GSK's Witty Knighted For Services To UK Economy

With the New Year in the UK comes the Honours List, recognizing outstanding achievements and service across the country. Amid a flurry of awards and medal ceremonies -- including In Vivo Blog's own highly-esteemed Deals of the Year Awards -- (voting time is now down to only a few hours, so please cast if you haven't already), joining the Honours List bestows individuals with a certain cachet that few other accolades can provide.

Henceforth, then, we'll be requesting interviews with Sir Andrew, aka GSK chief Andrew Witty, upon whom the Queen bestowed a knighthood for services to the UK economy as well as services to the pharmaceutical industry. Smith & Nephew's chairman John Buchanan also became a 'Sir', and, not forgetting R&D, Her Maj. bestowed awards on a couple of well-known biotech researchers.

Cynics may be suspicious of the timing of this flurry of biopharma-focused decorations. They came only a couple of weeks after the UK government outlined its new Life Sciences Strategy, in which much hope was placed on the sector helping to pull the UK economy out of the doldrums. Surely, though, courting the sector with awards doesn't spell a lack of confidence in the success of the goverment's apparently more solid set of support programs?

Either way, no one wants the UK to have to swallow another Pfizer Sandwich (aka the huge R&D facility that was shut down in Kent).

Sir Andrew's distinction, although fine, probably underlines the hours spent in UK Prime Minister David Cameron's Business Advisory Group. (Ouch. We don't mean that.) Sir Andrew also has a European string to his bow, as the current president of the European Federation of Pharmaceutical Industries and Associations (EFPIA), but obviously Cameron didn't hold that against him.

Still, Sir Andrew's award may have a bitter tang to some of those R&D chiefs that may have seen their Drug Performance Units culled as part of GSK's high-profile three-year review cycle (results expected to be made public in February).

The timing of Sir John's award came just prior to the latest in series of acquisitions and divestments that he has overseen since 2006 at the artificial hip and knee maker. Smith & Nephew on Jan. 4 announced it was spinning off its biologics business into a US-based JV with private equity firm Essex Woodlands.

Other knights of 2012: obesity expert Prof. Steve Bloom of Imperial College London, who co-founded the UK biotech Thiakis Ltd in 2004, to research the therapeutic potential of gut peptide hormones in controlling appetite. Thiakis was acquired by Wyeth (now Pfizer) in 2008. Prof. Mark Pepys, formerly of University College London, also becomes a Sir. He co-founded Pentraxin Therapeutics, a UCL-spin out with a focus on the rare disease, amyloidosis. Pentraxin entered into a research collaboration with GSK in 2009.

Order of the British Empire Awards (OBEs) were awarded to Richard Barker, who retired as director general of the UK trade association, the ABPI, in the middle of 2011, and Dr John Stageman, currently vice-president of UK science affairs at AstraZeneca. Stageman was closely involved in developing AZ's biotech strategy, including the acquisition of Cambridge Antibody Technology and the US company, MedImmune Inc.

image courtesy of flickrer sincerelyhiten

While You Were Egg-Hunting

Whether your egg was of the plastic, chocolate, or old fashioned white-and-yolk variety we hope you had a good weekend. The IN VIVO Blog is still recovering from a long week of conferencing in New York and we should have a few more thoughts to share from PSO later this week. Meanwhile here are a few things you may have missed over the weekend. That sound you might have heard was the utter destruction of our NCAA tourney bracket ...

• The Times examines the market for hip replacement in the US, where British firms Smith & Nephew and Corin are competing with new, longer-lasting joints.
  
• Fan of Bad Science? Get an earful from Ben Goldacre tonight on Radio 4.
  
• Lowe and behold: In the Pipeline's review of Pfizer's attempts at prying open the process of scientific publishing. So far it's journals, 2, Pfizer, 0, with one contest remaining.
• David Hamilton at VentureBeat has the goods on ImmunoNewco, the stealthy 5AM Ventures investment that has acquired the Danish biotech Borean Pharma. (For more on Borean, check out our 2005 profile.)
  

