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`Each issue will include an editorial on a topic that is important for the profession of pharmacy, as well as a review of a new drug that
`includes a comparison of the new drug with previously marketed drugs that are most similar in activity, and a New Drug Comparison
`Rating (NDCR) for the new drug. Read on for this month's issue.
`
` [Download PDF format]
`
`In this issue:
`• Editorial • New Drug Review
`
`EDITORIAL:
`Is Walgreens Valeant's New
`Philidor?
`
`The title of my editorial in the September 2015 issue of The
`Pharmacist Activist is "Daraprim – The Ultimate Drug
`Pricing Outrage?" It addressed the situation in which Turing
`Pharmaceuticals raised the price of Daraprim from $13.50 a
`tablet to $750 a tablet. However, the title of that editorial
`was premature in light of more recent information regarding
`pricing and marketing strategies for certain prescription
`medications.
`
`Valeant Pharmaceuticals has grown in size by acquiring
`other pharmaceutical companies and their products.
`However, in comparison to most large pharmaceutical
`companies, its investment in research and related programs
`to develop new drugs has been very small. To many
`pharmacists, Valeant is best known for dramatic price
`increases and very high prices for its products, including
`some that are not available from other sources. As
`examples, in early 2015 Valeant acquired two drugs that
`have been marketed for many years – Isuprel injection
`(isoproterenol hydrochloride) and Nitropress injection
`(sodium nitroprusside) – and promptly raised their prices
`525% and 212%, respectively. The attempted justification
`for these increases is the observation of their outside
`consultants that the previous prices for the drugs do not
`reflect their "true value." Concerns have also been raised
`regarding the high prices for many of Valeant's dermatology
`(e.g., Jublia, Luzu, Solodyn) and ophthalmology products.
`In the financial community, however, Valeant was viewed as
`a very attractive investment – until October.
`
`NEW DRUG REVIEW:
`Mepolizumab
`(Nucala – GlaxoSmithKline)
`Antiasthmatic Agent
`
`New Drug Comparison Rating (NDCR) = 4
`(significant advantages)
`in a scale of 1 to 5, with 5 being the highest rating
`
`Indications:
`Administered subcutaneously for the add-on maintenance
`treatment of patients aged 12 years and older with severe
`asthma and with an eosinophilic phenotype; Is not
`indicated for the treatment of other eosinophilic
`conditions, or for the relief of acute bronchospasm or
`status asthmaticus.
`
`Comparable drugs:
`Omalizumab (Xolair).
`
`Advantages:
`
`May increase the effectiveness of treatment of
`patients with severe asthma and with an
`eosinophilic phenotype;
`May permit a reduction in dosage of oral
`corticosteroids;
`Has a unique mechanism of action (is an
`interleukin-5 [IL-5] antagonist);
`Less risk of anaphylaxis (labeling for omalizumab
`includes a boxed warning regarding this risk);
`Is not likely to be associated with the occurrence of
`eosinophilic conditions.
`
`Philidor
`
`Disadvantages:
`
`Philidor was a "specialty" pharmacy that was unknown to
`most prior to October 2015. In a short period of time it had
`grown to the point that it had hundreds of employees. Its
`growth apparently was attributable to its "specialization" in
`dispensing Valeant products. However, from information
`learned from internal documents and former employees,
`serious questions exist about its operations. It is alleged that
`Philidor employees used strategies to dispense high-priced
`Valeant products (e.g., hundreds of dollars for a 60-gram
`tube of Luzu) instead of much less expensive equivalent
`products. The strategies were designed to obtain maximum
`reimbursement from PBMs and insurance companies with
`explanations such as prescribers had insisted that the brand-
`name Valeant product be dispensed as written. Prescription
`
`Labeled indications are more limited (indications
`for omalizumab include patients with moderate to
`severe allergic asthma, as well as chronic
`idiopathic urticaria).
