Cigna Corp. confirmed Thursday that it will keep its pharmacy-benefits management business, after considering a possible sale earlier this year.

Responding to a question from Goldman Sachs Group Inc. analyst Matthew Borsh, Cigna president David M. Cordani said the firm decided its PBM was “important strategically to us as we go forward.”

PBMs administer prescription-drug benefits for health-plan operators and often run mail-order pharmacies.

Many big health insurers began looking at selling their PBM units after WellPoint Inc. struck a deal with Express Scripts Inc. to unload its PBM for $4.68 billion.

Solution Saturday

April 15 is months away, but that’s not keeping the IRS from holding “Solution Saturday” tomorrow to help individuals and small-business owners with tax problems.

People can go to the IRS office at Sixth and Arch Streets, Philadelphia, between 9 a.m. and 2 p.m., and meet face-to-face with tax experts to address their specific issues, said spokesman David D. Stewart.

I can’t imagine someone who hasn’t paid his or her taxes in a few years strolling into the IRS to try to make it right, but that’s what the IRS is hoping will happen.

The goal is to get those who’ve dropped out of the system back in and help those in danger of falling behind because of financial challenges, he said.

Testing, testing

Rosetta Genomics Ltd. , based in Israel with a big lab in West Philadelphia, named a former Johnson & Johnson executive as its new president and chief executive officer this week.

Kenneth A. Berlin, 45, succeeds Amir Avniel, who’d announced in September that he would step down.

Berlin had been general manager of Veridex L.L.C., a J&J unit in Raritan, N.J., that employs about 100 people. Veridex bought the assets of Immunicon Corp., a cancer-diagnostics firm in Huntingdon Valley that went bankrupt in summer 2008.

The Nasdaq-listed Rosetta Genomics is developing medical diagnostic tools based on microRNA technology. Its Philadelphia lab is in the University City Science Center.

This year, the rankings of the world’s largest pharmaceutical companies have seemed to change as often as the AP college football poll.

Yesterday’s closing of the $41 billion deal between Merck & Co. Inc. and Schering-Plough Corp. made Merck the world’s second-largest drug company, behind Pfizer Inc.

IMS Health, which ranks the industry by pharmaceutical sales, lists New York-based Pfizer with 2008 sales of $43.4 billion. Pfizer only got bigger this year, having recently acquired Wyeth, which had 2008 sales of $15.7 billion. Wyeth employs about 4,500 people in the Philadelphia suburbs.

The previous No. 2 drug company had been London-based GlaxoSmithKline P.L.C., which employs more than 5,000 in the Philadelphia area. IMS Health lists GlaxoSmithKline’s 2008 sales as $36.5 billion, putting it just ahead of Novartis and its $36.2 billion in sales.

Add Merck’s $26.2 billion in sales to Schering’s $18.5 billion in sales and you get the new No. 2 company with a total of $44.7 billion.

But Merck, which employs 12,000 in Montgomery County, may not hold onto the No. 2 spot for long. Earlier this year, Roche Holding bought biotech juggernaut Genentech, creating a company with combined 2008 sales of $43.8 billion. Genentech has several blockbuster drugs, including Avastin. If sales trends hold, Roche could leap over Merck as soon as 2010.

Feeling Better

Tenet Healthcare Corp. may only have two hospitals left of the original eight it acquired in Philadelphia in 1998, but those two were bright spots in the company’s latest quarterly results.

The Dallas for-profit hospital operator noted that Philadelphia was one of only two regions in which it reported positive total admissions growth in the third quarter ended Sept. 30. The other was Tenet’s California region, which includes hospitals in Nebraska.

Total admissions at its 51 hospitals were flat at 128,652.

Tenet also noted outpatient visits grew more than 8 percent at Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia as well as at hospitals in its Central and Florida regions.

Shares of Tenet closed at $5.40, up 10 cents.

The playbook for the pharmaceutical industry has always seemed to be: Think globally, but the U.S. is what really matters.

