'FTC Oversight of Pharmaceutical Sector 'Minimal' Over Last 20-Plus Years'

 The Federal Trade Commission (FTC) pursued about one merger action and three enforcement actions per year in the pharmaceutical industry over the last two decades, accounting for only a sliver of the alleged misconduct in the sector, a study of publicly available documents showed.

From 2000 to 2022, the FTC initiated or completed a total of 85 actions in the pharmaceutical sector, including 62 challenges of mergers, 22 enforcement actions against allegedly unlawful business practices, and one rule related to pharmaceuticals, reported Aaron Kesselheim, MD, JD, MPH, of Brigham and Women's Hospital and Harvard Medical School in Boston, and colleagues.

Of the 62 mergers the FTC challenged, 61 were given the greenlight after settlements, and one was abandoned. The 22 enforcement actions led primarily to settlements, as well as one FTC order and one judgment in the agency's favor, they noted in JAMAopens in a new tab or window.

"The FTC's regulatory power is formidable," the authors noted. As the agency in charge of protecting U.S. consumers and promoting competition, the FTC can collect substantial monetary payments and can release binding orders targeting companies engaged in unfair practices. It can also block mergers it deems anticompetitive.

Yet a review of the breadth and type of actions taken by the agency suggests it hasn't exercised its full potential in this sector, Kesselheim told MedPage Today, noting that it's "remarkable" how few mergers the agency challenged, given their numbers.

"The forces of competition depend on there being a fair playing field, and that's what the FTC is supposed to enforce," he added.

One reason for the minimal oversight by the FTC may be resource constraints, he explained. The political environment and culture under different administrations is another. However, under the Biden administration, the agency has taken a "much more active posture on enforcement," Kesselheim said.

In an accompanying editorialopens in a new tab or window, Amy Kapczynski, JD, of Yale Law School in New Haven, Connecticut, noted that the FTC and the Department of Justice's Antitrust Division issued new merger guidelinesopens in a new tab or window in 2023, giving the agency more latitude to scrutinize mergers.

Previously, in June 2022, the agency announced an investigation into the business practices of pharmaceutical benefit managersopens in a new tab or window. And in November 2023, the agency issued warnings to drug companies to remove improperly listed patents in the FDA's Orange Bookopens in a new tab or window.

Still, the agency faces "an increasingly hostile Supreme Court, which is accruing authority unto itselfopens in a new tab or window and divesting it from agencies and even Congress," Kapczynski pointed out.

"If the FTC is to play a larger role in pursuing unfair and anticompetitive conduct in the pharmaceutical industry, it requires not just concerted leadership, but also more authority and funding from Congress, particularly if courts broadly weaken regulatory agencies, as they appear to be poised to do," she wrote.

Kesselheim and colleagues also stressed that "important tools remain untested," highlighting the importance of rulemaking, which Kesselheim characterized as a useful deterrent, because it clarifies expectations for what companies can and can't do upfront.

Mergers Under the Microscope

In 58 of the 61 allowed mergers, divestment of certain drugs to a third-party competitor was a condition of the settlement. Divestiture requirements might involve supplying the drug until the competitor is able to produce it, or helping a competitor through the FDA approval process.

In all, 332 drugs were required to be divested, including 38 approved brand-name drugs, 184 approved generic drugs, 15 investigational drugs, and 95 generic drugs in the development phase. The median number of drugs divested as part of a settlement was 3 (interquartile range 1-5; full range 0-79). The number of divestitures per year fell from 18 in 2000-2017 to 4.3 in 2017-2023.

Seven settlements called for additional conditions outside of divestiture, such as limiting the future purchase of certain drugs without the FTC's prior approval.

Enforcement Actions, Rulemaking

With regard to the 22 enforcement actions, defendants in all cases were corporations, with two exceptions: Martin Shkreliopens in a new tab or window and Kevin Mulleady, pharmaceutical executives sued for anticompetitive monopolization of pyrimethamine (Daraprim), a medication that treats toxoplasmosis.

The misconduct involved in these enforcement actions spanned four categories, which were not mutually exclusive. In total, the authors identified 11 settlements of patent litigation, six actions related to unilateral delays, four noncompete agreements, and three cases of monopolization.

