While most big businesses are getting pounded on the stock market, pharma appears to be fairly stable according to a handful of analyst reports. Datamonitor, last week, released a report stating that although pharma hasn’t been as bright a star on Wall Street in recent years-due to a drop in new approvals and a bevy of blockbusters facing patent expiration- the drug industry is still cash rich, and doesn’t need to take on cheap debt in order to purchase new assets or boost returns to investors.

“Pharma companies are not only expected to weather the financial storm successfully, but also to use this period to exploit their unique cash strength by embarking on an acquisition spree,” said Datamonitor analyst Chris Phelps.

The report reveals interesting data, including the fact that the average top 20 pharma company has approximately $7.5 billion in cash available for investments. This also explains how Bristol-Myers Squibb, Lilly, and King Pharmaceuticals can make huge offers to companies such as ImClone and Alpharma at a time when most are counting their pennies.

“Under the cover of the credit crunch, Big Pharma will swoop in to acquire substantial biotech targets,” Phelps said. “Perhaps the clearest example of this intent is that Pfizer currently holds well over $25 billion in cash and short-term investments. It may well be that the credit crunch provides Big Pharma with exactly the opportunity it needs to rebuild ailing pipelines.”

 on Tuesday that, of late, smaller pharma companies have seen their stock prices decline more on average than larger companies. This could be a problem for biotechs holding out for bigger acquisition offers. 

“In the current economic environment, pharma can make acquisitions of companies at more attractive levels than they could six months ago,” Ryan said. “And they don’t need to tap into the capital markets to finance those transactions because they have their own cash.”


 For the most part, Moody’s agrees that pharma companies have a decent amount of cash available for deals, acquisitions, and mergers. However, a sizeable chunk of that cash is overseas, and therefore expensive to bring to the States.

“A large portion of the industry’s cash flow comes from overseas subsidiaries-some 75 percent by our estimates, including investments,” stated Moody’s senior vice president Michael Levesque, in a report. “That cash is accessible for US needs; however, under most scenarios, companies can access it only if they are willing to incur significant tax charges.”

If they want to act now, pharma companies have the choice of either using the money for offshore purchases or importing the cash to the US at a significant tax hit. The report notes that both scenarios are unlikely. More likely, companies will sit on the cash and wait for the (slim) chance of another tax holiday, or see if the new president makes any new policy changes.

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Analysts report that Big Pharma isn't being hit that hard by the credit crunch due to the large amount of cash many companies have in their coffers for mergers and acquisitions. However, smaller firms looking to be sold may have a hard time holding out for higher offers.

Pharma Not as Fazed by Wall Street Turmoil

Each year, industry loses billions of dollars in prescriptions and healthcare costs due to patient non-adherence. And each year, questions mount about why this is happening, and how to plug the holes in the system. On Monday, AstraZeneca released data from a study conducted with 200 physicians, the goal of which was to find out why patients are skipping their treatments.

Though the rank of result has been different in the past, the actual data aren’t exactly shocking. Tied for top among the reasons for non-adherence are drug costs and apprehension over starting treatment. Far lower in the study (though perhaps not surprisingly in a survey of physicians) were lack of information about the disease state, treatment, and medication; ignorance about condition; and conflict of information between physicians. 

Patient does not feel he or she needs the medicine (20 percent)
 

Side-effects of medication (17 percent)
 

Lack of concern over condition (5 percent)
 

Lack of information on disease or treatment (5 percent)
 

Lack of information on the drug prescribed (5 percent)
 

Lack of family/social support (5 percent)
 

Low satisfaction with the drug they are prescribed (3 percent)
 

Poor relationship with myself or another physician (2 percent)

“This survey gives us four very clear prongs that should be addressed,” said Karen Smith, vice president of external medical relations at AstraZeneca.

 on Monday that the company is using the data to tweak existing programs such as its 

 prescription savings program and to launch new campaigns to encourage people to stay on their medication.

To curb forgetfulness, drug companies are reaching out to tech vendors for a number of reminder tools. AZ is working with WellDoc to implement a software solution that sends a text message via cell phone to remind patients to take their medication. The service also provides important information for asthmatics such as weather and pollen counts.

Another option is an e-prescribing technology that sends a reminder to refill a prescription directly from doctor to patient. Because the message comes from the physician rather than a pharma company, patients are more encouraged to open the email, and do what’s asked of them.

This however, doesn’t change the fact that some people just don’t want to take their medication.