`
`Most important risks/adverse events:
`Hypersensitivity reactions (e.g., rash, pruritus,
`angioedema, bronchospasm; treatment should be
`discontinued if reactions occur); should not be used to
`treat acute bronchospasm or status asthmaticus; reduction
`in dosage or discontinuation of systemic or inhaled
`corticosteroids (if appropriate, dosage should be reduced
`gradually under the supervision of a physician, to avoid
`systemic withdrawal symptoms and/or unmasking of
`
`1 of 4
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`11/16/2017, 1:30 PM
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`Page 1 of 4
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1543(a)
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`
`
`February 2016 issue - The Pharmacist Activist
`
`http://www.pharmacistactivist.com/2016/February_2016.shtml#topofpage
`
`Home
`
`Subscription
`
`September 2017 issue
`
`August 2017 issue
`
`July 2017 issue
`
`June 2017 issue
`
`May 2017 issue
`
`April 1, 2017 issue
`
`March 2017 issue
`
`February 2017 issue
`
`January 2017 issue
`
`BACK ISSUES
`
`2016
`
`2015
`
`2014
`
`2013
`
`2012
`
`2011
`
`2010
`
`2009
`
`2008
`
`2007
`
`2006
`
`Each issue will include an editorial on a topic that is important for the profession of pharmacy, as well as a review of a new drug that
`includes a comparison of the new drug with previously marketed drugs that are most similar in activity, and a New Drug Comparison
`Rating (NDCR) for the new drug. Read on for this month's issue.
`
` [Download PDF format]
`
`In this issue:
`• Editorial • New Drug Review
`
`EDITORIAL:
`Is Walgreens Valeant's New
`Philidor?
`
`The title of my editorial in the September 2015 issue of The
`Pharmacist Activist is "Daraprim – The Ultimate Drug
`Pricing Outrage?" It addressed the situation in which Turing
`Pharmaceuticals raised the price of Daraprim from $13.50 a
`tablet to $750 a tablet. However, the title of that editorial
`was premature in light of more recent information regarding
`pricing and marketing strategies for certain prescription
`medications.
`
`Valeant Pharmaceuticals has grown in size by acquiring
`other pharmaceutical companies and their products.
`However, in comparison to most large pharmaceutical
`companies, its investment in research and related programs
`to develop new drugs has been very small. To many
`pharmacists, Valeant is best known for dramatic price
`increases and very high prices for its products, including
`some that are not available from other sources. As
`examples, in early 2015 Valeant acquired two drugs that
`have been marketed for many years – Isuprel injection
`(isoproterenol hydrochloride) and Nitropress injection
`(sodium nitroprusside) – and promptly raised their prices
`525% and 212%, respectively. The attempted justification
`for these increases is the observation of their outside
`consultants that the previous prices for the drugs do not
`reflect their "true value." Concerns have also been raised
`regarding the high prices for many of Valeant's dermatology
`(e.g., Jublia, Luzu, Solodyn) and ophthalmology products.
`In the financial community, however, Valeant was viewed as
`a very attractive investment – until October.
`
`NEW DRUG REVIEW:
`Mepolizumab
`(Nucala – GlaxoSmithKline)
`Antiasthmatic Agent
`
`New Drug Comparison Rating (NDCR) = 4
`(significant advantages)
`in a scale of 1 to 5, with 5 being the highest rating
`
`Indications:
`Administered subcutaneously for the add-on maintenance
`treatment of patients aged 12 years and older with severe
`asthma and with an eosinophilic phenotype; Is not
`indicated for the treatment of other eosinophilic
`conditions, or for the relief of acute bronchospasm or
`status asthmaticus.
`
`Comparable drugs:
`Omalizumab (Xolair).
`
`Advantages:
`
`May increase the effectiveness of treatment of
`patients with severe asthma and with an
`eosinophilic phenotype;
`May permit a reduction in dosage of oral
`corticosteroids;
`Has a unique mechanism of action (is an
`interleukin-5 [IL-5] antagonist);
`Less risk of anaphylaxis (labeling for omalizumab
`includes a boxed warning regarding this risk);
`Is not likely to be associated with the occurrence of
`eosinophilic conditions.