Five of 11 patent settlement-related cases involved brand-name manufacturers that struck deals, including "ostensibly unrelated but excessively one-sided" licensing agreements, which favored the generic manufacturer; in four cases, brand-name manufacturers offered payments in lump sums, revenue sharing deals, or by other means; and in another four cases, the brand-name manufacturer agreed not to launch an authorized generic (so-called "pay-to-delay" deals).

Fourteen of the 22 actions involved complaints filed in federal district court, and eight were internal adjudications. One of the 22 actions is ongoing (as of February), and the other 21 were tied to 29 outcomes: 23 settlements, four court judgments, one final FTC order, and one withdrawal by the FTC.

Of the four court judgments, the FTC succeeded in just one: the case against Shkreli. The agency lost two cases after "failing to convince courts that the companies were engaging in unlawful behavior," and lost another because the court determined that the agency couldn't address past misconduct.

The agency withdrew one case related to alleged anticompetitive conduct by AbbVie, after a Supreme Court ruling in a different case made it clear that the agency would not obtain a monetary penalty.

Ten outcomes -- nine of 23 settlements and one judgment -- involved a monetary payment, which, in all, amounted to $1.6 billion. Its largest payment of $1.2 billion came from Cephalon and was tied to an anticompetitive settlement of patent litigation that delayed generic competition of modafinil (Provigil).

As for rulemaking, the FTC issued one notice-and-comment rule in 2013 "deeming certain patent rights to be reportable assets for antitrust review," Kesselheim and team noted. Industry sued, but the courts sided with the agency.

For this study, legal actions from 2000 to 2022 were assessed following a manual review of search results from FTC's online Legal Library, as well as a 2023 FTC report on pharmaceutical actions. The alleged misconduct, type of legal action taken, timing, and outcomes were collected from press releases, complaints, orders, and other legal documents.

A strength of the study was its use of a "relatively novel dataset," Kesselheim noted.

A limitation of the study was that it relied on publicly available information. Since the FTC may work quietly on an action for long periods before announcing it, there may be actions that the study authors did not capture in their review.

Disclosures

This study was funded by Arnold Ventures.

Kesselheim reported receiving personal fees from the Federal Trade Commission by serving as an outside expert in two merger cases in 2023, as well as for a class of state Attorneys General and payers in a case involving generic drug price fixing.

Kapczynski reported no conflicts of interest.

Primary Source

JAMA

Source Reference: opens in a new tab or windowDaval CJR, et al "Federal Trade Commission actions on prescription drugs, 2000-2022" JAMA 2024; DOI: 10.1001/jama.2024.5737.

Secondary Source

JAMA

Source Reference: opens in a new tab or windowKapczynski A "Federal Trade Commission oversight of the pharmaceutical industry" JAMA 2024; DOI: 10.1001/jama.2024.1509.

https://www.medpagetoday.com/washington-watch/washington-watch/110224

'Endoscopic Ablation Reduces 'Hunger Hormone,' Yields Weight Loss in Early Trial'

  Endoscopic gastric fundus mucosal ablation (GFMA) as a means of reducing production of the hunger-modulating hormone ghrelin was technically feasible and safe in a first-in-human study, and led to reductions in hunger and weight.

In the 6-month trial of 10 women with obesity, analysis of the primary endpoints showed that endoscopic GFMA reduced mean fasting ghrelin plasma levels and meal capacity as measured by maximum tolerated volume by more than 40% from baseline to study end (P=0.006 and P<0.005, respectively), reported Christopher McGowan, MD, of the True You Weight Loss clinic in Cary, North Carolina.

Furthermore, the patients in the so-called ABLATE WEIGHT trial had decreased hunger, improved confidence in being able to avoid overeating, and lost an average 7.7% of their body weight at 6 months (P<0.0009), he detailed in a presentation at the Digestive Disease Weekopens in a new tab or window annual conference.

McGowan, who performed all the procedures himself at his clinic, explained in his presentation that the "gastric fundus is a key regulator of appetite through hormonal and visceroceptive pathways" (specifically ghrelin production within the oxyntic mucosa and satiation via vagal feedback during prandial distention), but "currently, the only means of directly altering these pathways is surgical resection or bypass."

As such, an endoscopic method to achieve this would represent a novel treatment for obesity.

