Drug Attorneys

Some areas of health care have been held down by the specter of government regulation and fewer blockbuster drugs. However, several new developments, most notably in medical devices, look promising, says Steve Calhoun, manager of the $1.75 billion Fidelity Select Health Care Fund (FSPHX ). Calhoun sees great potential for drug-coated stents, which he says should soon receive the green light from the Food & Drug Administration.

Calhoun predicts that these artery-opening devices will spur growth for several companies, including Johnson & Johnson (JNJ ) and Boston Scientific (BSX ). In a challenging environment, he thinks such attractive innovations offer the best prospects in the health-care sector.

Calhoun, who took over the Fidelity fund a year ago, has managed to avoid the steeper declines that have plagued his peers. For the one-year period through February, the fund fell 16.1%, vs. a 24.3% loss for the average health-care fund. Calhoun’s record so far continues the fund’s history of outperforming. Among all domestic equity funds, its the fifth-best-performing fund for the 10-year period through February, with a 15.3% annualized gain. Calhoun credits this success to Fidelity’s strengths in investment research.

Based on risk and returns over the last three years, S&P gives the portfolio an overall rank of 3 Stars. Bill Gerdes of S&P’s Fund Advisor recently spoke with Calhoun about investing in the sector and the fund’s strategy. Edited excerpts from their conversation follow:

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The Centers for Disease Control and Prevention does not actively monitor for Creutzfeldt-Jakob disease, which is difficult to diagnose in any case. Epidemiologists say at least a small rise in cases could occur without being noticed.

Concerns about sheep-to-cow transmission have also risen in the Federal Food and Drug Administration, which regulates animal feed. In 1994 the agency proposed banning the use of certain sheep offal, a move that was opposed by large segments of the agricultural industry. The agency took no action after risk-assessment studies indicated “that having such a rule will not provide any value,” said Dr. Stephen F. Sundlof, an agency official. But the proposal is now being re-examined in light of the British Government’s finding, Dr. Sundlof said, and he expects a decision soon.

Major sheep producers have voluntarily agreed not to render adult sheep and sell the rendered products for feed in ruminants and cattle. But Federal officials said it was “very difficult” to verify compliance. Dr. Sundlof noted that even if a ban was carried out, there would be no absolute assurance that farmers were complying, in part because there is no way to test a rendered product for sheep parts.

Dr. Hueston said the Department of Agriculture has carefully studied the sheep-to-cow transmission possibility but has been unable to verify it in the United States, either in theory or practice. Scrapie-infected tissue collected from sheep in this country has been injected into the brains of cattle without causing the damage typical of mad cow disease, suggesting the scrapie agent that infects American sheep may differ from that of British sheep.

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A bill in the state Legislature would prevent the city of New Orleans and other local governments from collecting sales tax on drugs and medical devices administered by doctors in their offices.

While drugs administered to patients in a doctor’s office are exempted from the state’s 4% sales tax, a loophole allows local governments to collect sales tax on them.

In New Orleans, the city collects 4% sales tax on its own behalf and 1% on behalf of the Regional Transit Authority. However,…

Source : accessmylibrary.com

Mattel, the world’s largest toymaker, had a reputation for a strong quality-assurance program in China. With many Christmas orders already in the pipeline, manufacturers and suppliers are scrambling to ensure the integrity of their products.

Where Does the FDA Fit In?

NPR.org, August 15, 2007 · Several federal departments and agencies share responsibility for making sure that products sold in the United States are safe.

Toy safety, for example, is mostly monitored by the Consumer Product Safety Commission. The United States Department of Agriculture checks meat quality, and the National Highway Traffic Safety Administration regulates cars. Oversight of drugs, cosmetics, medical devices and most food falls to the Food and Drug Administration.

One Web site, www.recalls.gov, tracks recent actions taken by all those agencies. While steps that lead to a product recall can differ a bit from agency to agency, the FDA’s plan, as outlined below, is typical:

What are recalls? Any of several types of actions taken to remove a product from the market because it may be harmful to the consumer. This can mean simply halting distribution of the product and removing it from store shelves. Reimbursing customers for products already purchased is not required by the FDA.

