By Diane Bartz

WASHINGTON |
Mon Feb 6, 2012 2:54pm EST

WASHINGTON (Reuters) – Objections to Express Scripts’ $29 billion plan to buy rival pharmacy benefits manager Medco Health Solutions are accumulating as U.S. antitrust regulators weigh whether they have enough evidence to stop the megamerger.

The Food Marketing Institute, which represents the biggest grocery chains, sent a letter to the Federal Trade Commission on February 2 saying the merged company would be able to cut payments to supermarket pharmacies that already operate at very tight margins.

“(We) ask the commission to bring an enforcement action to enjoin the merger,” the association said in its letter to FTC Chairman Jon Leibowitz, which was seen by Reuters on Monday.

The supermarket heavyweights join consumer groups and community pharmacies that have come out against the deal. A group of state attorneys general are reviewing the merger.

A source familiar with the deal said that key people at the FTC believe it should be stopped but want to ensure they have adequate evidence to win a court fight to stop it.

A decision on whether or not to sue is expected by the end of February or early in March, the source said.

Shares of Medco fell 9 percent to $57.88 on Monday after Reuters reported the grocery chain letter and the inclination of key FTC officials to block the deal. Express Script shares fell 4.6 percent to $49.70.

The FTC said it does not comment on pending investigations.

Express Scripts spokesman Brian Henry said: “We remain confident the merger will close in the first half of 2012.”

Pharmacy benefits managers (PBMs) like Medco and Express Scripts are hired by insurance companies to handle prescription drug plans. They sometimes provide drugs by mail order, through their own pharmacies and by contracting with chains and independent pharmacies.

The deal, announced in July, would combine two of the three largest PBMs that are big enough to manage prescription drug benefits for large, nationwide companies. The third is CVS Caremark.

A Medco-Express Scripts merger would create an industry leader with nearly one-third of the market.

The FTC has been working actively to prevent increases in health care costs. The FTC in late January sued to block Omnicare’s $441 million bid to buy rival PharMerica Corp.

Omnicare and PharMerica are the top two companies in the long-term pharmacy services sector, and the FTC said the combination would harm competition and allow Omnicare to raise the price of drugs for the frailest of the elderly.

More broadly, the U.S. government has taken an aggressive stance against mergers within the top tier of an industry.

The U.S. Justice Department sued last year to stop ATT’s $39 billion acquisition of discount rival T-Mobile USA. It also successfully blocked HR Block, the largest U.S. tax preparer, from acquiring TaxACT software maker 2SS Holdings Inc.

A CHORUS OF SKEPTICS

The letter from the Food Marketing Institute, which counts Safeway, Giant, Wal-Mart and Supervalu among its membership, adds another opposition voice.

In early January, a coalition of consumer groups, including U.S. PIRG and the Consumer Federation of America, also urged antitrust regulators to stop the deal.

Further, a group of about two dozen state attorneys general are looking at the merger, and could challenge it on their own.

Express Scripts has said that the deal is good for the American consumer because the larger company would have more clout to negotiate discounts with drugmakers.

In a show of confidence that the deal will go through, Express Scripts announced on Monday that it was offering a second round of notes aimed at financing the $29 billion transaction.

Medco shares, however, have consistently traded at a discount to Express Scripts’ $71.36 per share offer, reflecting investor caution over regulatory approval of the deal.

FEARING THE SQUEEZE

The Food Marketing Institute said in its letter that “seven of the largest supermarket chains” had met with FTC officials to ask that the deal be stopped but did not identify the chains.

If they are squeezed financially, grocery store pharmacies will be forced to cut back hours, end discounts for generics and stop giving free antibiotics and other promotions, said the letter, which was signed by FMI vice president Cathy Polley and regulatory counsel Erik Lieberman.

“The merger will allow the dominant PBM to control approximately 40 percent of the overall prescription drug volume in the United States,” said the FMI letter.

The FMI argued, in addition, that the PBMs would not likely pass along to consumers any cost savings they would achieve by squeezing supermarket pharmacies.

Small, independent pharmacies, under pressure from big chains, have also complained about the deal, saying that their reimbursement rates from the big PBMs were being reduced to the point that some felt they might not be able to stay in business.

