The majority of the panel found there was a greater risk of major adverse cardiovascular events (heart attacks, strokes, etc.) for patients taking Avandia than those taking other diabetes drugs. (It didn’t find an increase in mortality, however.)

During the meeting, GSK trotted out details from its RECORD study that supported its hypothesis that Avandia benefits Type 2 diabetes patients in the long run and does not cause an increase in risk.

The company also released a statement July 13 echoing what it had told the Senate Finance Committee and FDA months before: Avandia critics are cherry-picking documents that support their claims of increased risk of adverse cardiovascular events; furthermore, comparisons that favor Takeda’s rival diabetes drug Actos are invalid, since one of the studies did not compare the performance of the two drugs in regards to cardiovascular events.

The “trial” itself played like a game of statistics ping-pong, with different analyses and accusations of data manipulation batted around by both sides. The sheer number of trial design flaws worked in both parties’ favors, and the debate over which studies should be included in decision-influencing meta-analyses raged throughout both days.

But much of the damage to GSK’s case had already been done before the meeting: Reports of study coverups (in The New York Times, no less) and paper ghostwriting have been plaguing the company for months. And the company announced on Tuesday it would settle around 10,000 suits for a total of $460 million. The suits alleged the very problems Avandia critics have vocalized over the last several years.

One of the reviewers to recently join the critics was Thomas Marciniak, who blasted GSK’s lynchpin RECORD trial for not only being poorly designed, but also poorly executed. Marciniak found numerous instances of ignored or severely delayed reporting of cardiac events in Avandia patients. He also argued, in his slides, that he has no bias, as “neither [his] job nor (for [him]) hundreds of millions of dollars are riding on the results.” And, far from GSK’s claim that RECORD vindicates its drug, Marciniak said he found that the study does suggest Avandia increases the risk for heart attack.

FDA doesn’t have to follow the panel’s recommendation. But the agency’s ultimate decision on Avandia’s fate will be indicative of the direction commissioner Margaret Hamburg’s regime is taking: Will it lean towards getting—and keeping—as many drugs into the market as possible, or will it take the safer route of risk management?

Over the next two years, Merck will shut down eight manufacturing plants, as well as eight research sites, as part of the ongoing Schering-Plough merger process. The company said in a statement that the various site exits will help “create a flexible R&D organization.”

Taking a page out of Pfizer’s book (Pfizer announced plans to cease production at eight of its global manufacturing sites in late May), Merck said it would try to make the transitions as painless as possible, working with local governments and other manufacturers to sell the plants in the hope of keeping workers employed. Still, Merck expects the worldwide cuts to total 15 percent of its work force by 2012.

Two of the sites being phased out are in the US, seven are in Europe, with the rest scattered from South America to Canada. Sixteen worldwide R&D labs were spared, and the company said it will continue to focus on cardiovascular, metabolic, and infectious disease areas, as well as four others.

Merck is also hoping to find annual savings of $3.5 billion by 2012. In addition to creating a flexible R&D organization, the company will also save $2.7 billion to $3.1 billion as a result of this restructuring.

But in what is shaping up as a dramatically different sequel, a House Oversight Committee hearing revealed last week that J&J’s Tylenol-making subsidiary, McNeil, waited an entire year before notifying FDA that it had received reports of a “musty” smell in some of their children’s products. It came to light as well that the company had initiated a “phantom” recall for Motrin IB packets suffering from a dissolution problem—there was the possibility of reduced potency. McNeil contracted a third party to buy up the product; these buyers were encouraged to act like regular customers. FDA told them to start a real recall in July 2009.

This after more than a year of FDA identifying numerous quality-control issues with manufacturing practices at McNeil facilities. In general, FDA said, the company fixed these problems, but new ones kept cropping up—including gram-negative bacteria in unused ingredient lots and metal particulates in some liquid products. And so months of continued manufacturing violations and smaller recalls culminated the big one: an April 30, 2010 voluntary recall of 136 million bottles of liquid kids’ medicine.

Once thedr official recalls were issued, the company implemented its admirably efficient recall process, and FDA stressed in the hearing that it didn’t see a significant health risk to consumers in any of the products recalled.

The manufacturing problems, FDA said in the hearing, stemmed largely from McNeil’s corporate structure, and added that the company appears to be trying to right its listing manufacturing ship with management consultants, improved reporting structure, and other steps. Marcel Wijma, CEO of Van Leeuwenhoek Research, agrees with FDA: “The fact that this was not a one-time event says something about the managerial controls.” He said the first thing the company should do is consider swapping out its manufacturing heads. “Then they need to put their procedures up for discussion.” J&J worldwide consumer group chairman Colleen Goggins, who testified at the hearing, said several executives had indeed gotten the axe, but couldn’t give the Committee any names.

The issue of the phantom recall (and “delay in reporting material information”) “has been referred to the FDA’s criminal investigation unit,” according to FDA’s CDER compliance office director, Deborah Autor; but what, exactly, that means for the company and its executives was not revealed at the hearing.

