Lundbeck has been presented with the first award for ethical leadership in the pharmaceutical industry by the legal action charity Reprieve.

The charity selected Lundbeck after it introduced measures to prevent the misuse of its medicines in relation to capital punishment in the US.

Maya Foa, Reprieve Investigator, said Lundbeck’s measures have “changed the landscape of corporate social responsibility in the pharmaceutical industry”.

Upon receiving the award, Lundbeck also became the first company to sign a new pharmaceutical Hippocratic Oath, pledging its commitment to medical ethics and corporate social responsibility.

Danish-based Lundbeck first learned of the misuse of Nembutal (pentobarbital) in a number of US prisons in January 2011.

Nembutal was developed for the treatment of severe epileptic seizures and was marketed in the US by Lundbeck.

After it learned it was being used in prisoners sentenced to death by lethal injection, it adamantly opposed the misuse and informed authorities, governors and public organisations of its objection and called for its use to be stopped.

In addition, it also consulted with NGOs, public authorities and external experts to identify possibilities to prevent future misuse of the medication.

Lundbeck then established a distribution program that ensured hospitals and other clinical centres could continue receiving the treatment for medical purposes but prisons conducting the death penalty by lethal injection would no longer do so.

“Many pharmaceutical companies lament the use of their medicines in executions – Lundbeck did not just lament it, they took active steps to prevent it,” said Maya Foa. “In short, they were true to the values of their profession, and the award is testament to their efforts.”

Roche has increased its offer for Illumina by $1bn after holding discussions with the company’s major shareholders.

Days after extending its original $5.7bn cash offer, Roche has increased its price per share from $44.50 to $51 after seeing Illumina refusing to change its dismissive stance.

Franz Humer, Roche Chairman, said in a letter to Illumina CEO Jay Flatley that “we have had a number of productive discussions with Illumina’s shareholders and we have observed the market reaction to our offer”.

The San-Diego-based company has now told shareholders not to take any action on the revised offer insisting it will “thoroughly review” the new proposal.

The pharmaceutical giant has been searching to increase its development of target therapies for cancer treatments. Illumina’s gene sequencing technology would help the Swiss-based company progress in this field.

It has already made two unsuccessful hostile takeover bids for the company but analysts predict its latest offer could see a deal completed in as little as two months.

“It was certainly triggered by discussions with the biggest shareholders,” said Martin Voegtli, analyst at Capital Markets. “The top seven hold 55 percent, so $51 is probably the consensus amongst them. Now the pressure on the Illumina board and management is increasing and that’s a big step towards speeding up this deal.”

The seven biggest shareholders in Illumina are Capital Research Global Investors, Baillie Gifford & Co, Sands Capital Management, Morgan Stanley Investment Management, Jennison Associates, AllianceBernstein and Edgewood Management.

The latest offer includes the same deadline of 20 April for a decision – two days after the Illumina AGM, where Roche aims to gain control of its board of directors.

Boehringer Ingelheim has reduced the UK price of its oral anticoagulant Pradaxa (dabigatran etexilate) by 13%, two weeks after receiving NICE recommendation.

While NICE had judged Pradaxa to be cost-effective for stroke prevention in patients with atrial fibrillation (AF) at £2.52 per day, the new price of £2.20 will increase its appeal to prescribers.

The timing of the price change reflects growing industry awareness that NICE approval is only a step on the way to meeting the value criteria of the NHS.

The final NICE guidance recommended that Pradaxa be considered for the prevention of stroke and systemic embolism in adult patients with non-valvular atrial fibrillation (AF) with one or more risk factors, a potential 900,000 people.

The price drop will help to drive access to the first new oral anticoagulant for stroke prevention in patients with AF in 60 years.

According to a recent BMJ report, drug therapy for stroke prevention in patients with AF is sub-optimal in many cases. Up to 30% receive no treatment, a significant proportion of those treated with warfarin are not well controlled, and treatment with aspirin is not adequate.

There is therefore a large unmet need for effective stroke prevention treatment in these patients, whose risk of stroke may be significantly reduced by Pradaxa.

Duncan Cantor, Boehringer’s Director of Communications, said: “We are committed to working with the NHS to offer the very best value we can. Although NICE deem Pradaxa to be cost effective at £2.52 per day, we believe it is important to make our medicines as affordable as possible in this tough financial climate.

