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Pharma news in brief

Our weekly round-up of news affecting the industry.

Drug sales growth in US dips

US prescription drug sales faced a slow rate of growth at just 8.3 per cent to $235bn in 2004, and the downward trend is likely to continue this year, according to IMS Health. Safety concerns, following Merck's withdrawal of Vioxx and controversy over the link between teenage suicide and antidepressants, as well as pricing pressures and generic competition, all contributed to the declining growth.

IMS predicts that sales growth for 2005 could be as low as 7.5 per cent and said slower, single-digit growth in the US is moving in line with Europe, where pricing is capped by governments. While pharma laments the decrease in growth, there is congressional concern over the mounting drugs bill that has led to a debate about the US governments involvement in negotiating Medicare prices. The Bush administration estimated the mounting drugs bill for Medicare, the health plan for the elderly, at nearly $200bn higher than expected.

AZ to publish new Crestor safety data

AstraZenenca (AZ) is preparing to release further new data about its cholesterol-lowering drug, Crestor, 'fairly imminently', following slow sales amid a flurry of safety concerns. Dr David Graham, an official from the Food and Drug Administration, told the Independent newspaper that the drug has a ìunique toxicity [and should only be used] as a second line drug when people have failed to respond to statinsî.

AZ spokesman, Steve Brown, defended Crestor saying the drug ìhas very good efficacy and a safety profile in line with other statins.î The Guardian newspaper revealed that the UK medicines regulator also expressed concerns months before the drug went to market. Crestor is viewed by analysts as a potential $3bn a-year-blockbuster and seen as vital to AZ's growth following recent regulatory setbacks with Iressa and Exanta.

Elan looks to full health next year

Elan, the Irish pharma firm, has predicted it expects to return to profitability in 2006, following a share collapse in 2001 on concerns about its accounting methods. The company, which was investigated by the Securities & Exchange Commission, announced a net loss of $88.2m in the fourth quarter of 2004 compared to a loss of $308m for the same reporting period in 2003. Elan expects revenues to grow at a rate of between 15 and 20 per cent in 2005, while R&D costs are expected to remain on a par with those in 2004. Shares fell 0.4 to 21.41p.

The fight against illegal online sales

Pfizer and Microsoft Corporation have filed parallel lawsuits against online sellers of medicines, website operators and spam advertisers involved in the sale of illegal versions of Pfizer's Viagra. In an attempt to target the entire supply chain, both companies have sought out the identities of those involved in counterfeit, or unauthorised versions of Viagra, following a seven-month investigation. Loss of sales of Viagra as a direct result of illegal sales are unknown, although an earlier lawsuit established several million dollars of illegal sales had taken place.

In August Pfizer took legal action against 30 websites claiming to sell Viagra, or generic versions of the drug, despite the fact that there is no legal generic version. Pfizer said 29 sites were no longer operating. In addition, the UK has been branded the counterfeit capital of Europe having the highest number of fake Viagra pills seized in 2003.

Pfizer may cut up to 10,000 jobs

Speculation that Pfizer could cull 10,000 jobs worldwide has been fuelled by an announcement that the company is reviewing its entire business. The company currently employs 120,000 people worldwide. Investment bank, Lehman Brothers, said it had been told Pfizer would cut its sales force by as much as a third, while Banc of America has speculated the firm will cut 10,000 jobs. The pending review on the safety of COX-2 inhibitor drugs and the loss of patents on some of Pfizer's best sellers could sway the figure. The company has said it will not give further details about potential job losses until its investor meeting in April. AstraZeneca laid off 500 staff from its US sales force and analysts predict many pharma firms are keen to reduce staff numbers.

HealthSouth fraud saga continues

The defence for Richard Scrushy, the former chief executive of HealthSouth, will seek to discredit claims that secret tapes prove Scrushy not only knew about the $2.7bn accounting fraud but also attempted to cover up the fraud. The secretly recorded conversations between Scrushy and the former chief financial officer, Bill Owens, are a crucial part of the prosecution's attempt to prove Scrushy was involved in inflating profits to push up share prices. Owens made the recordings after agreeing to co-operate with the Federal Bureau of Investigation. Including Owens, 15 former HealthSouth employees have agreed to testify against Scrushy.

30th September 2008

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