Watch video of the entire hearing here.

The Indian pharmaceutical market is set to grow to $8 billion in 2010—thanks in part to an expanding middle class and the second largest workforce in the world. Generics are dominating the market at a 92 percent share, according to a study conducted by research firm RNCOS. Rather than set up shop and build brands—or even branded generic offerings—from scratch, attempting to squeeze into an already overcrowded space, acquiring an already-established company (like Piramal) is a more cost-efficient step. Abbott anticipates this move will put it at the top of the (very tall) totem pole on the subcontinent.

Piramal doesn’t yet have any proprietary drugs on the market, but it does have several candidates that have either completed or are near completion of Phase II trials. Two oncology targets are being developed with Merck as a partner; Eli Lilly is partner for two in the diabetes/metabolic arena.

In 2006, the company announced plans to save $4 billion to $5 billion, and after its merger with Wyeth last year, Pfizer reported that almost 20,000 employees would feel the effects of those cost-cutting measures. The 6,000 layoffs announced yesterday are part of the previously announced 20,000.

The cuts are part of Pfizer’s “reconfiguring” of its global plant network. Eight plants in Ireland, Puerto Rico, and the US will be shut down over the next several years, with the process concluding in 2015. Six other plants will see reductions in work force. The hardest hit sites were solid-dose factories—three of the eight site “exits” are in Ireland.

Ireland will, in fact, be particularly hard hit. The financially beleaguered island posted a national unemployment rate of 11.4 percent in 2009, and has a debt 13 times larger than its GDP, according to CNBC. Irish newspaper The Independent reports that as many as 785 Pfizer employees could be given the boot, though the government and Pfizer hope the subsequent sale of the factories will preserve some jobs.

The six plant reductions are a little more geographically diverse, including one in the UK and another in Germany, and three are biotechnology manufacturers.

While the company didn’t offer specifics on its decision-making process for the cuts, Pfizer VP of external affairs Ray Kerins said they looked for sites where they could increase efficiency, reduce cost, and eliminate capacity for plants not operating at 100 percent.

“We’re ensuring that production is meeting market demands,” Kerins said.

The Japan-based pharma first extended an acquisition offer of $52 per share ($3.5 billion) to OSI on March 1, only to be met with a resounding “Nay” from the board, which said $52 a share was a “very significant undervalue” of the company. Proceedings then got a bit dicey after Astellas filed a suit against OSI to prevent any use of a “poison pill” rights policy, and rumors swirled about a possible acquisition by Roche instead.

Now the two have come to terms; OSI CEO Colin Goddard is pleased with the appreciation the higher offer shows, and Astellas is pleased with its shiny new oncology pipeline. The company has recently been bucking for the title of “Global Category Leader in Oncology”—which is a steep task when you don’t have any oncology drugs in development. Astellas already has cardiology, neuroscience, immunology, and infectious disease covered, as well as urology and dermatology.

OSI currently has just one drug on the market: pancreatic and non-small cell lung cancer treatment Tarceva (erlotinib). However, that one product netted the company $428 million in 2009, and three others are coming down the late-stage pipeline.

OSI has until June 2 to accept the offer (a 16-day extension from the previous deadline), though Astellas had already acquired 229,214 shares as of May 14.

And for the first time in over 40 years, promising new drug candidates have appeared on the R&D scene. The candidates are designed to be effective not only against not regular TB, but also against multidrug-resistant (MDR) and extensively drug-resistant (XDR) strains of the disease, as well as those co-occurring with HIV. The drugs are expected to reduce treatment time to two months, as opposed to the current (40-year-old) six-month regimen for regular infections. Current courses for MDR are even longer, and just 1 percent of patients get the proper treatment.

But activist organization Treatment Action Group puts a $2 billion per year price tag on the R&D needed to bring these drugs through the pipeline, and current funding is well below that—75 percent below, according to Médicins Sans Frontières.

New vaccines, drugs, and diagnostics could reduce TB’s global infection rate by 71 percent by 2050. That may seem a long way away, but according to TB Alliance communications manager Joanna Breitstein, that’s the best case scenario. The current rate of reduction for the disease is just 1 percent per year, and without advances in technology and drugs for MDR TB, the rate is likely to stay the same. That’s even grimmer news when you take into account population growth: reduction becomes negligible.

On the plus side, there was a general increase of almost 100 percent in public financing of health worldwide, according to an April article in The Lancet. The exception? Sub-Saharan Africa, where government spending actually decreased. The region has an extraordinarily high infection rate, partially due to the high incidence of HIV/AIDS in the population.

Our magazine is called Pharmaceutical Executive—indicating a focus on the c-suite. But we know many of our readers aren’t executives (yet), and may not have quite the same in-depth knowledge as their bosses. So, for those who hear the term “SaaS” bandied about in conversations and fake their way through discussions about it despite not quite understanding what, exactly, it is, we present: A Beginner’s Guide to SaaS. (Those who do know are hereby dismissed.)