“By lowering the price by 13% to £2.20, the NHS now has every opportunity to make sure this medicine is available to all eligible patients.”

Shares in Amylin Pharmaceuticals doubled (54%) in price after it was revealed the company rejected a $3.5 billion takeover bid from BMS in February.

Two people with knowledge of the offer revealed that Amylin’s board rejected BMS’ $22 a share acquisition offer with analysts now predicting bids from other pharmaceutical suitors.

Robyn Karnauskas, an analyst with Deutsche Bank, says the San-Diego based company may be worth as much as $31 a share after it received regulatory approval for its diabetes drug Bydureon in January 2012.

Amylin saw its shares close at $23.77 in New York, the biggest single-day increase since August 1999.

Analysts now predict that Amylin could be set for further bids from the likes of AstraZeneca, Sanofi, Takeda and Merck.

“The question is who can extract the most value, because this is all a commercialisation story from here,” said Joshua Schimmer, an analyst from Leerink Swann.

It’s believed that BMS has not approached Amylin with a further offer since its initial bid letter, people familiar with the matter said.

Amylin is believed to be searching for a new marketing partner for its products outside the US and is in discussions with a number of interested parties, sources said, after its decade-long collaboration with Eli Lilly ended in November 2011.

It recorded $650.7 million in revenue last year, had nearly half-a-billion dollars ($496m) in long-term debts, a $924.3 million promissory note related to revenue sharing, and $204 million in cash, equivalents and short-term investments, according to a statement published around the same time as BMS’ offer.

Merck & Co has appointed Michael J. Holston as its Chief Ethics and Compliance Officer as of June 25, 2012.

Holsten, an experienced business lawyer, will serve on Merck’s Executive Committee and be responsible for driving ethical standards and compliance for the company on a global basis.

He succeeds Richard S. Bowles, who is retiring after more than 35 years with Merck and the former Schering-Plough (which merged with Merck in 2009).

Holston joins from Hewlett-Packard, where as Executive VP and General Counsel he was responsible for overseeing compliance, government affairs, privacy, ethics operations and legal affairs.

Previously, he was a partner at law firm Morgan, Lewis & Bockius LLP, where he served as external counsel to Merck on product litigation and regulatory compliance.

Merck CEO Kenneth C. Frazier said: “We are delighted to welcome Mike as our new chief ethics and compliance officer. His extensive experience managing compliance with healthcare laws across international businesses and his background with Merck and our industry make Mike a terrific leader for our ethics and compliance organisation and a member of our Executive Committee.”

Frazier also praised Richard S. Bowles: “His strong leadership established the global compliance organisation for the combined new company following the merger with Schering-Plough.”

Hosten said he was “excited to be joining Merck at this important period of change for the company and the pharmaceutical industry” and looks forward to “helping to champion Merck’s high ethical and compliance standards so the company can focus on what it does best – discovering and developing innovative new medicines and vaccines.”

Merck is known as MSD outside the US and Canada.

This month’s Pharmaceutical Field looks at some of the major issues affecting UK pharma at present; the evolution of its customer-base, an increased focus on compliance, the developing training needs of medical sales professionals and pharma companies’ ongoing challenge to attract and, crucially, retain talent.

The DH’s Innovation Health and Wealth document, published at the tail end of 2011, seeks to address the most significant challenge for UK healthcare – accelerating the adoption of innovation within the NHS. There is much that pharma can do to help enable innovative medicines reach patients more quickly.

Regulatory compliance remains a key priority for pharma as recent and impending global legislation puts pharma’s engagement with customers under increased scrutiny. In the process, the changing legislative landscape is having a significant impact on the training needs of medical sales professionals in the UK. This, in turn, is having a domino-effect on the pharmaceutical employment market, where a notable ‘skills gap’ is having a huge impact on recruitment and the quality of applicants for commercial roles.

Faced with an apparent dearth of quality candidates for sales positions, companies are needing to work hard to create the best working environment to retain their most talented employees. Pf’s annual attitudinal survey of the UK sales force reveals that, in some parts of the industry, there remains much to be done to ensure that the company culture advertised in the corporate brochure matches that experienced by employees in the workplace.