“Patients who feel as if they don’t need the medication are a big issue,” Smith said. “As a physician, I’ve sat down with patients and asked them why they feel that way; oftentimes it’s in relation to a chronic disease where they don’t necessarily feel sick, and they don’t see symptoms, such as the case in hypertension or high blood pressure. So it’s really about the physician taking the time to explain what the medication will do in terms of giving them a better quality of life and how ultimately it will mitigate further progression of the disease.”

In recent weeks, new studies have been released suggesting that one reason some patients can’t afford their treatments is the use of free samples of branded drugs for low-income patients. According to 

, the use of free samples (associated with a lower rate of prescribing generic drugs) could ultimately lead to a cycle of non-compliance. 

“At the end of the day, I think generics play an important option for patients and doctors to consider,” Smith said. “That’s something for the doctor and the patient to agree on, in terms of what is the best treatment. To get the most out of the medication, it’s about taking the medication as prescribed.”

AZ interviewed physicians to determine why patients fail to take their medicine as prescribed. Unsurprisingly, affordability and patient apathy tied for top excuses. Pharm Exec talked to AZ to find out what the company is doing to boost compliance.

AstraZeneca Digs Into the Cause of Non-adherence

The Association of the British Pharmaceutical Industry

 (ABPI) has come under attack from one of its long-standing members, 

which announced its resignation from the UK trade association last week. The move has highlighted a lack of harmony between big pharma and smaller to medium sized companies and puts pay to ABPI's claim to speak for the entire UK pharmaceutical industry.

The row revolves around the Pharmaceutical Price Regulation Scheme (PPRS) negotiations as Norgine believes that the ABPI is not representing the interests of smaller, specialized pharmaceutical developers.

The ABPI is remaining tight-lipped about the row and would only issue a statement. Norgine, however, has been extraordinarily vocal. Its COO, Peter Martin declared, “It has become clear in recent years that the ABPI's agenda is driven by the interests of its largest multinational members and that it is no longer representing the interests of small and medium sized companies with existing products on the market. The domination of the association by a handful of large companies, whose business model depends on patent-protected ‘me-too’ blockbuster medicines, has resulted in perverse consequences for those of us who are trying to help patients and their carers in more specialized niches such as gastroenterology. Norgine believes that the contribution of smaller innovative companies towards improving patient care needs to be appropriately recognized.”

 who represented smaller companies on the PPRS negotiating team, told 

, “The views and concerns of smaller companies were actively sought out and were key considerations for the negotiating team. They have been woven into the fabric of the new PPRS, as witnessed by the concessions relating to size of turnover. In addition, in actively supporting the uptake of innovative new medicines, the revised PPRS will bring value to many small, innovative companies and help them compete in the market.”

Norgine is also adamant that it has repeatedly expressed concerns about the uncertainty surrounding the legal borderline between a medicinal product and a medical device, and the potential risk to patients resulting from the commercialization of medicinal products misclassified as devices. “Unfortunately, this is another area where the ABPI was unable to take an active role due to an apparent conflict of interest with one of its largest members, whose affiliates elsewhere in Europe are exploiting this legal uncertainty.”

In its statement ABPI's Director-General, Richard Barker stated, “We regret the decision of Norgine to resign from the ABPI. Throughout the PPRS negotiations, there has been a very full and open consultative process, which has won wide appreciation from large and small companies alike.

“The ABPI has worked closely with smaller companies and their individual trade associations and as a result of this focus, we have won significant concessions for smaller companies. For instance, they will be insulated from the price cuts imposed as part of the PPRS. Companies with less than £5m turnover in 2007 will be completely exempt from the 3.9 percent cut and, for those with less than $43.85m turnover, their first $8.77m will be exempt.

“For the first time, the PPRS is not simply an economic agreement. It is an agreement, which will encourage innovation and from which all products that do not have effective generic competition should benefit. It is agreement for all, not a few.”

The company says it has no plans to pull out of any European trade associations and remains an active and satisfied member of the relevant trade associations affiliated with EFPIA in most of the European countries where Norgine operates. It will also continue with its membership of the 

 which represents small and medium sized companies operating in the UK pharmaceutical sector. 

Specialty drug firm Norgine splits from the British pharma association due to a growing rift about pricing. A "war of the roses" is escalating between Big Pharma and smaller drug manufacturers; Norgine could be the first casualty.

Pharmaceutical Executive-10-15-2008

Pharma Not as Fazed by Wall Street Turmoil

AstraZeneca Digs Into the Cause of Non-adherence

Norgine Bails on British Pharmaceutical Industry