Post by unlawflcombatnt on Oct 12, 2010 12:20:30 GMT -6
In typical monopolist/oligopolistic fashion, Pfizer had bought out another smaller drug manufacturer (King Pharmaceuticals), in order to increase Pfizer's pricing power on drugs the Government (and taxpayers) will have to pay for through Medicare Part D.
In this particular case, Pfizer bought out King Pharmaceuticals, the maker of the Flector patch--a patch containing a topical NSAID (diclofenac)--used for localized pain.
Fortunately there are other makers of topical diclofenac, though there are no other manufacturers of the patch itself.
I'll remember not to ever prescribe the patch again--at least until it goes generic. I hope other physicians will do the same.
----------------
Pfizer Acquires Pain Drug Maker King for $3.6 Billion
By Shannon Pettypiece and Catherine Larkin -
Oct 12, 2010
"Pfizer Inc. agreed to pay $3.6 billion in cash to buy King Pharmaceuticals Inc., expanding its range of pain treatments to include tamper-resistant medicines.
Pfizer, the world’s largest drugmaker, will pay $14.25 a share, a premium of 40% over King’s closing share price yesterday....
[Rest assured, that 40% premium will be passed on to taxpayers in its entirety--since no other company will be producing the Flector patch.]
The deal would be Pfizer’s biggest since its $68 billion purchase of Wyeth last year. King gives Pfizer access to the Flector pain patch and abuse-resistant pain treatment Embeda. Pfizer has said it is looking to expand its pain products beyond the arthritis treatment Celebrex and nerve pain remedy Lyrica. King had $1.78 billion in revenue last year and is focused on making pain medications that patients can’t overuse.
“We view King as a solid asset at a somewhat elevated price for Pfizer,” said Joel Levington, managing director with Brookfield Investment Management Inc., said in an email. “The transaction should modestly help Pfizer’s growth profile in 2012 through 2013, and we do not see the deal having an impact on the company’s strong creditworthiness.”
[It helps Pfizer further monopolize the market for NSAID pain medications, driving prices still higher.
Oh, and let's not forget that Pfizer also produces Lipitor--which is manufactured in Ireland, not the US--thus creating jobs in Ireland, and not in the US.]
King surged $3.98, or 39%, to $14.13 as of 9:14 a.m. in early New York Stock Exchange trading. The shares had declined 17% since Jan. 1 as the Bristol, Tennessee-based company faced competition from generic copies of Skelaxin, its top-seller last year.
Pfizer shares rose 11 cents to $17.49.
King Shares
King hasn’t closed at $14.25 since September 2007, according to data compiled by Bloomberg. The company also makes Thrombin-JMI to control bleeding during surgery and Levoxyl for thyroid disorders.
[Levoxyl is their brand name for Levothyroxine--a synthetic thyroid hormone replacement, which had been made generically for over 30 years by over a dozen companies. (According to the now out-of-publication Physicians GenRx--there were 13 manufacturers of 0.1mg levothyroxine tablets in 1999. ]
Pfizer needs new products to help offset the losses expected next year when generic copies of its top-selling drug, the Lipitor cholesterol pill, enter the market. Lipitor had $11.4 billion in revenue last year.
[And about 95% of the revenue for Lipitor was paid for US taxpayers--most of whom don't take Lipitor. A similar generic drug--pravastatin--costs only 10-20% as much as Lipitor. (If purchased at WalMart, the price of Pravastatin would be less than 1% of the price of Lipitor.)
Thus, if the similar generic drug Pravastatin been prescribed instead of Lipitor (even if not from Walmart), that $11.4 billion in taxpayer-funded revenue would have been reduced to less than $3 billion, and would have saved taxpayers $8 billion.
Imagine that. The simple replacement of just one high-priced drug with an equivalent generic would have saved taxpayers and Medicare $8 billion. (For the record, I consider Pravastatin a better drug than Lipitor, since it has less interactions with other drugs, and because there are few drugs that affect its metabolism, and because there are fewer side effects.]
King has been focused on developing new painkillers since its top-selling blood-pressure pill Altace went generic in 2007. The company acquired Alpharma Inc. the following year for about $1.3 billion to gain rights to Embeda, a morphine pill designed to deter abuse. Embeda was approved by the U.S. Food and Drug Administration in August 2009.
Tamper-Resistant Remoxy
King is also developing Remoxy, a long-acting oxycodone capsule with tamper-resistant features, with Pain Therapeutics Inc., of San Mateo, California. The drug is designed to be a safer alternative to OxyContin, made by Stamford, Connecticut- based Purdue Pharma LP. King’s short-acting oxycodone pill, called Acurox, is partnered with Palatine, Illinois-based Acura Pharmaceuticals Inc. and failed to win an FDA panel’s backing in April.
“We are highly impressed by King’s innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline,” said Pfizer Chief Executive Officer Jeffrey Kindler in the statement. “The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe [and reduce competition so we can raise prices. ]....
Pfizer has done 30 deals in the past 5 years with an average size of $4.13 billion. The average premium paid for pharmaceutical acquisitions over the past 12 months was 24%, according to data compiled by Bloomberg.
[So we can all anticipate a 24% increase in most drug prices, since Pfizer is guaranteed to submit its buyout costs to the Government when it requests price increases for Medicare Part D and to Medicaid-covered drugs.]