(Reporting By Diane Bartz; Editing by Tim Dobbyn)

By Michael Shields

VIENNA |
Mon Feb 6, 2012 1:08pm EST

VIENNA (Reuters) – A Vienna hospital is searching for long-retired staff who might hold clues to a man’s claim that he was deliberately infected with malaria when he was a psychiatric patient nearly half a century ago.

The case shed fresh light on an almost forgotten footnote in Viennese medical history – the use of malaria-induced fevers to treat some kinds of dementia, an approach once seen so promising that it won an Austrian neurologist a Nobel Prize in the 1920s.

Broadcaster ORF said Monday that “Wilhelm J.,” aged 63, had come forward to complain that staff at the General Hospital in the city had injected him with malaria-infected blood in 1964, when he was 16 and had been diagnosed with “psychopathy.”

He said he suspected he was not being treated but rather being punished for repeatedly running away from foster homes.

“I had fever up to 42 degrees” and for decades afterwards suffered outbreaks of fever and sweats, he told the radio.

Johannes Wancata, who now heads the hospital’s psychiatric department, said records of the case had long been destroyed.

But he noted that inducing fever was once an accepted treatment for some forms of mental disorder before the advent of antibiotics, notably to cure syphilis, from the 1940s.

“We are trying to track down doctors and nurses who worked here in the 1960s – they all retired 10, 15 years ago or more – and ask them what they know about it,” Wancata added. He would not speculate on whether other patients might also be affected.

“International scientific opinion was that that was absolutely an interesting approach 100 years ago, and there was even a Nobel Prize for this. But in the 1960s that was certainly no longer up to date,” he said, expressing concern at the man’s allegation that doctors may have had motives other than healing.

Julius Wagner-Jauregg of Vienna University won the Nobel Prize for Medicine in 1927 for, in the words of the awards committee, “malaria inoculation, which proved to be very successful in the case of dementia paralytica.”

It was particularly used to treat the effects of advanced syphilis on the brain and the treatment lapsed as antibiotics were introduced to cure syphilis. However, other uses for malaria inoculation were also experimented with.

Brian Greenwood, a malaria expert at the London School of Hygiene and Tropical Medicine, said: “Malaria was also used more widely. Even fairly recently, in the last 20 years, it was used to treat certain autoimmune diseases in some countries.

“You’ve got a therapy that somebody has won the Nobel prize for, so you might well think it could work in something else.”

(Additional reporting by Ben Hirschler in London; Editing by Alastair Macdonald)

By Dorene Internicola

NEW YORK |
Mon Feb 6, 2012 11:46am EST

NEW YORK (Reuters) – For most people running one marathon is a daunting prospect but research scientist Leslie Miller belongs to group of runners who have completed 100 or more marathons, many of them just for the fun of it.

“It’s my hobby,” said Miller, from Seattle, Washington who has been running for about 10 years and averages one marathon a month. “I just get out and run almost every day.”

Although she is only 32 years old, Miller has completed 160 marathons so far. Her only goal now is to keep running.

“It would change my life if I had to stop,” she said.

Road runners and couch potatoes alike can draw inspiration from Miller and others like her who have completed the ancient 26.2-mile race 100 times or more.

“I was struck by just how happy everyone was,” said Malcolm Anderson, who interviewed over 120 such runners for “The Messengers,” his new book on the subject.

“This was what they were so passionate about doing,” said Anderson, a New Zealander living in Canada, adding that often they began with nothing but a desire to change their health.

“Many started out by not wanting to run or not liking to run,” Anderson said.

He found that runners who completed 100-plus races ranged in age from mid-20′s to 80′s, but as a group they tended to be goal-driven, patient, resilient, and social.

“They have a strong comfort level for taking on adversity,” he said. “But it’s primarily about doing something with other people, seeing new places and sharing.”

He said when the race is run they’ll sit down for coffee or beer and never mention their times.

Tom Holland, an exercise physiologist based in Darien, Connecticut, who has run over 70 marathons, said many 100-marathoners are late bloomers.

“You would also be surprised at how many started running much later in life,” said Holland, author of “The Marathon Method,” a 16-week training program for the race.

He said it’s not uncommon to encounter a 55-year-old veteran of 110 marathons who started to run at 50.