Software-as-a-Service (SaaS) is sort of a misleading term, as it’s not software in a traditional sense. It uses a web-based system and off-site computers—run by another company and operating in a “cloud” that is basically the internet—to collect and sort data and turn it into actionable intelligence. In pharma’s case, this would be the basis for sales force automation (SFA). Sales reps input call notes and set up calls and look at their doctors’ latest prescribing habits through this program. Line and bar graphs, sorted lists with prescribing percentages and past performance not only give reps a leg up, but let their managers keep an eye on them.

The advantages of SaaS are pretty clear: Your company doesn’t have to maintain a huge server farm and large IT department, and the company providing the service is the one that worries about fixing bugs and automatically upgrading the software. Matt Wallach, EVP and general manager of SaaS provider Veeva Systems, says it’s the difference between owning a condo or townhouse, in which you pay fees associated with homeownership and have to mow your own lawn and salt your own sidewalk, and renting an apartment, wherein you’re not responsible for any of those things. Furthermore, customization is a breeze, as customers can suggest features of their own or turn others on and off, with very little turnaround time.

Ed Gemo, Pfizer’s senior director of global SFE/marketing solution center, said switching from the “Excel and paper” model to SaaS can reduce costs per rep $3,000 or more, and Wallach said companies can expect total initial savings of $100K, plus $20K each subsequent year.

And it’s not just a way to cut costs—sales effectiveness can see a big boost from something as simple as a better-prepped rep. As Gemo said: “We’ve always had this data, but we’ve never had a good way of using it until now. Instead of listening to a customer’s needs, we just kept repeating old messages. We just screamed louder.”

SaaS may seem like a “duh” concept, especially since other industries have been using it for 12 years or more. But the far stricter regulations placed on pharma’s sales forces, and the industry’s special breed of mistrust, made SaaS adoption supremely unattractive.

Then technology advanced enough to allow for rapid deployment of new features in response to regulation and policy changes, and pharma saw the risk decrease. At least 90 percent of companies’ customer relationship management teams are using SaaS now due to this marriage of tech and trust.

Still, the SaaS world has remained divided into segments: a company would use one provider for SFA, another for closed loop marketing, yet another for sample accountability and distribution, and so on. Veeva Systems announced this week it’s developed an application network—Veeva Web—integrating its original-flavor system with ones from Exploria, QPharma, and TerrAlign in an attempt to create the Holy Grail of life-sciences SaaS. “We’re looking to eliminate the cost of system integration,” Wallach said.

That pharma mistrust hasn’t completely abated, though, and many companies are waiting to see if this is, in fact the Holy Grail, or if it’ll be another case of dashed hopes.

Part of the blame for that 4 percent difference, the company said, lies with the passage of the US healthcare reform bill, which cost the company $60 million in higher Medicare price rebates. While CEO John Lechleiter was careful to laud the bill’s positive effects—more affordable meds for seniors, better access for the uninsured in general—he said Lilly “will incur substantial costs” to its business. Some of those costs will come from increased development fees, some from higher taxes, and yet others from patent losses.

Other members of the Big Pharma club have yet to announce their Q1 earnings—many will release their numbers next week—but a report by Express Script gives cause for caution.

Higher drug costs increased total spending 6.4 percent from 2008 to 2009—an increase tempered in part by patent expirations, since the price of branded drugs shot up 9.1 percent.

The industry is already seeing a shift toward the development of more specialty drugs, and the report supports that move with the reveal of a 19.5 percent spending increase in that area. This includes biologics, a niche in which companies should tread carefully now that healthcare reform has provided an approval pathway for biogenerics.

But after a slight reprieve in 2011, Express Script expects price growth to cross into negative territory again after Effexor (venlafaxine), Lipitor (atorovastin), and Seroquel (quetapine) go off-patent.

The TIDE trial, which received approval in 2007, pits Avandia (rosiglitazone) against Takeda’s Actos (pioglitazone), a drug that as yet hasn’t suffered from the same safety pitfalls. But with recent allegations of Avandia-research related misconduct from the Senate Finance Committee, and renewed unease about the drug’s safety profile, some researchers are wondering if the study places its subjects in harm’s way.

Glaxo has denied any suggestion of danger, and points to the study’s FDA-mandated structure and approval by ethics committees around the globe as proof of its safety and necessity. The company will have to wait until a July hearing to learn the fate of the trial—and possibly the drug itself, since further safety concerns in a study like this are inextricable from the drug’s safety profile, according to FDA’s principal deputy commissioner, Joshua Sharfstein.

But GSK can take some small comfort in the fact that it’s not alone: Pfizer received a warning letter just this week over one of its trials for antipsychotic Geodon (ziprasidone). The trial’s goal is to explore the drug’s use in bipolar children, but so far at least 13 of those subjects received enough medication to trigger an overdose, and the letter calls Pfizer out for failing to properly monitor the children. This comes after last year’s $2.3 billion settlement with the Department of Justice over illegal promotion of four drugs, including Geodon.