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For most of this year, the chat on the Internet had it that Sunrise Technologies International Inc., a small California medical device company, was a stock sure to deliver a bountiful return.

So far though, it has served up only heartburn.

A Government advisory panel voted unanimously Thursday to advise the Food and Drug Administration to reject Sunrise Technologies’ new laser to treat farsightedness. The decision shocked a devoted coterie of investors who were convinced the remedy was a sure thing.

Investors could not bail out fast enough. The company’s shares plunged 75.2 percent, or $11.28125, yesterday, to $3.71875. More than 27 million shares changed hands yesterday, making the stock the second most active for the day.

”This was their day, and they failed miserably,” said Evan Sturza, president of Sturza’s Medical Research in New York. ”Sunrise Technologies has one product, one trick pony. And it just broke it’s ankle.”

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The Nov. 15 news that Johnson & Johnson (JNJ) and Guidant (GDT) had agreed on a new deal came as a bit of a surprise to investors. Guidant, which had sued J&J to complete the transaction under the original terms, saw its stock climb more than 8% after agreeing to a $21.5 billion buyout, about $4 billion less than originally planned.

That the two companies found a way to team up, however, should not have surprised anyone. Sure, both companies were playing hardball. J&J stated it was not required to follow through on the deal because Guidant’s recent defibrillator recalls had a “material adverse effect” on the device maker. Guidant countered with its lawsuit. But the bottom line is that events over the last few months made this deal more important than ever for both Guidant and J&J.

Let’s look at J&J first. The company’s pharmaceutical business, which now accounts for about 44% of J&J’s $51 billion in annual sales, is in a funk. Pharmaceutical sales growth this year and in 2006 are expected to be almost nonexistent, according to SG Cowen. Among the reasons: declining sales due to intensifying competition for its $3.3 billion anemia drug Procrit, and the launch of generic versions of such key products as Duragesic, a patch for chronic pain.

DRUG PROBLEMS At the same time, like others in the industry, J&J’s drug pipeline needs a replenishing. In late October the Food & Drug Administration informed the company that its drug for premature ejaculation, dapoxetine, was not going to be approved by the agency. While J&J says it is committed to addressing the FDA’s concerns, analysts now wonder if the drug will ever reach the market. Unfortunately, market analyst Datamonitor figures dapoxetine was the only potential blockbuster on J&J’s near-term horizon.

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President Bush is recommending changes in Medicare that would offer incentives for some seniors to get improved prescription drug benefits by switching to private health plans while offering some type of drug benefit for all in the system.

“Today, doctors routinely treat their patients with prescription drugs, preventive care and groundbreaking medical devices, but Medicare coverage has not kept pace with these changes,” Bush said in his weekly radio address Saturday. “Our goal is to give seniors the best, most innovative care.”

“This will require a strong, up-to-date Medicare system that relies on innovation and competition, not bureaucratic rules and regulations,” he said. Bush has said he wants to sign legislation this year.

Democrats have claimed the issue of improving prescription drug benefits as a central campaign theme in recent elections.

On Friday, the Bush administration praised a new bipartisan plan for prescription drugs under Medicare, the federal health insurance program for the elderly.

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Johnson & Johnson has been put on the defensive after the release of research that called into question the safety of a medical device pioneered by J&J. On Sept. 3, a group of scientists at the World Congress of Cardiology in Barcelona presented research showing that stents—the diminutive wire tubes used to prop open clogged arteries—may pose more dangers to patients when they’re covered with drugs, rather than made of bare metal. The researchers said drug-coated stents raise the risk of fatal blood clots and that the danger is greatest with J&J’s product, Cypher. Patients implanted with the J&J device face a 38% higher risk of adverse events, the researchers said.

Three days later, J&J (JNJ) has fought back. The company’s stent unit, Cordis, released results from a four-year trial showing that the clot risk was not significantly higher with drug-coated stents than with bare-metal stents. It didn’t stop there. J&J also released two years of data showing that patients who receive the Cypher stent are less prone to heart attacks than those who receive the competing Taxus stent, made by rival Boston Scientific (BSX).