GlaxoSmithKline CEO Andrew Witty has been redirecting his company to think globally and make money globally.

“Less than 30 percent of this quarter’s sales were generated from what I call ‘white pill western markets’ compared to 38 percent in the quarter before I took over as CEO,” Witty told analysts on a conference call.

That doesn’t mean GlaxoSmithKline’s ignoring the U.S. In fact, Witty got the chance to brag a little: “I think it’s probably a rare occasion as CEO of a drug company, you can go on to a quarterly call and say that they’ve received three new molecular entity approvals in the last seven days.”

I count it as 10 days, but that’s a great run. The Food and Drug Administration approved its Cervarix cervical cancer vaccine on Oct. 16, its Votrient kidney cancer treatment on Oct. 19, and Arzerra for leukemia on Oct. 26.

What curse?

Liberty Property Trust vice president of investor relations Jeanne Leonard had her fastball working yesterday.

She brushed me back for implying in Wednesday’s column that the office and industrial property developer is “less Phillies-crazy that our fellow Philadelphia corporations.”

Far from it. If any company has taken more flak for Philadelphia’s professional sports championship drought from 1983 to 2008 than Liberty, I don’t know who it is.

It was Liberty’s founder, the late Willard G. Rouse III, who built One Liberty Place in 1980s, the first tower to soar over the William Penn statue atop City Hall. Superstition led some fans to link the city’s lack of Super Bowl wins or Stanley Cups over a 25-year stretch to a “Billy Penn curse.”

More recently, when Liberty developed Comcast Center, the company made sure a small replica of the city’s founder was glued to the roof. Just in case. And of course, the Phillies then won the World Series last year.

So that’s why Leonard picks the Phils to win in five games over the Yankees.

“Keep in mind that we’ve still got Billy Penn happily rooting for the Phillies from the top of Comcast Center,” Leonard wrote in an e-mail.

As Pfizer Inc. begins digesting Wyeth, be on the lookout for more announcements like the one made by Cephalon Inc. Tuesday.

The Frazer biopharmaceutical company said it hired Bob Repella as senior vice president for its U.S. pharmaceutical operations. He’d been executive vice president and general manager of the Biopharma Business Unit for Wyeth Pharmaceuticals.

Repella is actually taking on the responsibilities of two former Cephalon executives. Michael Mulholland, who Cephalon spokeswoman Sheryl Williams said left several months ago, had been in charge of U.S. pharmaceutical operations, except for oncology.

Elizabeth Barrett, who had been vice president and general manager for Cephalon’s oncology business unit, left in March to join Pfizer, where she is regional U.S. president for its oncology business unit.

Repella had been at Wyeth for 16 years, and one of the products he was responsible for was Enbrel, a treatment for arthritis and other immune system diseases. Cephalon, which sells the chemotherapy drug Treanda, has been building its oncology product pipeline.

Pfizer has said it expects to cut its workforce by 15 percent, or 20,000 jobs; how that will affect the 4,500 people who worked for Wyeth in the Philadelphia suburbs is still unclear.

But big mergers also prompt employees, including executives, to test the free-agent market. Consider this one of the first signings.

CEOs as fans

There’s nothing like the World Series to bring out the fan in everyone, including CEOs.

Richard C. Ill, the head of Wayne-based Triumph Group Inc., started his remarks to analysts on a conference call Tuesday, saying:

Good morning and good morning from Philadelphia, home of the steroid-free world champions who are poised and ready to repeat.

Guess Ill’s not too worried about upsetting Triumph’s biggest customer, Chicago-based Boeing Co., but his aerospace company also does a lot of work with Sikorsky Aircraft, which calls home the part of Connecticut that is definitely Yankees territory.

A bit more reserved, William P. Hankowsky, chairman and CEO of Malvern-based Liberty Property Trust, closed his conference call with:

I hope everybody enjoys the World Series. We will be watching closely.

