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.

FDA Commissioner Margaret Hamburg announced, on Thursday, a new joint initiative between industry, FDA, and non-profit organizations designed to fast-track modern combination treatments for tuberculosis. Where once it took more than two decades to create new therapies for TB, this collaboration is expected to produce working treatments in less than six years, providing much-needed help for people developing nations.

Dubbed the Critical Path to TB Drug Regimens, this program will enable different stakeholders to share new compounds and ideas in an effort to shorten the time it takes to develop new multi-drug therapies. The initiative is spearheaded by the Bill & Melinda Gates Foundation, the Critical Path Institute, and the Global Alliance for TB Drug Development, with partners including members of FDA, the World Health Organization, Johnson & Johnson, Sanofi-Aventis, and Pfizer.

“FDA is absolutely committed to working with industry and other partners to speed access to new, safe, and highly-effective treatments for TB, which continues to mutate and spread,” stated Hamburg in a release. “I’ve seen first-hand the public health impact and personal tragedy of drug-resistant TB. This creative approach mirrors FDA’s own investments in innovative regulatory science that ensures the best new medical technologies—including combination therapies—reach patients as soon as possible.”

According to TB Alliance President and CEO Mel Spigelman, the catalyst for this collaboration was a critical mass of raw materials or substrate in the pharma pipeline.

“The real issue for TB has been that it’s a truly neglected disease, and until not that long ago no one was working on new drugs even though there was a clear need for it,” Spigelman said in an interview with Pharm Exec. “We presented this idea five years ago, but there simply weren’t enough compounds to work with.”

There are now nine compounds in clinical development for TB. This critical path is intended to get one or more new regiments registered and adopted as soon as possible.

What makes TB drug development so complicated is that treating the disease with a single drug almost always leads to treatment resistance (sometimes within as little as two weeks). While patients might feel better in the short term, the disease never really goes away. To completely defeat the TB, patients must be treated with a regimen of multiple drugs or a drug cocktail.

Traditionally, a company looking to add new drugs to a treatment regimen would have to spend a minimum of six years in testing. A Phase III study alone could take four years to show results. A pharma company trying to develop a cocktail of four treatments could feasibly spend up to 25 years testing each drug.

“Whether the combination happens to have one new drug in it or four new drugs, you are really testing that combination once you get beyond two weeks,” Spigelman said.

About two years ago, the TB Alliance began reaching out to different partners for research purposes and to look at combination of different drugs in animal models. The organization formed bilateral agreements with multiple sponsors and brought them into the initiative one by one to work with academic collaborators on testing preclinical combinations.

“We’ve already identified, in mice, at least 10 different regimens that look much better than the standard treatment,” Spigelman said. “That’s a building block that helps forge the pathway in the clinic.”

This type of approach could also be translated to other diseases such as malaria. HIV had a similar critical path in the 1990s, when a number of pharma companies share d  knowledge  as a springboard to get combinations developed more quickly.

Jacky Law

Pharma companies are responding swiftly to the recent earthquake in Haiti with millions of dollars in cash and drugs. GlaxoSmithKline boasted, for example, that its initial $1.2 million offering of medicines — mainly oral and topical antibiotics — was on the first airlift to the Caribbean island and that more will follow.

The UK company was not alone. By January 15, the charitable alliance, Partnership for Quality Medical  Donations (PQMD), said a total of $15.5 million (E10.8 million) had been pledged by pharma and other healthcare companies. This comprised $7.3 million in products and $4.6 million in cash, equating to one third of all corporate donations and being roughly equivalent to the £10 million pledged by the UK government.

Some pharma companies, notably Abbott Laboratories, have even been able to use the humanitarian disaster to demonstrate an altruism that extends far beyond this immediate crisis. Together with its philanthropic foundation, the Abbott Fund, the company has pledged an initial $1 million in cash and medicines to the victims of the earthquake, which comes on top of more than $34 million already donated to Haiti since 2007. The current package includes $100,000 in grants to three of its aid partners: the American Red Cross, Partners in Health and the Catholic Medical Mission Board. The company is also working with AmeriCares, Direct Relief International and other organizations to identify what drugs are most needed by the survivors.