Improving regulatory compliance in the wake of global legislation around anti-corruption has emerged as one of pharma’s key challenges for 2012.

A 2011 Cap Gemini report on impending change within life sciences showed that only addressing ‘fragmented business processes’ and a ‘lack of access to business critical data’ rank higher as the most critical issues for the sector.

But despite widespread recognition of the importance of business transparency in all interactions with customers, a recent study shows that 44% of pharma companies are still using manual paper-based systems to record promotional spend with HCPs.

The survey, European Trends in Aggregate Spend, Transparency and Disclosure, conducted in December 2011 by Cegedim Relationship Management, shows that life science companies are making real progress in their attempts to become more compliant. 94% of respondents report that their company enforces corporate standards for spending on HCPs, and over half (54%) indicate that their company already has a project team in place to address compliance issues.

But, despite 64% believing that the implementation of a unique spend data reporting and disclosure solution is an ‘absolute requirement’, a high number of European companies are using traditional methodology to record activity.

“Europe is at a pivotal moment as it approaches an enforcement model increasingly similar to the US,” explained Bill Buzzeo (pictured), Vice President of Global Compliance Solutions at Cegedim Relationship Management. “Companies are making essential strides at self-enforcement, but according to the 2011 survey, most respondents are reliant on inefficient manual and Excel spreadsheet reporting mechanisms.”

Faced with managing relationships within an already complicated customer jigsaw, medical sales professionals can ill afford the administrative burden of paper-based systems in the modern era.

The increased focus on transparency and disclosure follows the global development and enforcement of regulation and guidance to counter bribery and corruption across business sectors. The US Foreign Corrupt Practices Act and the UK Bribery Act impose criminal charges on companies that breach the law, and have already led to some high-profile casualties in the life science sector. In 2011, Johnson & Johnson were fined $70 million after admitting that the company bribed doctors in Europe and paid kickbacks to win contracts and sell drugs and artificial joints. Integrated technology company Siemens paid $1.3 billion following a bribery case that scarred its medical division, following violations in its healthcare unit.

With further, hard-hitting legislation expected in other parts of Europe this year, companies are being forced to assess their ability to achieve better transparency of aggregate HCP payment data – which in turn is having major implications for the industry’s sales and marketing strategies. Companies in Europe must not only track a complex matrix of marketing and promotional spending, but also keep track of, and uphold, each country’s unique reporting standards.

The Cegedim Relationship Management survey concludes that the US model of operational compliance serves as “the handwriting on the wall”, but warns that European organisations, uncertain as to how to approach transparency in the future, must act quickly to ensure they avoid paying a much higher price.

The UK industry has worked hard in recent years to improve its reputation with customers, and the issue of building trust with HCPs remains a high priority for companies. Medical sales professionals will continue to play a prominent role in achieving this.

Tighter medical device regulation could not have prevented the PIP breast implant scandal, according to a UK regulatory lawyer.

Regulatory processes cannot defeat a deliberate violation of the law, such as the French company PIP’s use of industrial rather than medical grade silicone, Dev Kumar of law firm Bristows commented.

Meanwhile, a Commons Health Select Committee has challenged the NHS decision to provide only PIP implant removals but not replacements, on the grounds that it forces patients to undergo an avoidable follow-up operation.

The PIP implant scandal has rocked the European medical device industry and led to calls for tighter regulatory controls and better surveillance.

This coincides with changes to the European regulatory framework for medical devices arising from other scandals, including the high failure rate of metal-on-metal hip implants.

“The House of Commons’ Health Select Committee’s report on the PIP breast implants has once again brought the medical device regulatory system to the forefront of everyone’s attention,” said Dev Kumar.

“The report, which also mentions the safety concerns of metal-on-metal hip implants, suggests that the CE mark requirements and regulatory framework are strengthened.

“The timing of the PIP case and Select Committee report are all the more relevant as they have surfaced at a time when the European Commission is drawing up proposals to revise the regulatory system for medical devices. Currently, these include plans to improve and strengthen the regulatory framework through the introduction of measures for more pre-market testing and post-marketing surveillance.

“However, the PIP case concerns a company that intentionally chose to use an industrial, as opposed to a medical grade, silicone filler. No regulatory system, however robust, can guarantee against a further incident of this nature occurring if there is deliberate intent to circumvent the law.”