Simultaneously, Cypher was approved in Europe to treat a severe form of artery disease in the leg. The company trumpeted the news not only in Barcelona, but also at a meeting for Wall Street analysts held in Jersey City, N.J., on Sept. 6.

DOCTORS SHYING AWAY? The rapid-fire response underscores the importance of Cypher to a company that’s better known for baby powder than cutting-edge technology. J&J has embarked on a multifaceted effort to improve its growth prospects—and profitability—in medical devices, which account for $19 billion of J&J’s $50 billion in annual sales. Of the company’s seven device units, Cordis is by far the hottest. Its sales grew 24% in 2005, to $4 billion. The other top-performing device businesses, diabetes-device maker LifeScan and orthopedic unit DePuy, each grew just 12% by contrast.

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An influential federal advisory commission says the financial condition of the nation’s hospitals has significantly improved, so there is no need for Congress to increase their Medicare payments, despite insistent pleas from the industry.

If Congress accepts the advice, as it often does, lawmakers will have more money available for new Medicare benefits like prescription drug coverage. In the last 18 months, elderly people seeking drug benefits have found themselves competing with hospitals, nursing homes and other providers for a limited pot of federal money.

Tricia Smith, chief federal health lobbyist at AARP, the nation’s largest organization of older Americans, welcomed the panel’s conclusion. “We have dedicated enough of the budget surplus to health care providers,” Ms. Smith said. “We now need to focus on prescription drugs and the concerns of beneficiaries.”

Congress cut back Medicare payments to health care providers in 1997, under a law intended to balance the federal budget. But in November 1999 and in December of last year, Congress restored some of the money, increasing Medicare payments to almost all types of providers.

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The beleaguered German drug regulatory authority, BfArM, castigated from all sides for its slowness in dealing with a massive backlog of work and given a final five-year deadline to clear it, is to have a new acting director after Health Minister, Andrea Fischer, moved the authority’s former top man to..

Source : accessmylibrary.com

Eli Lilly & Company, which is slimming down to its core pharmaceutical business, said yesterday that it would spin off five units that made medical devices to a new company, the Guidant Corporation.

It plans to sell 20 percent of the Guidant shares in a public offering later in 1994. The rest would be distributed to Lilly shareholders next year.

Analysts said that Guidant could be valued at $1.5 billion to $2 billion, based on the stock prices of comparable public companies. Based on the $800 million in 1993 revenues of the five Lilly units, the new company would have been among the 500 largest American industrial companies last year.

Lilly, based in Indianapolis, said last January that it planned to sell or spin off the units, but analysts said the company evidently failed to find buyers. Although at least two of the businesses have strong market shares, their hospital customers have been holding down spending under growing pressure from health care purchasers. Price May Be Discounted

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Medtronic Inc., a diversified medical device maker based in Minneapolis, said yesterday that it had agreed to acquire Electromedics Inc., a similar but smaller company, in a cash or stock deal valued at $96.9 million.

Medtronic raised a previous offer by 12.5 cents a share, offering $6.875 for each of the 14.1 million Electromedics shares, payable in Medtronic stock or cash, or a combination of the two.

The deal ended a small bidding war for Electromedics, based in Parker, Colo., which had made no secret of its availability. Another bidder, St. Jude Medical Inc., based in St. Paul, had announced a definitive agreement to acquire Electromedics on Dec. 7 for $6.375 a share, eclipsing an earlier bid by Medtronic. St. Jude confirmed yesterday that it was dropping out.

The merger is subject to approval by shareholders and Federal regulatory authorities.

St. Jude, which makes mechanical heart valves, had offered $90 million for Electromedics, which makes auto-transfusion equipment to maintain blood and return it to the body during surgery. Other Acquisitions to Be Sought

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It has been a long and tortured courtship. For years, health-care giant Johnson & Johnson (JNJ ) has held on-again, off-again acquisition talks with medical-device maker Guidant (GDT ). Now Wall Street sources say the companies are talking again. While a deal is far from assured, it appears J&J and Guidant are closer than they’ve ever been to linking up.

