Drug industry: Pharmaceutical companies find ways to cope as patents expire; FDA criticized for consulting contracts

The Philadelphia Inquirer: "There is a simple explanation for most of the mergers and acquisitions in the pharmaceutical world these days: the so-called Patent Cliff. Simply put, many of the drug industry's biggest earners — blockbuster medications that have paid the bills for the last decade — are about to lose their patent protections." Though patent losses will benefit consumers and insurers by making generic drugs more accessible, they will "mean big pharmaceutical companies are looking at gaping holes in their portfolios." To find "replacement dollars," pharmaceutical companies are buying businesses with "existing products," expanding research budgets, cutting costs and jobs, and expanding into new, global markets (Hepp, 11/12).

The Wall Street Journal: "The Food and Drug Administration has been paying consultants millions of dollars for management help —including leadership classes held at a Civil War battlefield — amid concerns in Congress that the contracts aren't helping the agency to clear long backlogs." The contracts include consulting firm McKinsey & Co., which "has signed contracts for more than $17 million for work at the FDA since 2008 including $10 million in 2010" and Colorado-based Leadership Performance Solutions valued at $7.9 million. "Both companies have worked with the FDA's office of generic drugs, which has a backlog of about 2,000 drug applications" and an average waiting time for approval of two years. …  'Why on earth are FDA managers spending money for a consultant to tell them why they have a backlog of generic drug applications?' said Rep. Joe Barton of Texas, the top Republican on the House Energy and Commerce Committee. An FDA spokeswoman said McKinsey's work for the generic-drug office was only a small part of the firm's overall contract with the FDA set up earlier this year" (Mundy, 11/12).

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This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.