The question of how the NHS should assist patients who received PIP implants from private clinics remains contentious. Current NHS policy is that such patients can have the implants removed, but not replaced, on the NHS if the clinic will not help.

However, a Commons Health Select Committee argued that to save patients from being operated on twice, the NHS should remove and replace the implants but impose a charge of about £1,500 for the latter procedure.

The DH responded by saying that requiring patients to pay for an NHS treatment would set a dangerous precedent.

Six pharmaceutical companies have gone into partnership with Newark and Sherwood Clinical Commissioning Group to create an innovative project to improve care for patients with chronic obstructive pulmonary disease (COPD).

PANNASH, The Pulmonary Advancement Network for Newark and Sherwood Health, will see Pfizer, GSK, Boehringer Ingelheim, Teva UK, AstraZeneca and MSD work together with the local acute trust, community providers and patients to improve care services.

Lisa Green, Assistant Chief Operating Officer, Newark and Sherwood CCG said the “additional support and expertise” in working with pharma “can help us achieve our goals”.

The primary aim of the project is to help people with COPD in Newark and Sherwood to better manage their condition, access services closer to their home and reduce emergency hospital admissions.

The prevalence of COPD in the region is higher than the national average due to a history of mining in the area. It is estimated that there are around 1,000 people living in the area with the condition, but who are yet to be diagnosed.

In 2010, 227 patients in the region were admitted to hospital suffering from an exacerbation of their COPD. Many of these were readmitted as a result of their condition.

COPD plays an integral part of the QIPP agenda for Newark and Sherwood CCG. PANNASH will run until July 2012.

Attracting and retaining talent is a major challenge for UK employers. The battle to increase productivity while delivering cost-efficiencies is driving change in companies’ employee benefit strategies. Pf provides an overview of employee benefits.

Popular HR wisdom, backed up by respected psychologists and employment commentators, suggests that money is not generally the main motivator for employees. Satisfaction in the workplace depends on much more than our annual salary and, according to American psychologist Abraham Maslow, is only one of many ‘hygiene factors’ that determine whether or not we are happy at work. Maslow’s Theory of Human Motivation included his acclaimed ‘Hierarchy of Needs’, which outlined the most fundamental requirements for human satisfaction. It was written in 1943. Despite vast societal and technological evolution since then, its most salient messages still appear to resonate today.

The concept of benefits beyond salary is cemented into the modern workplace. ‘Employee benefits’, defined by the Chartered Institute of Personnel and Development (CIPD) as “non-cash provisions within the pay and benefits package, although they have a financial value or cost for employers”, have traditionally been regarded as a vital component in staff retention. In many cases they have been considered a moral obligation for employers.

In the 1970s, employers increasingly looked towards developing more generous benefits packages rather than rewarding employees via basic salary. But in recent years, as tax legislation has tightened its grip on non-cash provisions, the attraction of certain benefits over salary has been diluted. In response, employers have begun to adopt a more individualistic approach to how employees are rewarded and transferred more of the risk – and cost – of benefits onto their workers. For example, the days of final salary pension schemes are now all but over and have been replaced by the offer of money purchase plans for employees. At the same time, more employers are moving from fixed benefits to flexible and voluntary arrangements.

There is little doubt that the global economic downturn has had a demonstrable impact on the employment market and, by association, the employee benefits landscape. Across the board, companies are adopting a twin focus in which they are trying to balance a drive for productivity gains against the need to deliver cost-efficiencies. As such, employers need to attract and retain talent but, at the same time, secure the best possible return on investment with their human resource. Sustaining staff motivation and employee engagement during turbulent times is a major challenge for modern businesses. Benefits are, of course, one of the key weapons employers have at their disposal to address employee engagement; but with a widespread determination to control costs, companies are needing to be more creative in how they shape employee benefits packages.