Noting that the trial and the work is in its infancy, Syed Adeel Hassan, MBBS, of the University of Kentucky in Lexington, told MedPage Today that an endoscopic approach "could be a game-changer for weight-loss procedures." He pointed out that more invasive weight-loss surgeries carry risks for bleeding and other complications, in addition to a long recovery time, while GFMA in the study was done in an office setting as an outpatient procedure.

But it remains to be seen how the weight-loss results with GFMA will pan out long-term, Hassan cautioned, and whether they will be on par or superior to Roux-en-Y gastric bypass or other invasive surgical techniques.

"We also have to be alert for complications in the long-term," he said. "Any time you are ablating a hormone source, we need to see if there are consequences elsewhere in the body. We need to see a larger study with comparator treatments over a longer time to assess how well this will fit into weight-loss programs."

In the study, GFMA was performed successfully in all 10 cases, with no serious adverse events (AEs), said McGowan. "All the AEs were grade 1 and were treated conservatively, often with over-the-counter gas-relief products," he said. "All the patients experienced abdominal cramping or discomfort, and most complained of nausea."

The prospective ABLATE WEIGHTopens in a new tab or window study was a single-center, open-label trial that included 10 women (mean age 38.4 years) with an average body mass index of 40.5 (range 35.7-50). Average procedure duration was 84.4 minutes, and the average volume injected for submucosal lift was 240.3 mL.

For the primary endpoints, mean fasting ghrelin plasma levels decreased from 461.6 pg/mL at baseline to 254.8 pg/mL at 6 months while maximum tolerated volume, assessed during a standardized nutrient drink test, decreased from 807 mL to 467.3 mL.

Secondary endpoints included change in total body weight; change in appetite, hunger, and cravings using the DAILY-EATSopens in a new tab or window questionnaire (a 0-10 scale); change in the ability to resist overeating via the Weight Efficacy Lifestyle Questionnaire Short Form (WEL-SFopens in a new tab or window; a 0-80 scale); safety; and technical success.

Hunger scores decreased from 6.2 at baseline to 4.0 at 6 months (P=0.002) while scores on the Eating Drivers Index (hunger, appetite, cravings) decreased from 7.0 to 4.0 (P<0.001). Confidence to avoid overeating on the WEL-SF increased from 47.4 at baseline to 62.4 at study end (P=0.001).

AEs included abdominal cramping/discomfort in 100% of the women, nausea in 90%, gas in 30%, burping in 20%, along with vomiting, constipation, and aversion to savory foods (10% each).

McGowan said the study is a first step in evaluating the endoscopic procedure, and the goal is to eventually include a larger cohort of patients with longer follow-up, as well as an evaluation of GFMA combined with restrictive eating and endoscopic bariatric therapies. Future research also will look at wider ablative territories, including the gastric body, for enhanced remodeling.

Disclosures

McGowan disclosed a relationship with Boston Scientific.

Hassan disclosed no relationships with industry.

Primary Source

Digestive Disease Week

Source Reference: opens in a new tab or windowMcGowan C, et al "Endoscopic mucosal ablation of the gastric fundus in adults: a first-in-human study" DDW 2024; Abstract 516.

https://www.medpagetoday.com/meetingcoverage/ddw/110245

How will the US and allies use Russia's frozen assets to aid Ukraine?

 European Union countries formally adopted a plan on Tuesday to use windfall profits from Russian central bank assets frozen in the EU for Ukraine's defence. It is the first in what could be a series of moves by the G7 group of large Western nations to utilise the near $300 billion worth of Moscow's assets that have been immobilised, but it remains a highly complex and controversial precedent.

Here is what has been done and some of the other ideas being looked at:

SIPHONING OFF PROCEEDS Tuesday's EU move exploits the fact that the lion's share of the Russian reserves - essentially bonds and other types of securities in which the Russian central bank had invested - are held in a Brussels-based depository called Euroclear.

Under the agreement, 90% of the proceeds that the bonds generate will go into an EU-run fund for military aid for Ukraine, with the other 10% going to support Kyiv in other ways. The EU expects the assets to yield about 15-20 billion euros ($16-$22 billion) in profits by 2027. Ukraine is expected to receive the first tranche of around 3.5 billion euros in July. This will be on top of a 50 billion euro support programme that the EU set up on Feb. 1. Some are still wary, though, including the European Central Bank, which has said that any seizure of the Russian assets should only be done in concert with other G7 powers. They want to ensure it is not only the euro that is affected if other countries such as China start repatriating their reserves as a precaution against their being frozen. Some lawyers also say that, legally, there is little difference between siphoning off the bonds' revenues and seizing the full $300 billion or so. There is a risk that Russia could, through court action, try to seize Euroclear cash in securities depositories in Hong Kong, Dubai and elsewhere. This could potentially drain Euroclear's capital and require a huge bailout. There are plans, therefore, to set aside some of the siphoned-off money as a safety net.