Pfizer’s financial adviser was J.P. Morgan Securities LLC and its legal advisor was Cadwalader, Wickersham & Taft LLP. Credit Suisse was King’s financial advisor and Covington & Burling LLP was its legal advisor.
In this particular case, Pfizer bought out King Pharmaceuticals, the maker of the Flector patch--a patch containing a topical NSAID (diclofenac)--used for localized pain.
Fortunately there are other makers of topical diclofenac, though there are no other manufacturers of the patch itself.
I'll remember not to ever prescribe the patch again--at least until it goes generic. I hope other physicians will do the same.
----------------
Pfizer Acquires Pain Drug Maker King for $3.6 Billion
By Shannon Pettypiece and Catherine Larkin -
Oct 12, 2010
"Pfizer Inc. agreed to pay $3.6 billion in cash to buy King Pharmaceuticals Inc., expanding its range of pain treatments to include tamper-resistant medicines.
Pfizer, the world’s largest drugmaker, will pay $14.25 a share, a premium of 40% over King’s closing share price yesterday....
[Rest assured, that 40% premium will be passed on to taxpayers in its entirety--since no other company will be producing the Flector patch.]
The deal would be Pfizer’s biggest since its $68 billion purchase of Wyeth last year. King gives Pfizer access to the Flector pain patch and abuse-resistant pain treatment Embeda. Pfizer has said it is looking to expand its pain products beyond the arthritis treatment Celebrex and nerve pain remedy Lyrica. King had $1.78 billion in revenue last year and is focused on making pain medications that patients can’t overuse.
“We view King as a solid asset at a somewhat elevated price for Pfizer,” said Joel Levington, managing director with Brookfield Investment Management Inc., said in an email. “The transaction should modestly help Pfizer’s growth profile in 2012 through 2013, and we do not see the deal having an impact on the company’s strong creditworthiness.”
[It helps Pfizer further monopolize the market for NSAID pain medications, driving prices still higher.
Oh, and let's not forget that Pfizer also produces Lipitor--which is manufactured in Ireland, not the US--thus creating jobs in Ireland, and not in the US.]
King surged $3.98, or 39%, to $14.13 as of 9:14 a.m. in early New York Stock Exchange trading. The shares had declined 17% since Jan. 1 as the Bristol, Tennessee-based company faced competition from generic copies of Skelaxin, its top-seller last year.
Pfizer shares rose 11 cents to $17.49.
King Shares
King hasn’t closed at $14.25 since September 2007, according to data compiled by Bloomberg. The company also makes Thrombin-JMI to control bleeding during surgery and Levoxyl for thyroid disorders.
[Levoxyl is their brand name for Levothyroxine--a synthetic thyroid hormone replacement, which had been made generically for over 30 years by over a dozen companies. (According to the now out-of-publication Physicians GenRx--there were 13 manufacturers of 0.1mg levothyroxine tablets in 1999. ]
Pfizer needs new products to help offset the losses expected next year when generic copies of its top-selling drug, the Lipitor cholesterol pill, enter the market. Lipitor had $11.4 billion in revenue last year.
[And about 95% of the revenue for Lipitor was paid for US taxpayers--most of whom don't take Lipitor. A similar generic drug--pravastatin--costs only 10-20% as much as Lipitor. (If purchased at WalMart, the price of Pravastatin would be less than 1% of the price of Lipitor.)
Thus, if the similar generic drug Pravastatin been prescribed instead of Lipitor (even if not from Walmart), that $11.4 billion in taxpayer-funded revenue would have been reduced to less than $3 billion, and would have saved taxpayers $8 billion.
Imagine that. The simple replacement of just one high-priced drug with an equivalent generic would have saved taxpayers and Medicare $8 billion. (For the record, I consider Pravastatin a better drug than Lipitor, since it has less interactions with other drugs, and because there are few drugs that affect its metabolism, and because there are fewer side effects.]
King has been focused on developing new painkillers since its top-selling blood-pressure pill Altace went generic in 2007. The company acquired Alpharma Inc. the following year for about $1.3 billion to gain rights to Embeda, a morphine pill designed to deter abuse. Embeda was approved by the U.S. Food and Drug Administration in August 2009.
Tamper-Resistant Remoxy
King is also developing Remoxy, a long-acting oxycodone capsule with tamper-resistant features, with Pain Therapeutics Inc., of San Mateo, California. The drug is designed to be a safer alternative to OxyContin, made by Stamford, Connecticut- based Purdue Pharma LP. King’s short-acting oxycodone pill, called Acurox, is partnered with Palatine, Illinois-based Acura Pharmaceuticals Inc. and failed to win an FDA panel’s backing in April.
“We are highly impressed by King’s innovative products and technology in the pain relief disease area, as well as by its success in advancing promising compounds in its pipeline,” said Pfizer Chief Executive Officer Jeffrey Kindler in the statement. “The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe [and reduce competition so we can raise prices. ]....
Pfizer has done 30 deals in the past 5 years with an average size of $4.13 billion. The average premium paid for pharmaceutical acquisitions over the past 12 months was 24%, according to data compiled by Bloomberg.
[So we can all anticipate a 24% increase in most drug prices, since Pfizer is guaranteed to submit its buyout costs to the Government when it requests price increases for Medicare Part D and to Medicaid-covered drugs.]
Pfizer’s financial adviser was J.P. Morgan Securities LLC and its legal advisor was Cadwalader, Wickersham & Taft LLP. Credit Suisse was King’s financial advisor and Covington & Burling LLP was its legal advisor.