GlaxoSmithKline P.L.C. this morning said the U.S. Food and Drug Administration approved its Cervarix cervical cancer vaccine.

The pharmaceutical company, which has major operations in the Philadelphia area, said it will begin marketing and selling the vaccine in late 2009.

The decision was expected after an FDA advisory panel recommended approval in September. And it means that Merck & Co. Inc. now has some competition for its Gardasil vaccine, which also protects against two types of human papillomavirus. Merck's Gardasil had 2008 sales of $1.4 billion.

To read more about Cervarix, here's a link to a September story by the Inquirer's Marie McCullough.

With the Senate Finance Committee approving a health-care reform bill, all the notions and what-ifs will start to crystallize into actual do’s and don’t’s.

We all have a keen interest in having the best health care we can afford. It’s appalling that the United States can spend more than $2.2 trillion a year on health care but not have the world’s best system.

But as difficult as it has been for the House and Senate to get to this point, now the truly difficult negotiating begins.

The arm-twisting may be going on in Washington, D.C., but you better believe that the pain that must come with any changes will be keenly felt in our region.

After all, our economic development gurus proudly tout Philadelphia’s life-science cluster that has grown phenomenally and provided lots of high-paying jobs.

A report issued by the Milken Institute in May said that one in six jobs and 15 percent of all economic activity in the Greater Philadelphia area could be attributed to life sciences. The Milken economists calculated that health care is responsible for 380,000 jobs here.

When something has grown so steadily for so long into something so huge, it’s time to worry about when the music is going to stop, even if the band in Washington is still trying to decide which tune to play.

All the players that could be affected by health reform have put on their brave faces and offered encouragement and campaign contributions. They have to.

What I can’t figure out yet is which part of the sector will lose more in the name of reform.

Will it be the health insurance industry? The Big Three locally - Independence Blue Cross, Aetna and Cigna - have a total of more than 12,000 employees here.

Or Big Pharma? Collectively, Merck & Co., Johnson & Johnson, Wyeth, GlaxoSmithKline and AstraZeneca had more than 31,000 employees locally as of last summer.

Maybe it will be the gravity-defying, ever-expanding hospital sector. Five of the region’s ten biggest employers are hospital systems.

But I am sure of this: For a region so dependent on health care, nothing matters more this fall than how much status quo Washington decides must go.
 

Can NutriSystem Inc. bulk up at Wal-Mart?

The diet-plan purveyor yesterday said it had snagged a deal to sell a two-week, $148 "starter" version of its weight-loss program at 3,200 Wal-Mart stores.

Shares in the Horsham company jumped as much as 22 percent at one point, and volume surged by a factor of 20 over average.

NutriSystem, whose second-quarter profit fell 60 percent on a revenue decline of 32 percent from last year, said it was hitting Wal-Mart shelves "at the brink of the holiday rush and leading into the height of the 2010 New Year's resolution season."

The company has had a deal since January to sell NutriSystem in Costco stores. "We're still there," NutriSystem spokeswoman Susan McGowan said of Costco yesterday tues, but she would not say how Costco sales were going.

Analysts Mitchell B. Pinheiro and Brian Holland, at Janney Montgomery Scott in Philadelphia, put out a note to investors that the Wal-Mart deal was "on a much greater scale" than Costco.

But the duo concluded, "We are not looking for any meaningful lift from Wal-Mart" in the fourth quarter.

Online layaway

Many stores ditched layaway programs in the years of easy credit, but not Kmart. Now, having detected new interest in the old-fashioned payment method, the retailer is taking layaway to the Internet.

Kmart's owner, Sears Holdings Corp.announced yesterday that Kmart and Sears customers could go online to put 10 percent down on a purchase and make biweekly payments on an eight-week layaway plan.

Customers may use a debit card, or store gift card to make the payments. They can also use a credit card, though it's not clearit was unclear whom that might benefit.

Procrastination

People who filed for six-month extensions on their 2008 federal income tax returns need to take note.