`
`Philidor
`
`Disadvantages:
`
`Philidor was a "specialty" pharmacy that was unknown to
`most prior to October 2015. In a short period of time it had
`grown to the point that it had hundreds of employees. Its
`growth apparently was attributable to its "specialization" in
`dispensing Valeant products. However, from information
`learned from internal documents and former employees,
`serious questions exist about its operations. It is alleged that
`Philidor employees used strategies to dispense high-priced
`Valeant products (e.g., hundreds of dollars for a 60-gram
`tube of Luzu) instead of much less expensive equivalent
`products. The strategies were designed to obtain maximum
`reimbursement from PBMs and insurance companies with
`explanations such as prescribers had insisted that the brand-
`name Valeant product be dispensed as written. Prescription
`
`Labeled indications are more limited (indications
`for omalizumab include patients with moderate to
`severe allergic asthma, as well as chronic
`idiopathic urticaria).
`
`Most important risks/adverse events:
`Hypersensitivity reactions (e.g., rash, pruritus,
`angioedema, bronchospasm; treatment should be
`discontinued if reactions occur); should not be used to
`treat acute bronchospasm or status asthmaticus; reduction
`in dosage or discontinuation of systemic or inhaled
`corticosteroids (if appropriate, dosage should be reduced
`gradually under the supervision of a physician, to avoid
`systemic withdrawal symptoms and/or unmasking of
`
`1 of 4
`
`11/16/2017, 1:30 PM
`
`Page 1 of 4
`
`
`
`February 2016 issue - The Pharmacist Activist
`
`http://www.pharmacistactivist.com/2016/February_2016.shtml#topofpage
`
`co-pays were discounted or waived for patients as an
`incentive to have them use Philidor's mail-order pharmacy,
`and prescription refills were provided without being
`specifically requested by patients. The following example
`provides further insights regarding the strategies employed.
`
`Luliconazole (Luzu) cream is a topical azole antifungal
`agent that was approved by the FDA in late 2013 for the
`treatment of interdigital tinea pedis, tinea cruris, and
`tinea corporis. One of Valeant's statements in promoting
`the product is, "Luzu is the only topical azole antifungal
`approved to treat athlete's foot between the toes with
`once-daily, 2-week treatment." This statement is accurate
`but conveniently ignores the availability of other topical
`antifungal agents such as terbinafine (Lamisil AT) that is
`used for this condition once-daily for just 1 week. When
`I reviewed luliconazole as a new drug, it was one of a
`very few drugs to which I have given the lowest rating of
`1 (important disadvantages) on a scale of 1 to 5 in my
`New Drug Comparison Rating system. I remember
`wondering to myself who would use this prescription
`product when terbinafine is at least equally effective, is
`available without a prescription, is used for a shorter
`treatment period, and is much less expensive. I didn't
`have to wait long to find out from the following
`experience shared by a patient.
`
`The patient was prescribed Luzu for athlete's foot but
`was surprised that the prescriber suggested that he obtain
`the prescription from a mail-order pharmacy (Philidor)
`that would cover the co-pay for the first prescription. The
`prescription was delivered and several weeks later the
`patient received a call from Philidor offering to waive his
`co-pay for all his remaining refills. The patient observed
`that he probably would not have needed or ordered the
`refills if he would have been charged a co-pay. He now
`has "a few years' supply of athlete's foot cream" and is
`also suspicious of what incentives the prescriber may
`have received, as well as the relationship between
`Valeant and Philidor.
`
`Other questions also exist regarding Philidor's operations
`and the Philidor - Valeant relationship. At least some of
`Philidor's employees were asked by the company to sign
`agreements that they would not discuss the company's
`operations. Philidor moved to acquire or open pharmacies in
`other states for the apparent purpose of having multiple
`pharmacies from which to submit claims to PBMs and
`insurance companies. To the credit of the California Board
`of Pharmacy, it denied issuing a license because of
`questions regarding the ownership and operations of
`Philidor.
`
`Philidor is Valeant (or not?)
`
`The more that is learned about Philidor, the stronger the
`allegations become. It has been alleged to be a "phantom
`pharmacy" that existed to increase the sales of Valeant
`products using questionable practices. Its business and
`accounting practices have been questioned. It has been
`alleged to be owned by or operated under the direction of
`Valeant. For many months there had not been a general
`awareness of a relationship between Valeant and Philidor.