Other biopharm companies to have responded to international calls for help include Amgen, which has said it will donate $2 million in cash. Pfizer, which has a base in the neighbouring Dominican Republic, is working with people on the ground to assess what drugs are most needed. It has also made an undisclosed cash donation and pledged to match employee contributions to the disaster fund.

Merck & Co, meanwhile, is giving $350,000 in cash and has also pledged to match employee contributions while planning an immediate shipment of $200,000 worth of medicines, including its ulcer drug, Pepcid, Coricidin cold medicine and ringworm treatment, Lotrimin. Eli Lilly is said to be donating $250,000 in cash and will match its US employees’ contributions. Bristol-Myers Squibb has shipped out a consignment of medicines, mainly antibiotics and analgesics, and donated $200,000 plus a pledge to double what its US employees give. And AstraZeneca has donated antibiotics and respiratory medicines while also giving £100,000 ($162,500) to the British Red Cross effort on the island.

Help or hindrance?
However, the lesson of Johnson & Johnson is that such generosity can be seriously undermined if it coincides with other news that doesn’t go down so well with the public.

According to PQMD, J&J is giving unspecified cash donations to relief organizations working in Haiti, as well as bandages and medicines such as Tylenol and Neosporin. But things have taken a rather sinister turn for the US company that for years has been one of the most trusted in the world. On Friday, January 15, at roughly the same time it was pledging aid for Haiti, the company’s over-the-counter (OTC) division, McNeil Consumer Healthcare, announced the recall of several hundred batches of various popular OTC medicines, including the analgesic Tylenol. This was because of a foul odour emanating from the breakdown of a chemical used to treat the wood pallets used in the storage and distribution processes. It may well be that the Tylenol on its way to Haiti is perfectly fine but the juxtaposition of events only serves to highlight the PR disasters currently plaguing this once exemplary company.

Not only did an FDA warning letter arrive on that Friday saying McNeil had known about the problems for as long as 20 months but, in an entirely separate incident, and on the same day, the US Justice Department filed charges against Johnson & Johnson for allegedly paying “tens of millions of dollars in kickbacks” to nursing home pharmacy company, Omnicare, to increase sales of its drugs, notably the blockbuster antipsychotic Risperdal.

Regarding this latter incident, Johnson & Johnson has said its actions have been “lawful and appropriate” and it looks forward to “airing the facts” in court. Nevertheless, two ‘bad’ stories coming together have the effect of compounding each other, which can cancel out the effect of one ‘good’ act if it also comes at the same time. This is because the point of altruism is to help unreservedly or, at least, for the actions to be perceived that way. Any question that a drug to relieve suffering might be tainted is not helpful.

J&J received a violation letter in response to a journal ad for its topical anti-inflammatory cream Ertaczo, emblazoned with the words “Crush. Kill. Destroy,” in large, orange letters. FDA states that the company is way off-base in touting total annihilation of athlete’s foot, rather that a decrease and potential for cure.

“Although [trial] results show modest effectiveness, they clearly do not support the claims that Ertaczo ‘wipes out’ or crushes, kills, and destroys tinea infections,” DDMAC wrote in the letter.

FDA also took issue with the suggested claims that Erataczo is approved for all patients. In fact, the drug is not approved for patients less than 12 years old.

Allergen got an even harsher letter, stating that its journal advertisement for the acne gel Aczone is a complete misrepresentation of the results of a clinical study, and that the ad “grossly overstates the efficacy of the drug by presenting only the most favorable result for Aczone.”

The ad stated that patients could see a reduction in acne by as much as 24 percent in two weeks. The study FDA is referring to showed that at two weeks, patients showed only a 2 percent decrease in inflammatory lesions.