COLLATERALISED LOAN U.S. Treasury Secretary Janet Yellen will next week push fellow G7 finance officials - from Japan, Germany, France, Britain, Italy and Canada - to get the interest earnings on the frozen Russian assets to Ukraine far more quickly. The U.S. wants to pull forward the interest on the assets to back a bond or a loan that would provide Ukraine with perhaps $50 billion as it battles increasing Russian military pressure in its east and north. 'Collateralising' the Russian assets for loans instead of seizing them outright could be more palatable to some European countries and others elsewhere in the world. Daleep Singh, the U.S. deputy national security adviser who is one of the architects of the plan, has said it is conceptually possible to transfer 10 or even 30 years of future profits.

Sources briefed on the plans say the goal is to reach a decision at the G7 leaders' annual summit in Italy in June.

FULL CONFISCATION Washington continues to back the idea of seizing the immobilised Russian reserves in their entirety and handing them to Ukraine, though it acknowledges that other countries would need to be on board, something that is not the case at the moment. Some top lawyers argue it can be done under a doctrine of international law known as "countermeasures". The assets would then be sold or collateralised and the proceeds handed to Ukraine, or to its dedicated reconstruction fund. European officials raise concerns, however, that it could violate international law and open a Pandora's box as Russia challenges the move in the courts. Previous examples of such seizures, such as of Iraqi assets after Iraq's 1990 invasion of Kuwait, and of German assets after World War Two, happened after those wars had ended, not while they were still raging - as with Russia's invasion of Ukraine. Even in the United States, leading sovereign debt experts have highlighted that the International Emergency Economic Powers Act (IEEPA) does not authorise an outright confiscation of frozen Russian property in the absence of actual armed conflict between the U.S. and Russia. The IMF is wary too. Its managing director, Kristalina Georgieva, urged G7 nations on May 21 to think "very carefully" about how they use the Russian assets.

REPARATION BONDS "Reparation bonds" have also been suggested as a way of circumventing some of the legal problems. Ukraine would sell securities that pay out if - and only if - it receives reparations for the devastation inflicted by the war.

Interest payments could also roll up and only become payable if Kyiv gets compensation. The bondholders would not have a contractual claim on the Kremlin’s frozen reserves. But given that Russia is unlikely to pay up willingly, these assets would be the most likely source of reparation money.

Since the reserves are accruing interest, they could be used to pay both the bonds’ principal and more regular coupon payments. This would be different from confiscation, because the assets would only be transferred if a legitimate compensation mechanism first ruled that damages were due to Ukraine.

Ukraine would have a way to collect on any damages awarded up to the value of the reserves. It could therefore issue reparation bonds up to $300-350 billion. But it would only get anything like this sum if the United States, EU governments and other allies were willing to buy the securities.

SYNDICATED LOAN The bond idea has been fleshed out further by Singh, Lee Buchheit, a veteran legal expert in sovereign debt, and Reuters Commentator-at-Large Hugo Dixon.

Their view is that Ukraine could pledge its claim against Russia to a syndicate of its allies in return for a loan. If Moscow refused to pay the damages, the allies could then use Russia’s frozen assets to pay off the loan. The justification for doing this is the widely recognised legal principle that if a creditor controls a debtor’s assets, it can set off those assets against an unpaid debt.

https://www.marketscreener.com/news/latest/How-will-the-US-and-allies-use-Russia-s-frozen-assets-to-aid-Ukraine-46787025/

UN plans new routes for halted Gaza aid deliveries from US-built pier

 The United Nations is planning new routes to distribute aid from a U.S.-built pier in Gaza, a spokesperson said, after crowds of needy residents intercepted trucks, causing a halt to deliveries that continued for a third day on Tuesday.