`However, it is now known that Philidor accounted for about
`7% of Valeant's revenue. Valeant has reported that in late
`2014 it paid $100 million for an option to buy Philidor.
`
`conditions previously suppressed by systemic
`corticosteroid therapy); opportunistic infections (risk of
`herpes zoster infection and, if appropriate, varicella
`vaccination should be considered prior to starting
`treatment); helminth infections (should be treated prior to
`starting treatment; if a helminth infection develops
`during treatment and does not respond to anti-helminth
`treatment, mepolizumab should be discontinued until the
`infection resolves).
`
`Most common adverse events:
`Headache (19%), injection site reactions (8%), back pain
`(5%), fatigue (5%).
`
`Usual dosage:
`100 mg every 4 weeks administered subcutaneously into
`the upper arm, thigh, or abdomen.
`
`Products:
`Single-dose vials – 100 mg of lyophilized powder for
`reconstitution; should be reconstituted and administered
`by a healthcare professional; contents of a vial should be
`reconstituted with 1.2 mL of Sterile Water for Injection;
`reconstituted solution should not be shaken to avoid
`foaming and/or precipitation; product labeling should be
`consulted for specific recommendations for
`reconstitution and administration.
`
`Comments:
`Many patients with asthma do not experience adequate
`reduction of symptoms and associated complications
`with available treatments, and there are more than
`400,000 asthma-related hospitalizations each year in the
`United States. Multiple cell types, including eosinophils,
`and mediators (e.g., cytokines) are involved in the
`inflammatory process that occurs in the airways of the
`lungs. Interleukin-5 (IL-5) is the major cytokine that is
`responsible for the growth and differentiation,
`recruitment, activation, and survival of eosinophils.
`Mepolizumab is an IL-5 antagonist that reduces the
`production and survival of eosinophils. It has been
`approved for use in conjunction with other maintenance
`treatments for patients with severe asthma and with an
`eosinophilic phenotype.
`
`The effectiveness of mepolizumab was demonstrated in
`three placebo-controlled trials in which either the new
`drug or placebo was added to an existing treatment
`regimen (e.g., oral and/or inhaled corticosteroids). In one
`of the studies, the primary endpoint was the percent
`reduction of the oral corticosteroid dose during weeks 20
`to 24 compared with the baseline dose, while maintaining
`asthma control. Twenty-three percent of the patients
`treated with mepolizumab had a 90% to 100% reduction
`in their oral corticosteroid dose, compared with 11% in
`the placebo group. Additionally, 54% of patients treated
`with the new drug achieved at least a 50% reduction in
`the daily prednisone dose compared with 33% of those
`receiving placebo. Mepolizumab did not provide
`consistent improvements in mean change from baseline
`in mean forced expiratory volume in 1 second (FEV1).
`
`Daniel A. Hussar
`
`[To Top]
`
`2 of 4
`
`11/16/2017, 1:30 PM
`
`Page 2 of 4
`
`
`
`February 2016 issue - The Pharmacist Activist
`
`http://www.pharmacistactivist.com/2016/February_2016.shtml#topofpage
`
`Current or former Valeant employees using fake names
`were alleged to be involved in the operations of Philidor.
`
`As the concerns of investors and others intensified and
`Valeant's stock value plunged, Valeant decided to end the
`relationship with Philidor. A letter dated November 2, 2015
`from the CEO of Valeant to physicians and other healthcare
`professionals includes the following statement:
`
`"We know many doctors and patients were concerned
`about the recent allegations surrounding Philidor's
`business practices, and so were we. Given those
`questions, we decided it was appropriate to terminate our
`relationship with Philidor."
`
`The CEO of Valeant has also stated that "Operating honestly
`and ethically is our first priority…" Both Philidor and
`Valeant announced that Philidor would be shutting down its
`operations.