Even if J&J pulls off the Guidant deal, don’t expect the company to put its checkbook away for long. Certainly, Guidant would be a good acquisition for the $47 billion J&J, giving it a big piece of the fast-growing market for implantable defibrillators, which correct overly rapid heartbeats and help stave off cardiac arrest. And the deal — which analysts figure would be valued at about $25 billion — could give a boost to slowing revenue growth over the next few years.

JOLT FROM MEDICAL DEVICES. But New Brunswick (N.J.)-based J&J could face a slowdown again later in the decade. The culprit: Its large pharmaceutical business, which, like the rest of the drug industry, is facing patent expirations, intensifying competition, and a dearth of new products.

That’s why Johnson & Johnson needs to continue hunting for deals — and why Chairman and Chief Executive William C. Weldon wants to bulk up in the medical-device business, which has been on a tear of late. J&J already garners 36% of its sales from its devices and diagnostic testing business, a sector that enjoys healthy margins and the potential for lucrative new products in the years ahead.

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MicroChips Inc. hopes that one day you’ll use electricity to take your drugs.

No extra outlet will be needed. Rather, an electrical current sent to your body will start the process to deliver the drugs.

The Bedford, Mass., start-up, which counts medical-device makers Boston Scientific Corp. and Medtronic Inc. as investors, recently demonstrated the ability to continuously release drugs in a handful of dogs over a six-month period using an implantable device and wireless technology.

The demonstration, which is being featured in the April edition of the journal “Nature Biotechnology” was said not to be harmful to the dogs, which were given a drug for the treatment of prostate cancer. MicroChips’ technology will also be used to activate biosensors in the body and for the passive delivery of drugs in orthopedic implants like hips or knees.

More : online.wsj.com

In a fundamental shift, the Federal Government will explicitly weigh cost as a factor in deciding whether Medicare should pay for new medical procedures, devices and drugs for elderly people.

A confidential draft of new Medicare rules, now awaiting a final clearance that is usually a formality, says an “explosion of high-cost medical technologies” has made it necessary to consider cost in deciding whether to expand, continue or terminate coverage of specific services.

Medicare decisions about the coverage of new items and procedures have an impact far beyond the Federal program, because private health insurers often follow the Government’s lead in deciding whether to pay for goods and services. ‘Justify the Additional Cost’

Since the inception of Medicare 25 years ago, Federal officials have decided whether to cover new services and procedures, like liver transplants and magnetic resonance imaging, on the basis of their safety and effectiveness. Now the Government intends to consider another factor: whether an item or procedure costs more or less than the alternatives already approved for use by the 34 million elderly and disabled people enrolled in Medicare.

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The Supreme Court, which rarely examines Federal patent law, agreed today to decide a patent issue of considerable importance to the growing medical technology industry.

The Supreme Court, which rarely examines Federal patent law, agreed today to decide a patent issue of considerable importance to the growing medical technology industry.

The Court agreed to decide the scope of a special patent law exemption that Congress granted five years ago to the generic drug industry. Under the exemption Congress sped up the process by which manufacturers of generic drugs could obtain Federal approval for their copies of brand-name drugs on which the patents had expired. The makers of generic drugs were protected against patent-infringement suits if they conducted clinical trials of their ”copy-cat” products toward the end of the patent life of the brand-name drugs.

The legal issue before the Court is whether Congress meant the special protection to extend beyond generic drugs to such products as medical devices and food additives that are also regulated by the Food and Drug Administration. Broad Interpretation

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The current administration has shown a persistent pattern of bringing in incompetent leaders into critical positions. We’ve seen it at FEMA. We’ve seen it at other agencies. And now it’s true at FDA.”

Senator Barbara A. Mikulski (D-Md.) called for a return to science in the Food and Drug Administration (FDA) on the Senate floor today, expressing her concern over recent issues at the agency. The Senator’s statement comes in the wake of former Director Susan Wood’s resignation from the organization.