The temporary, floating pier is meant to help ease the humanitarian crisis in Gaza, though aid workers say that only deliveries through land borders can ensure relief on the scale that is needed.

Operations at the pier began on Friday and the U.N. said 10 truckloads of food aid - transported from the pier by U.N. contractors - were received at a World Food Programme (WFP) warehouse in Deir El Balah in Gaza. But on Saturday, only five truckloads made it to the warehouse after 11 others were intercepted.

Distribution was then paused as logistics teams planned new routes and coordination of deliveries in an effort to prevent more aid being intercepted, said Abeer Etefa, a WFP spokesperson in Cairo.

"The missions were planned for today using the new routes to avoid the crowds," she said. "Up until now we haven't heard that they moved."

The pier has been met with hope and scepticism by residents in Gaza.

"The pier should be there when the (Israeli) occupation completely ends. Then, it will be good for us. It will be good to travel, to get things," said one, Abu Nadi al-Haddad, questioning why it was needed now, given the existence of several land crossings.

'WAITING FOR AMERICAN AID'

Another resident, Abu Nasser Abu Khousa, came to the coastal road close to where the pier is located with his four-year-old son and a donkey-drawn cart in the hope of receiving aid.

"We are waiting for the American aid, but we did not get anything," he said, adding that he had lost his home in the war and had been displaced multiple times.

"We will come back tomorrow, God willing, in the hope that we will get some aid, that will help us survive."

The war between Israel and Hamas that broke out last October has caused a deep humanitarian crisis in Gaza, with many of the coastal enclave's 2.3 million residents facing chronic shortages of food and medicines.

Deliveries of international aid have fallen sharply since Israel stepped up military operations in and around the southern city of Rafah on May 7, closing the Rafah border crossing to Egypt's Sinai Peninsula.

Aid offloaded at the floating pier comes by ship from Cyprus, where it is first inspected by Israel. The pier operation is estimated to cost $320 million and involve 1,000 U.S. service personnel.

U.S. Central Command said late on Monday that more than 569 metric tonnes of relief donated by the U.S., Britain, the United Arab Emirates and the European Union had so far been delivered to the pier.

It was unclear how much aid has been waiting at the pier since distribution by the U.N. into Gaza was suspended on Saturday.

https://www.yahoo.com/news/un-plans-routes-halted-gaza-165957640.html

Meta deleted Facebook account of Slovak PM's shooter after attack

 Meta Platforms' Facebook removed the account of the suspected shooter of Slovak Prime Minister Robert Fico after the attack, the company and a state agency said on Tuesday, as the government continues to probe whether the attacker had help.

Fico is recovering in hospital and no longer in immediate danger after being hit by four bullets last Wednesday, in the first major assassination attempt on a European political leader for more than 20 years.

Slovak government officials said on Sunday, four days after the shooting, that the attacker may have not been a "lone wolf" as first believed, with one factor being that the suspect's Facebook and communication history was deleted after the attack.

Interior Minister Matus Sutaj Estok had said an investigation team had been set up, which would also look into whether the suspect acted as part of a group of people who had been encouraging each other to carry out an assassination.

On Tuesday, Meta said it had removed the attacker's account on the night of the incident and had informed Slovak authorities about the removal. It remained in touch with authorities and law enforcement, it said.

News websites Dennik N and Aktuality were the first to report Meta had removed the attacker's Facebook profile.

The state Council for Media Services, which had been in contact with Facebook and other social media platforms immediately after the attack, also said in a statement that Meta had informed it on Tuesday of the account removal.

Sutaj Estok told broadcaster TA3 on Tuesday evening the most likely version was still the attacker had accomplices but investigators were working on both possibilities, including him acting alone.

"I guarantee we will investigate everything," he said.

Sutaj Estok had said on Sunday when discussing the possible involvement of more people that "I think that two hours after... committing this act, the perpetrator had all Facebook and communication history erased, and it was not erased by him or apparently by his wife."

Officials have said the attack on Fico was politically motivated. Local news media say the suspect - identified by prosecutors as Juraj C. - is a 71-year-old former security guard at a shopping mall and the author of three collections of poetry.

There has been no official statement made public from the suspect, or any lawyer representing him.

https://finance.yahoo.com/news/meta-deleted-facebook-account-slovak-190737319.html

Morgan Stanley's Gorman says banking industry consolidation is "inevitable"

 Morgan Stanley executive chairman James Gorman said on Tuesday consolidation in the U.S. banking industry is "inevitable" as large lenders face competitive pressure to get bigger.