Easter photo from flicker user eurodrifter used under a creative commons license.

Ortho Settlement Doesn't Settle Everything

Yesterday’s announcement that the U.S. Attorney and four of the nation’s biggest orthopedics companies agreed to a $311 million settlement of bribery accusations would seem to put this entire matter to bed.

Under the agreement, four companies—Biomet Inc., DePuy Inc., Smith & Nephew plc and Zimmer Holdings Inc.—paid varying portions of the settlement while all agreed to adopt corporate integrity agreements and to hire outside firms that will monitor their relationships with physicians.

(It’s worth noting that Stryker Orthopedics did not take part on the settlement. CEO Steve McMillan touched on the subject before the settlement in a recent IN VIVO magazine article. Medtronic Sofamar Danek also has had prominent role in this debate.)

But once the cloud cover over the industry clears, we may find an orthopedics industry facing a whole new set of daunting questions:

What of the clean up that’s already begun? Certainly, few industry executives would deny privately that there are more than a few skeletons in the closet of most orthopedics companies—arrangements entered into around consulting agreements or royalty payments that richly reward surgeons for minimal amounts of work. But the $311 million settlement aside, our bet is that most orthopedic industry executives are applauding the settlement and—particularly given that no heavier, industry-disrupting judgments were handed down—may even have welcomed the scrutiny that the case brought.

For one thing, many orthopedic companies have themselves been trying to clean up their act over the past several years, following guidelines such as those promulgated by industry trade association AdvaMed governing appropriate compensation in sales and marketing practices and consulting arrangements.

That’s good corporate citizenship, but also good business sense. Particularly as the industry has consolidated in recent years and become much more of an oligopoly, legacy consulting arrangements that don’t deliver real clinical and economic value to orthopedics companies have become both fiscally irresponsible and unnecessary. Were there times in the past when orthopedics companies set up less-than-robust consulting or royalty arrangements with surgeons just because the surgeons demanded arrangements similar to ones they believed other surgeons were getting? Sure. But as the industry has consolidated and competitive positions stabilized, the ortho giants have no longer felt the temptation to enter into these agreements. Adherence to the AdvaMed guidelines were one rationale for pushing against these kinds of practices; the federal investigation into these practices now gives ortho companies more and more plausible arguments to deny surgeons who come asking for lucrative deals.

Does this tilt or level the playing field for smaller companies? The US Attorney investigations focused on the largest orthopedics companies, a group who, in aggregate represent greater than 90% market share. What are the implications for smaller suppliers and start-up companies? Does the ban against aggressive sales training and consulting agreements eliminate questionable practices and level the playing field? Or does it do just the opposite, erecting huge barriers to entry around the market leaders and preventing others from using well-established tactics that get the attention of important customers? More to the point, particularly where things like the AdvaMed guidelines are concerned, what posture should non-market leaders take? Strict compliance with what are voluntary rules? Or an attitude of, “Let Big Ortho do what it has to; we’ll do what we have to?”

What of the historical and vital relationship with physicians?
Most of the scrutiny has focused on sales and marketing practices—product training programs at the Ritz or sales training done on championship golf courses—those kinds of things. But what rules do we want to adopt about surgeon/supplier relationships where it concerns new product development? Rigid firewalls in the area of technological innovation might cut down on some abuses but almost certainly would signal the end of meaningful new product development in a field where innovation comes largely, if not exclusively from collaborations and feedback from suppliers.

Already some surgeons are beginning to claim that rather than simply ending abuses, the current scrutiny is giving orthopedics and spine companies license to deny them fair compensation for new ideas and new product iterations. Many device industry executives argue that while the current wide-scale scrutiny (one which embraces physicians working with drug companies on clinical trials and the like) is entirely appropriate, some special consideration should be set aside for device companies when it comes to oversight on product company/surgeon relationships.

As noted, the settlement is most likely good news, particularly in that few believe it will call for fundamental changes in industry dynamics. But no one should breathe a sigh of relief until we see what impact, if any, the future oversight will have on surgeon relationships as they apply not to sales and marketing efforts, but to product development.