Good morning, everyone. This is likely to be a short day, because here in the US, the Fourth of July holiday weekend is quickly approaching. For many, this pause in the action may provide an opportunity to reflect on the national state of affairs. We will not recite a litany of problems or attempt to preach. We will only say this - whatever you do, have a good time. And drive less. A lot less…

Pfizer Employee Gets Suspended Sentence For Embezzling (The Day)

Abbott Drug-Coated Stents Wins FDA Approval (Yahoo/Reuters)

Shire Will Pay $520M For Germany’s Jerini (Bloomberg News)

Bayer Buys Maxygen Hemophilia Unit (Yahoo/AP)

An FDA advisory committee voted 14 to 2 that all new diabetes drugs should undergo longer studies to ensure cardiovascular risks aren’t increased, a move that is expected to cost drugmakers untold millions of dollars to conduct additional clinical trials, the Associated Press reports.

The recommendation comes less than a year after the FDA was criticized for its handling of heart risks connected with Glaxo’s widely used Avandia diabetes pill, which was approved in 1999. The agency, however, didn’t add a warning about potential heart risks until last November, the AP notes.

The majority of the panel said drugmakers could begin safety testing, which is expected to take between five and seven years to complete, before they submit drugs to the FDA and finish the studies after their release, the AP adds. But at least one FDA panelist doubted whether the proposed studies would actually uncover heart risks.

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That’s the scuttlebutt making the rounds and also dutifully noted on In The Pipeline today. The drugmaker, which continues to grapple with a thin pipeline and looming patent expirations, is believed to be targeting chemists at its main R&D facility in Groton, Connecticut.

Of course, by eliminating the employees who are chartered with finding and developing drugs, Pfizer may just lessen the chance that its own R&D team will find the next big thing and end its troubles. This is, however, part of a trend we have noted previously. Total US employment in R&D fell by 3.9 percent in 2006, the last year for which data was available, to 79,856, according to PhRMA.

So what might this mean? Perhaps it signals an intention to buy other, smaller companies. Glaxo took such a step recently by cutting 40 percent of its research staff at some sites, just as a deal was announced to pay $720 million for Sirtris Pharmaceuticals, which is developing a fountain-of-youth pill. This comes down to betting more on someone else’s science than your own.

We asked Pfizer for a comment and will update you when one arrives. UPDATE: A Pfizer spokesman sent us this comment: “A leading R&D organization must evolve, continue to build on its strengths, capture competitive advantage wherever possible and be realistic about what it will take to return Pfizer to growth. What I can assure you is that if and when there are organizational changes, those decisions are never taken lightly. Our guiding principle is that colleagues hear about important Pfizer news from company leadership first and are treated with the utmost respect.”

The FDA’s Endocrinologic and Metabolic Drugs Advisory Committee will conclude today a two-day meeting to decide whether clinical trials to evaluate cardiovascular risks should be undertaken before the meds are approved or after marketing begins and the drugs are used by the population at large

And one non-voting panel member, Steve Nissen of the Cleveland Clinic Foundation, gave a presentation in which he proposed the FDA raised its standards by requiring drugmakers to prove new drugs don’t increase cardiovascular disease, Dow Jones wrote.

“Merely lowering blood glucose levels in diabetes is too simplistic. We must reduce the complications of diabetes, including cardiovascular disease,” Nissen said. “I don’t think it will have a chilling effect but, if we take drugs forward that lower blood sugar but increase the risk of death and heart attack, we haven’t done diabetics any favors.”

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In what may be a first, the drugmaker will still support continuing medical education courses at academic institutions, teaching hospitals and those supported by medical societies, but no longer directly support CME courses offered by for-profit medical-education and communication companies, Dow Jones reports.

Why? A Pfizer exec says by ending the payments, the drugmaker hopes to avoid the appearance of any conflicts of interest. As you know, industry-supported CME courses for doc have been under fire as ploys to promote meds, rather than purely educational events. Here is the Pfizer statement.

A Senate Finance Committee report last year concluded pharma used educational grants totaling $1 billion annually to increase market share, including promotion of off-label usage.

“The reason we’re not going to directly support them has to do with mitigating the perception of a conflict of interest, if a direct payment is going from a company like Pfizer to them,” Cathryn Clary, vp of US external medical affairs, tells Dow Jones, although Pfizer will continue to support academic and medical-society CME because “their primary mission is patient care.”