Finally, Galderma received a warning letter regarding professional visual aids for its skin discoloration cream Tri-Luma. According to DDMAC, the ads “suggest uses for Tri-Luma that have not been approved by FDA, and thus create new  ‘intended uses’ for the drug for which the product lacks adequate directions, broaden indication for Tri-Luma, and omit and minimize important risk information for the drug.”

• Total price of the sale will be $41.1 billion or $23.6 per Schering share.

• This deal is structured as a reverse merger with Schering being renamed Merck. This is being done to avoid triggering a loss of rights, according to Merck.

• To pay for the merger, Merck is taking out a $3 billion 364-day bridge loan  and adding $5.5 billion in revolving credit. The company will be fronting $9.8 billion in cash, and another $22.8 billion will stem from merck stock.

• Schering share holders will own 32 percent of the new combined company, while Merck shareholders will  own 68 percent of the company.

• Joint company expects to save approximately $3.5 billion by 2011.

• There will be a job freeze for both companies beginning this morning.

• Complete transaction by Q4 2009.

• Remicade distribution rights between Schering and Johnson & Johnson are not expected to be in question, but Merck is prepared in case of legal problems. Question as to whether there will be a change of control.

• Synergies have not been defined beyond potential savings.

• Very little overlap in compounds with the exception of two late-stage programs in Hepatitis C and one other.

• Merck will gain access to Schering’s massive animal health product portfolio.

• Joint company will reside at Merck’s Whitehouse Station, New Jersey location.

Johnson & Johnson: A perennial member of the Top Four, J&J defies the conventional wisdom; it’s a big company that still manages to grow, a sprawling, diversified company that still has focus. And along with just three other companies on our list, it created shareholder value in 2007. Bill Trombetta explains how.

Reporting to you from Chicago at the Sixth Annual Healthcare Businesswomen’s Association leadership conference, where the story—set in this city of the new US President—is all about change.

The Pharm Exec crew arrived in a surprisingly tranquil Windy City—the only explanation that it was the calm after the storm of Tuesday’s election. Certainly, many HBA members had been up all night watching the election, with a dozen members who took to the streets and joined the rally for Barack Obama at Grant Park.

“It was like being at Woodstock,” said Nancy Larsen, President of PROmedica Communications, who was part of a group that attended the rally. “Even though we were standing shoulder-to-shoulder in this massive crowd, it felt serene to be with all these people—it gave me goose bumps.”

“It’s not watching history—it’s actually being a part of it,” said Eve Dryer, Principal and President of Vox Medica Public Relations.

Yet even with the election front-and-center in the nation’s consciousness, executives here seem more focused on pharma’s patent cliff crisis and the latest round of layoffs, instead of major healthcare reform.

“We get the sense that there is some pent-up demand for talent,” said one attendee. “We think people might begin hiring after the election—we’ll be able to tell by year end if that is happening. People may begin hiring because we don’t get the sense that Obama will get to healthcare first.”

The focus of the conference is leadership development, and many conversations and presentations were peppered with concern over how tough times will affect careers in pharma, particularly for those who have been traditionally underrepresented.

“Many of the banks were at the forefront of setting up on-ramping and off-ramping career tracks for women—they had to—and really paved the way for other industries,” said Meryl Zausner, CFO of Novartis. “But now, those efforts will be hampered.”

Still, it seems that many companies are trying their best with programs to bring up women and other minority groups. Novartis CEO Ludwig Hanston accepted the HBA’s 2nd Annual ACE Award on behalf of the company for  its Empowering Women Impacting Novartis and Women in Leadership program.

Meanwhile, Johnson & Johnson (the 2007 ACE Award winner) had a chance to take the stage to talk about how it is seeking to expand its workplace program for women, all 60,000, with new efforts to focus on its European affiliates, sales force in Japan, and even to its group in Cape Town, South Africa while Adrian Sax, who heads business development for King Pharmaceuticals, spoke about the grassroots efforts for inclusion happening at smaller companies.