`
`The more that is learned about the Valeant - Philidor
`relationship and their business practices, the questions and
`suspicions become even stronger that there is much more
`still to be learned. As an important example, how could
`Valeant pay $100 million for an option to purchase Philidor
`and now try to claim that it was unaware of its business
`practices?
`
`Valeant and Walgreens
`
`On December 15, 2015 Valeant and Walgreens jointly
`announced 20-year fulfillment agreements involving the
`two companies that are "designed to help enhance patient
`care through expanded services and lower out-of-pocket
`expenses." The announcement notes that Valeant will reduce
`prices by 10% for all its dermatological and
`ophthalmological products distributed through more than
`8,000 Walgreens retail outlets. It is further noted that
`Valeant plans to further extend distribution of these products
`to "additional participating independent pharmacies"
`(editor's note: Independent pharmacies beware!).
`
`The announcement also identifies a separate agreement that
`states:
`
`"Valeant will also distribute certain branded products,
`that have generics available, in the dermatology,
`ophthalmology, gastrointestinal and neurology/other
`therapeutic areas through Walgreens at generic prices; an
`expected average price decrease of more than 50
`percent."
`
`Glumetza (metformin extended-release tablets) is one of the
`products included in this separate agreement. Valeant raised
`the price of Glumetza by 800% in 2015, resulting in harsh
`criticism from the patients who suddenly had to pay much
`more for the drug, as well as many others. Express Scripts
`has announced that when generic versions of Glumetza
`become available this month that it will block
`reimbursement for Glumetza. The chief medical officer of
`Express Scripts has also indicated that every claim for
`Valeant products will be getting "extra scrutiny" to be sure
`that the PBMs rules are being followed.
`
`The Valeant – Walgreens agreements warrant investigation,
`if in fact it will be possible to learn the specific terms and
`
`3 of 4
`
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`Page 3 of 4
`
`
`
`February 2016 issue - The Pharmacist Activist
`
`http://www.pharmacistactivist.com/2016/February_2016.shtml#topofpage
`
`financials of the agreements. However, just based on the
`statements noted above, it can be concluded that when a
`discount of 10%, 50%, or some other percentage is deducted
`from an outrageously high price, the discounted price will
`still be very high and may still be much higher than that of
`other products that are equivalent in effectiveness and
`safety.
`
`Numerous questions exist. It has been suggested that the
`Valeant – Walgreens agreements may result in "savings" by
`avoiding the middlemen (i.e., wholesalers). If Express
`Scripts and other PBMs will not cover Valeant products like
`Glumetza, Jublia, and Luzu, will Valeant/Walgreens provide
`alternative prescription benefit coverage for patients for
`whom these products are prescribed, thereby avoiding the
`PBM middlemen? If so, will the prescription benefit
`coverage for patients for these products be similar to or
`better than their previous coverage? Will Walgreens receive
`fees from Valeant for dispensing prescriptions for these
`products that are higher than the fees that would be
`expected from a PBM? Is it true that Walgreens will receive
`Valeant drugs on consignment, thereby enabling it to reduce
`inventory costs? What financial incentives are being
`provided to Walgreens that have resulted in its participation
`in long-term agreements with a company whose drug prices
`and business practices have been so strongly criticized? Is
`Walgreens Valeant's new Philidor? Can Walgreens withdraw
`from the agreements?
`
`And more questions
`
`When concerns about Philidor's operations and its
`relationship with Valeant became public in the fall of 2015,
`Valeant appointed an Ad Hoc Committee of the Board of
`Directors to review the company's relationship with Philidor
`and related matters. On February 23, it was announced that
`there has been a preliminary identification of certain sales to
`Philidor (approximately $58 million of net revenues) that
`should have been recognized when products were dispensed
`to patients rather than on delivery to Philidor. The questions
`regarding the accounting practices are likely to necessitate a
`restatement of Valeant's earnings. But will the review of this
`Committee go beyond the evaluation of accounting
`practices? For example, will the allegation that current or
`former employees of Valeant were involved in the
`operations of Philidor be investigated? The questions
`continue!
`
`Daniel A. Hussar
`
`[To Top]
`
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`Page 4 of 4
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`