Gorman was speaking at a conference at the Federal Reserve Bank of New York.

https://www.marketscreener.com/quote/stock/MORGAN-STANLEY-13654/news/Morgan-Stanley-s-Gorman-says-banking-industry-consolidation-is-inevitable-46787040/

California court to weigh fate of law treating app-based drivers as contractors

 California's top state court on Tuesday will consider a labor union's challenge to a ballot measure allowing app-based services such as Uber and Lyft to classify drivers in the state as independent contractors rather than as employees with more benefits.

The seven-member California Supreme Court will hear oral arguments in San Francisco in a lawsuit by the Service Employees International Union (SEIU) and four drivers who say the 2020 ballot measure known as Proposition 22 was unconstitutional.

Whether gig workers should be treated as employees or contractors is a crucial issue for the industry, as employees are entitled to the minimum wage, overtime pay, reimbursements for expenses and other protections that do not extend to independent contractors, who as a result can cost companies up to 30% less, according to several studies.

Uber, Lyft and other app-based services spent more than $200 million on a campaign to pass Prop 22 and have said that without it, the increased costs could force them to stop doing business in the largest U.S. state.

A study released on Monday by researchers at the University of California, Berkeley, found that most gig drivers in five major U.S. cities - including Los Angeles and San Francisco - earn significantly less than the minimum wage when full costs are taken into account, including downtime. Drivers in California were paid less than their counterparts in Boston, Chicago and Seattle, according to the report.

Joseph Bryant, SEIU executive vice president, said the Prop 22 case is a key piece in a campaign to secure basic legal protections for gig workers across the country and "reverse more than a decade of exploitation."

"No matter the outcome, we will not be intimidated by corporations' unconstitutional attempts to dictate law in California," Bryant said in a statement.

The California Attorney General's office, which is defending Prop. 22, declined to comment, deferring to its filings in the case.

Protect App-Based Drivers and Services, an industry-backed group that has intervened in the case on behalf of the state, provided a statement from Stephanie Whitfield, an Instacart driver who said the flexibility of her job has allowed her to focus on her medical health while earning a living.

“It’s not just about me - it’s ensuring the people and families I deliver to are able to continue to have access to the services they rely on," Whitfield said.

NATIONWIDE BATTLE

California is just one front in a nationwide legal battle over the proper classification of gig drivers and other contract workers. Lawmakers in Minnesota passed a measure over the weekend that would set a minimum wage of $1.28 per mile and 31 cents per minute for gig drivers, replacing a higher minimum adopted by Minneapolis that spurred Uber and Lyft to threaten to cease operating in the city.

Earlier this month, the top court in Massachusetts heard arguments over whether competing ballot proposals that would redefine the relationship between app-based companies and drivers in that state should be allowed to go before voters in November. One proposal supported by industry groups mirrors Prop 22, while another would allow drivers to unionize.

And last week a trial kicked off in a lawsuit by the Massachusetts attorney general accusing Uber and Lyft of unlawfully classifying their drivers as contractors to avoid treating them as employees entitled to a minimum wage, overtime and earned sick time.

The U.S. Department of Labor, meanwhile, is contending with several legal challenges to a rule that would make it more difficult for companies in many industries, including app-based services, to treat workers as independent contractors.

Prop 22 was approved in November 2020 by nearly 60% of voters in California. It exempts app-based drivers from a 2019 state law known as AB5 that narrowed the circumstances in which many workers can be treated as contractors.

Instead, Prop 22 allows app-based transportation services to classify drivers as independent contractors as long as they are paid at least 120% of the minimum wage while passengers are in the car and receive expense reimbursements and subsidies to pay for health insurance.

A state judge in 2021 found that Prop 22 violated the state constitution because it limited the legislature's power to include gig drivers within the scope of California workers' compensation law.

A mid-level appeals court last year disagreed and revived the measure. That court said the California Constitution permits the state's electorate, along with the legislature, to make changes to the workers' compensation system.

https://www.marketscreener.com/quote/stock/UBER-TECHNOLOGIES-INC-57860975/news/California-court-to-weigh-fate-of-law-treating-app-based-drivers-as-contractors-46782032/