The Senator’s floor statement, as delivered, is below:

“I rise to encourage my colleagues to vote for the Appropriations bill that is before us. This is the Appropriations bill to fund Agriculture and the Food and Drug Administration (FDA). I would like to thank the Chairman of the Committee, the distinguished Senator from Utah, Mr. Bennett, as well as the Ranking Member on the excellent bill that they have put together, and therefore warrants our support because it does fund the agricultural needs of our community, but also funds the Food and Drug Administration.

“Madam President, Maryland is an agricultural state. It might surprise people because usually we’re thought of as the home of high-tech research, Johns Hopkins University, the National Institutes of Health -but we are agriculture in soy beans and poultry. But also, we are the proud home of the Food and Drug Administration. We’re so proud of the fact that the FDA is in Maryland and that that agency is charged with the mission of food safety and also with the safety of our drugs and our medical devices. One might ask, why is FDA in the AG Appropriations?

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Repeated checks of the nation’s medical equipment have uncovered no serious prospect of Year 2000 computer failures, according to federal health officials and doctors responsible for safeguarding consumers.

These doctors and officials say very few medical devices need to know the year. They add that there are plenty of prescription drugs, so consumers should not hoard.

And they point out that health workers are accustomed to handling emergencies, including the loss of water and power, and can treat people without the help of computer-operated devices.

”We’ll be prepared,” said Dr. Donald Palmisano, a surgeon in New Orleans and a trustee of the American Medical Association. ”The most important thing right now is for people not to panic.”

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Massachusetts Institute of Technology professor Bob Langer has spent 25 years trying to solve the puzzle of drug delivery. Every drug has a desirable therapeutic range. Above it, the drug can be toxic. Below, the medication can be ineffective.

Just how do you get the right dose to a patient at the right time? To find the answer, Langer has customized polymers that allow drugs to seep out into the body, experimented with magnets as a way to control polymer drug release, and worked on patches that slowly pass drugs into the body through the skin. To date, Langer holds 408 patents and has published 711 articles and 13 books. He has also licensed products to more than 75 companies. So when Langer has an idea, it matters.

His latest brainchild combines silicon chips with advanced medical-device technology to make drug delivery more intelligent. “This is a paradigm shift,” he says. “We’re putting pharmacies on a chip.” It could also turn out to be big business. The U.S. drug delivery industry produces $38 billion to $40 billion in revenues each year. Mahesh Chaubal, founder of drug-delivery information service Drugdel.com, estimates that the market for computerized delivery systems could be worth $5 billion by 2012, vs. zero today.

DRUG WELLS. The concept of a computerized drug-delivery system came to Langer while he was watching a TV program about chip-giant Intel more than 10 years ago. But it wasn’t until John Santini arrived as an MIT summer student in 1993 that the project started to take shape. After completing his PhD at MIT, Santini founded MicroCHIPS, a Cambridge (Mass.) startup that’s designing chip-based drug-delivery technology. To date, it has attracted two rounds of venture funding totaling $17.25 million.

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Shares of J&J (JNJ: up $1.36 to $62.00, Research, Estimates) rose in afternoon trading as the company announced very positive results for its new drug-coated stents. Stents are small tubes used to unclog arteries. J&J’s Cypher stent is in the new class of drug-eluting stent designed to use medication to prevent arteries from reclogging.

A U.S. trial showed the company’s drug-coated stents kept the stent-covered section of the artery from reclogging in all but 2 percent of cases, J&J said. At the edges of the stents, arteries suffered reclogging in about 9 percent of cases.

With bare-metal stents with no drugs, restenosis, or reclogging, generally occurs in 25 percent to 30 percent of cases.

J&J hopes the data will bolster its lead over a pack of companies — Boston Scientific (BSX: down $0.58 to $26.15, Research, Estimates), Guidant, Medtronic and Abbott Laboratories — in the race to bring a coated stent to the U.S. market.

Shares of J&J are now about $4 off their 52-week high.

According to analysts, medical device companies are becoming more attractive as big pharma companies have seen slower growth in earnings and revenue.

“Recently we’ve de-emphasized the large multinational drug companies because of the headwinds they’ve faced because of patent expirations and no big product approvals,” Linda Miller, manager of the John Hancock Health Sciences Fund, told CNNfn.

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