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Top five pharma controversies of 2015 (so far)

pharmafile | November 20, 2015 | Feature | Medical Communications, Sales and Marketing AstraZeneca, Martin Shkreli, Philidore, Takeda, Turing Pharmaceutical, Valeant, Warner Chilcott, controversies, fraud, reputation, tax avoidance, turing 

5. AstraZeneca forced to deny tax avoidance allegations

The British pharma giant was accused of corporation tax avoidance in October, following a newspaper report in The Guardian newspaper which claimed the company is channelling billions of pounds through Dutch subsidiaries. AstraZeneca is said to have set up a Dutch lending operation in 2013, and channelled £1.8 billion of internal group loans through the Dutch arm, charging interest of more than $140 million a year.

The firm says it acted within the law, however a company with such large revenues avoiding corporation tax is rarely popular with the public. What may particularly enflame public opinion even further is that AZ’s president of corporate finance, Ian Brimicombe, was a key advisor to the Government on the changes to the law that made the strategy possible.

4. Warner Chilcott pleads guilty to healthcare fraud

The Allergan subsidiary hit headlines over a US felony charge of healthcare fraud dating back to 2013. The case thrust the company into the spotlight in October when it was accused of making illegal kickback payments to doctors to influence them to prescribe its drugs. Company president Carl Reichel was arrested in late October, when he pleaded not guilty.

3. Takeda pays massive Actos damages

Japan’s largest pharma company was obliged to pay a massive $2.7 billion to settle nearly 9,000 lawsuits involving a cover up relating to its diabetes drug Actos, which was alleged to have caused cases of bladder cancer. The damaging case was settled in May, with Takeda protesting that the claims made in the litigation were ‘without merit’, and that it would not admit liability.

2. Valeant embroiled in prescription fraud row

The Canadian company was forced to mount a rigorous defence in October regarding its relationship with the specialist pharmacy Philidor, over claims that Valeant used the company to manipulate sales figures for some of its products.

Pharmacy employees were alleged to have been given instructions to change prescriptions to specify branded Valeant drugs where doctors had not specified a preference over generic versions. It was also claimed that Valeant used Philidor and other specialist pharmacies to distribute its products to customers directly at a discounted rate in order to bypass health insurers. Valeant later announced that it has ‘severed all ties’ with Philidor as it looked to move on from the damaging episode. It was forced to appoint a former deputy US attorney general to offer the company legal advice.

1. Turing Pharma – and that Daraprim price hike

Coverage of Turing’s 5000% overnight increase in the price of toxoplasmosis treatment Daraprim following the company’s acquisition of the drug’s rights created a political storm that has so far refused to die down. Turing CEO, former hedge fund manager Martin Shkreli, became a defiant poster boy for all that many perceive to be wrong with pharma companies, and US presidential candidates rushed to make drug pricing a key part of their electoral strategies. Turing has committed to a price reduction in the region of 10% by the end of the year, but the move is unlikely to win the company many plaudits – particularly with Daraprim’s price currently standing at $750 per pill.

Joel Levy

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