Total rewards
The past year has seen a significant shift in the way companies are designing and presenting benefits packages to employees. According to a survey carried out by the UK magazine Employee Benefits, there is a growing trend towards the use of ‘Total Reward’ strategies among British companies. The poll, conducted in March 2011, showed that 45% of respondents received a benefits package that had been presented to them as a Total Reward scheme – an increase from 29% in 2010. CIPD defines Total Reward as a concept that “encompasses all aspects of work that are valued by employees, including elements such as learning and development and/or attractive working environment, in addition to the wider pay and benefits package.”
Total Reward is considered to be distinct from Strategic Reward, which, according to CIPD, is based on “the design and implementation of long-term reward policies and practices to closely support and advance business or organisational objectives, as well as employee aspirations.” But, says CIPD, strategic and total reward may often work in partnership. “An organisation might adopt a total reward approach encompassing the provision of both cutting edge training programmes together with flexible working options – as well as more traditional aspects of the pay and benefits package, in order to recruit, retain and motivate the high quality staff that are best placed to help it secure its business objectives.”
Changes to benefits packages are being driven by market dynamics in the wider business environment. The Employee Benefits 2011 survey identified the following issues as being instrumental in determining benefits packages last year:

• Improving the perceived value of the benefits package.
• A drive to control costs across the organisation.
• Making benefits expenditure more cost-effective.
• Matching benefits to employee need.
• Ensuring benefits are competitive
• Improving the effectiveness of the benefits package.
• Harmonising benefit terms and conditions across the organisation.
• Drive to reduce costs across the organisation.
• Managing pension costs or deficits.
• Encouraging pension scheme take-up.

These findings illustrate a diversity of considerations for managers responsible for employee benefits, and highlight the tensions between fixed, flexible and voluntary arrangements – as well as the challenges of balancing individual rewards for star performers against the desire for an organisation-wide template.

Feeling the benefit
Traditionally, employee benefits packages generally comprised the usual suspects: pensions, paid holidays and company cars. But today, the benefits market has expanded to include a wide array of arrangements that match the changing needs of modern society. So what kinds of benefits are included in a contemporary Total Rewards plan? The most common benefit is Life Assurance/Death in Service, which seems to be offered to all employees by the vast majority of employers. Alongside this, and perhaps in line with the thinking behind a Total Reward approach, most companies consider training and development to be an employee benefit and, again in the main, provide it to all members of staff. It is arguable whether employees themselves regard this as a significant benefit or simply as a natural and expected aspect of any job of work.

Behind Life Assurance and training and development, the Employee Benefits survey showed that more than two thirds of benefits packages (70%) include counselling/Employee Assistance Programmes (EAPs) – a benefit that appears to reflect modern demands in an era where many individuals are burdened with high levels of debt and stress, as well as being exposed to increasing instances of redundancy. The survey’s authors say that EAPs have now become a mainstay of many employers’ core benefits, having grown in popularity in the past few years. In 2004, only 30% of its survey respondents’ benefits packages included EAPs. Other popular benefits include childcare vouchers, extra holidays for long service and the option of additional voluntary pension contributions.

Outside of the core options, companies offer a wide range of additional benefits to their employees on an all-inclusive or selective basis. Some examples are listed below.

Taxing measures
Some employee benefits attract preferential tax treatment, often in line with government policy to support lifestyle choices – for example, childcare vouchers and cycle-to-work schemes. Alternatively, employees may enter into a salary sacrifice arrangement. Under such agreements, an employee gives up part of his/her gross salary in return for the employer agreeing to provide a benefit. For example, under a pension salary sacrifice arrangement, a member of staff gives up a percentage of their salary while the employer makes an equivalent contribution to the employee’s pension. The employee saves on income tax, while both employer and employee save on National Insurance contributions. However, salary sacrifice agreements may have implications for other provisions such as working tax credits or the national minimum wage. CIPD advises parties considering such arrangements to visit the HM Revenue and Customs website for further information.

Have your say
Has your benefits package changed within the last twelve months? Have you gone from having an enviable rewards scheme to one of the bare minimum after cost cutting measures from your employer? Now in its 11th year, the Pf Company Perception, Motivation and Satisfaction Survey offers those working day-to-day in the medical sales industry the opportunity to vent their frustrations at everything from horrible bosses to a measly bonus package – all behind the shield of anonymity. So, if you’ve had your company car taken away or your pension scheme has been reduced have your say today at www.pharmafield.co.uk/survey. The online survey takes only ten minutes to complete with a donation made to the charity Home from Hospital Care for every completed form.