“You would be really surprised at how many of these people are actually overweight,” said Holland. “They don’t run fast, just far, and often.”

Holland, who strongly urges all runners to cross train, rest and recover, said for some, running is a necessity.

“It gives them a purpose, a goal, and a way to quiet their minds. They are much better people because of running.”

Young or old, fat or thin, these veterans of 100 marathons have delivered their message to Anderson.

“I keep getting told I should get 100,” said the 50-year-old. “I’ve run about 42, and I’ve got a few more in my sights.”

This year, Anderson said, he’ll run about 10 or 12.

“I’ll get there eventually,” he said. “I don’t want to get too grandiose.”

(Reporting by Dorene Internicola; editing by Patricia Reaney)

Mon Feb 6, 2012 10:28am EST

(Reuters) – Orexigen Therapeutics Inc said it reached an agreement with U.S. health regulators on the design of a heart-safety trial required for the approval of its experimental obesity drug.

The biopharmaceutical company plans to enroll about 10,000 patients in the placebo-controlled trial for demonstrating that the drug Contrave does not unacceptably increase the risk of major adverse cardiovascular events.

Orexigen will conduct the trial under a “special protocol assessment” from the U.S. Food and Drug Administration.

An SPA agreement indicates that the agency is on board with a trial design, making it more likely that the drug would be approved if the trial succeeds.

The FDA declined to approve Orexigen’s pill in January 2011, citing Contrave’s cardiovascular effects when used long-term in a population of overweight and obese subjects.

Contrave is one of three obesity drugs that the FDA has shot down over safety concerns, along with Arena Pharmaceuticals Inc’s lorcaserin and Vivus Inc’s Qnexa.

By Anna Yukhananov

WASHINGTON |
Mon Feb 6, 2012 10:18am EST

WASHINGTON (Reuters) – Reviewers from the U.S. Food and Drug Administration said on Monday that they were not sure whether Amgen Inc’s Xgeva bone drug should be approved for a wider use of delaying the spread of cancer to the bone.

The injectable drug is already approved to prevent fractures caused by cancer that has spread to the bone, and it is seen as one of the most important growth drivers for the world’s largest biotechnology company.

Xgeva delayed the spread of cancer to the bone by a little longer than four months in a clinical trial of 1,432 men with prostate cancer who had stopped responding to hormone therapy.

Amgen said the drug would be targeted at about 50,000 men in the United States at that stage of the disease.

The FDA staff said it was unclear whether that length of time without cancer spreading was “an adequate measure of clinical benefit,” especially as the drug did not help men live longer or delay the growth of prostate cancer.

Reviewers were also concerned that about one in 20 men treated with the drug developed osteonecrosis of the jaw, or death of jawbone tissue, and said it was uncertain whether the rate could be even higher if patients take the drug for a longer time.

An advisory committee will vote Wednesday on whether to recommend approval of the drug for the wider use. The FDA will make a final decision later.

Shares of the company were down 2.6 percent at $67.50 in morning Nasdaq trading.

ISI Group analyst Mark Schoenebaum said the critical review of Xgeva was expected, since the FDA had previously questioned whether a delay in cancer spreading to the bone was a meaningful benefit to patients.

“Even if the panel votes in favor of approval, commercial demand could be modest,” he added in a note, and said sales could reach about $300 million a year.

In the fourth quarter, sales of Xgeva rose to $134 million from $100 million in the prior quarter.

Amgen is hoping a broader use will significantly accelerate sales of the drug. Xgeva, along with related osteoporosis drug Prolia, are expected to offset declining sales of the anemia drugs that had been the company’s backbone.

The company said it would tell the advisory committee that Xgeva provided a meaningful benefit to prostate cancer patients by preventing the spread of their disease to the bones, which often happens.

“Bone metastases … are irreversible and progressive, and contribute major morbidity to these patients,” the company said in a statement. Amgen said that if Xgeva is approved, it would be the first drug to delay the spread of cancer to the bone for men with prostate cancer.

Amgen said it was also testing Xgeva in other cancers, including breast and lung cancer and multiple myeloma, or cancer of a type of white blood cell.

(Reporting by Anna Yukhananov; Editing by John Wallace and Lisa Von Ahn)