Pfizer spent a total of about $80 million last year on CME courses offered by companies and non-profit organizations, Clary adds, with less than half going to for-profit companies. In May, Pfizer began disclosing details of its educational grants on its web site (back story).

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Simple, yes? Men who have more sexual intercourse are more likely to avoid developing erectile dysfunction, according to a study in the American Journal of Medicine. In other words, the more you do it, the less likely you’ll need to buy Pfizer’s expensive little blue pill. Or any impotence pill, for that matter.

Analyzing a five-year study of 989 men aged 55 to 75 years from Finland, the researchers found that men reporting intercourse less than once per week at baseline had twice the incidence of erectile dysfunction compared with those reporting intercourse once per week. Further, the risk of erectile dysfunction was inversely related to the frequency of intercourse.

Other factors that may affect the incidence of ED, such as age, chronic medical conditions (diabetes, heart disease, hypertension, cerebrovascular disease and depression), body mass index and smoking were included in the analysis of the data, according to the researchers. Here is the abstract and here is the study.

Erectile dysfunction incidence was 79 cases per 1,000 in men who had reported sexual intercourse less than once per week, dropping to 32 cases per 1,000 in men reporting intercourse once per week and falling further to 16 per 1,000 in those reporting intercourse 3 or more times per week.

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After six days of deliberation, a federal jury in Kentucky found Melbourne Mills – who argued that he was too drunk to take part in a criminal conspiracy - not guilty of taking millions from his former clients in a $200 million fen-phen settlement, The Lexington Herald-Leader reports.

Mills, 77, who had to be hospitalized during the trial because of heart problems, had been in custody since August, when US District Judge William Bertelsman jailed him and co-defendants William Gallion and Shirley Cunningham Jr., saying they were too much of a flight risk, the paper writes, adding that the jury will continue deliberations today on the fate of Gallion and Cunningham.

The lawyers represented about 440 clients in a case against Wyeth, which withdrew two diet pills in 1997 and agreed to a global settlement. The three attorneys who represented diet-pill users in the Kentucky case are accused of plundering the payout. They allegedly received the bulk of the settlement - about $105 million - while the clients received $74 million.

Prosecutors say the three might have taken more of the money if they had not received a subpoena from the Kentucky Bar Association in February 2002 asking about the settlement money. Shortly after they received the subpoena, bank records showed that Gallion and Cunningham wired money from accounts in their name back into accounts designated solely for client funds.

Here’s the rest of the story…and here’s some background.

The drugmaker’s stock jumped more than 6 percent today after a federal court in New Jersey tossed a case brought against Teva Pharmaceutical, which hoped to sell a generic version of the best-selling antipsychotic.

The decision, which Teva plans to appeal, means AstraZeneca can avoid a lengthy trial that was scheduled to have begun next month and gain additional breathing room as it tries to develop new meds to replace those losing patent protection.

The US patent on Seroquel, which generated about $4 billion in sales last year and is AstraZeneca’s second-biggest seller, is due to expire in September 2011, although the drugmaker is seeking a six-month extension for pediatric use, which would take extend patent protection until March 2012.

Source: wire reports and company statements

Welcome back. We hope you feel refreshed this morning, which is quite a pleasant one here in the nation’s medicine chest. This is a short week, of course, in the US, but for those of you who not yet on holiday or confined to the usual routine, here are a few items to help you get through the day…

Roche Widens Focus On Primary Care (The Financial Times)

Pfizer Shareholder Suit Can Proceed (CNNMoney.com/Dow Jones)

J&J To Sell Wound Care Line (Yahoo/AP)

ExcelaPharmSci To Create 55 Jobs In North Carolina (WRAL.com)

HIV Meds Cut Death Rates (Bloomberg News)

A state court jury decided the two drugmakers defrauded Alabama in a long-running Medicaid drug pricing scheme and ordered them to pay more than $114 million in damages, the Associated Press reports.

The jury found that Glaxo should pay the state $80.8 million in compensatory damages and Novartis should pay about $33.7 million in similar damages. No punitive damages were awarded. The state sought $800 million in total damages in what its attorneys claimed was a scheme to overcharge Medicaid from 1991 to 2005, the AP writes. The drugmakers denied any fraud, contending they followed proper procedures in setting drug prices.

It was the second trial of the state’s lawsuits accusing more than 70 drugmakers of Medicaid fraud. In the first trial in February, a jury awarded the state $215 million against AstraZeneca, although that was later reduced to $160 million.