While she wouldn't give details of the program's conception, other than it involved a special committee and an outside consultant firm, she said that the program will have a number of components, including a cash retention bonus in lieu of the 2008 stock option program, an enhanced cash severance payment, health benefits coverage, and accelerated accrual of stock options under certain conditions.

"The concern is likely about what will be the result of any acquisition by Roche, and if it would be a dramatically changed environment for employees," 

 said. "They would be concerned about losing employees to other companies in the close vicinity—the most obvious being Amgen."

There is no word from Roche on whether it would enact a similar program for its employees. Roche already stated that it would eliminate its Nutley offices and move its headquarters to the West Coast in the event a deal is reached.

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Tacked on to Genentech's press statement about its rejection of Roche's offer, the biotech firm announced the formation of a program to address employee concerns.

Genentech Launches Employee Retention Program

It looks like preemption is not going to be the crutch that device manufacturers and pharma companies had originally expected. As noted by 

 that a suit involving a pair of faulty hearing implants could continue in Texas, and that preemption could not be used to excuse the case. The medical device companies attempted to apply the 

 verdict to another Class III pre-market approval device, but failed.

, the device manufacturer triumphed in court on the grounds that it could not be sued at the state level for a product that received FDA approval. In Purcel, the lawsuit was allowed to continue because the judge felt that the argument was based on manufacturing defect claims—not a working product approved by FDA.

 decision would not bar claims based on a manufacturer defect," 

. "If a particular component was supposed to be made with two-inch wire and the company made it with three-inch wire instead, then perhaps the claim would not be preempted."

And that wasn't the only preemption case in the last week. On Monday in Minnesota, 

 that a plaintiff could not sue the over a faulty defribrillator.

"Plaintiff is ultimately wrong when he assumes that premarket approval guarantees the device is completely safe," the judge cited from 

. "As the Supreme Court aptly recognized, the premarket approval process is ultimately a cost/benefit analysis in which the potential health benefits are weighed against the potential risks."

So what can pharma glean from these cases?

 case be compared to a pharma company putting a contaminant into one batch of the product, and someone was hurt as a result of that," Herrmann said. "That's a slightly different exception to run-of-the-mill preemption, where the drug was made according to specifications and then it had a side effect."

Sounds familiar? Parallels could be drawn to the heparin debacle, where a manufactured contaminant somehow landed in an ingredient at a Chinese plant. Herrmann expects preemption to play a part in future heparin litigation, particularly whether the drug was made to proper specifications.

However, the 300-pound gorilla in the room is 

, scheduled for early next year. In that case, Wyeth contends that it shouldn't be responsible for bodily harm caused to Diana Levine, who was improperly injected with nausea drug Phenergan. The dosage was injected into her artery leading to gangrene and partial amputation of her arm. Wyeth argues that the drug worked as approved by FDA, relieving the drug manufacturer from wrongdoing.

The case for preemption gets shot down in Texas, but holds up in yet another Medtronic suit in Minnesota.

Preemption Makes Waves in Two More Cases

On Tuesday, Merck gave a rundown of the state of its vaccine business, informing analysts of its latest campaign results and announcing a reimbursement program for physicians.

Margaret McGlynn, president of Merck's vaccine and infectious disease division, said that the company has achieved fourfold growth in revenue in its vaccine business since 2005, due largely to the launch of Gardasil, RotaTeg, ProQuad, and Zostavax.

"Understanding vaccine revenue curves is extremely complex," McGlynn said. "It's very different from pharmaceutical or specialty products, where you can monitor weekly and monthly prescriptions and have people on chronic therapies. In the case of vaccines, you have to deal with questions of forecasting, for example, what the peak penetration will be."

As for patient compliance, Merck has seen that 75 percent of patients who take the first dose of Gardasil take the second dose, and about 50 percent complete the three-dose regimen. Merck said that it has had trouble penetrating the later age Gardasil market in the 19-to-26 age bracket. To combat the problem, the company launched a new DTC campaign to drive young adults to ask their doctors about Gardasil and the human papillomavirus, as well as a viral marketing program to get patients to send links to their friends.


To get OB/GYNs to understand how to become vaccinators, Merck has had to change the way it reimburses for Gardasil, by rolling out a helpline and sending specific materials to OB/GYNs to help them understand reimbursement, while providing information to patients to learn if their health plans reimburse for the drug. 

"Even though we have all these programs in place to help patients understand reimbursement, there is still anxiety with OB/GYNs over whether or not they can be reimbursed," McGlynn said.

After a lot of market research, Merck has taken a simple approach to solve the problem. Now, if an OB/GYN files a claim and the patient had insurance that would not reimburse the doctor, Merck will replace the dose so that there isn't an economic outlay for the physician.

"We've had significant buy-in with this concept, and we really believe that this is an effective approach to address concern about reimbursement" McGlynn said. "Many physicians have told us that as a result of having this program available, they will convert to same-day vaccination rather than making patients check with their insurance company first."

Margaret McGlynn, Merck's head of vaccines, expounded yesterday on the state of the company's vaccine program, including campaign strategies, product development, and a new reimbursement program for doctors.

Pharmaceutical Executive-08-19-2008

Genentech Launches Employee Retention Program

Preemption Makes Waves in Two More Cases

Merck Vaccine Market Takes Center Stage