Your new filing deadline of Oct. 15 is fast approaching. The IRS says 264,000 Pennsylvanians and 295,000 New Jersey residents filed for extensions.

Lots of analysts have been warning that the U.S. is just getting warmed up when it comes to bank failures.

Sure, the biggest basket cases were probably addressed, rescued or bailed out (take your pick of characterizations) last fall with the $700 billion Troubled Asset Relief Program.

But the Federal Deposit Insurance Corp.’s running total of failed banks for 2009 is up to 98. The FDIC also says 416 institutions were on its “problem list” as of June 30. (No, the FDIC doesn’t name names.)

Few expect the level of failures to reach what was experienced during the savings and loan crisis of the ’80s and ’90s. That doesn’t mean everything’s fine either.

Credit-rating agency A.M. Best Co. ran its own proprietary model on the 7,476 commercial banks regulated by the FDIC and found that 505 of them could be considered “troubled.” That’s 6.8 percent of all U.S. banks.

What makes for a troubled bank in A.M. Best’s view? Besides having weak capital ratios, it tends to be more exposed to commercial real estate loans compared with industry norms.

Of those 505 troubled banks, 272 are at high risk of failure, according to A.M. Best analysts Tam V. Nguyen and Kevin McFadden.

Oldwick, N.J.-based A.M. Best will not say who’s at risk, but it does say where: Georgia, California, Florida, Illinois and Arizona.

Georgia could have 73 troubled banks on its mind. A.M. Best says 20 are at high risk of failing.

Here, Watchdog

In a speech largely about encouraging innovation to spur cancer-care breakthroughs, AstraZeneca P.L.C. CEO David Brennan renewed a call for more funding for the Food and Drug Administration.

“An understaffed and underfunded FDA is an agency in crisis,” Brennan said Monday at the Medical Innovation Summit in Cleveland.

It may seem odd for the regulated to call for “a watchdog with a full set of teeth,” as Brennan said. But the reputations of the drug industry and FDA have been shredded in recent years.

Sure, everyone want to help patients. But the drug industry, which has done well by doing good (and not so good), wants to be seen as open to change even as it braces for reform.

Wednesday will be a big day for GlaxoSmithKline P.L.C. and Merck & Co. Inc.

Both companies will go before an advisory panel of the Food and Drug Administration over two human papillomavirus vaccines to prevent cervical cancer. Certain types of HPV can cause cervical cancer; others can cause genital warts.

Big money is at stake. Merck has been selling its Gardasil for three years. In 2008, Gardasil generated worldwide sales of $1.4 billion.

GlaxoSmithKline would like to narrow Merck’s lead. Its Cervarix vaccine is now licensed in 95 countries, but earned only $231 million in sales in 2008. The U.S. regulatory process bogged down near the end of 2007, when the FDA said it would not approve the vaccine without data from a large study. That problem was resolved earlier this year.

As for Merck, it is seeking the panel’s approval to extend the use of Gardasil to boys and men to prevent genital warts and certain rare cancers.

The nine-member FDA Vaccine and Related Biological Products Advisory Committee will vote late in the day. If it recommends approval, the FDA usually follows that advice, but it is not bound to do so.

More on rebates

The federal “Cash for Clunkers” program spent $3 billion in about a month.

This fall’s planned rebate program for energy-efficient appliances is less than $300 million, and that had some readers worried they might miss out on getting a rebate for buying a new water heater, refrigerator, or other appliance.

The federal Energy Department has divvied up the funding based on state population. Pennsylvania will get $11.94 million in rebates, while New Jersey will get $8.33 million, and Delaware $838,000.

But each state gets to choose which appliances to include and the size of the rebate. The only thing that is standard is that the appliances must carry the Energy Star label.

We won’t know the full details until Oct. 15. But you can learn which appliances carry the Energy Star label at this government-operated Web site.

Just like the “Clunkers” program, you probably shouldn’t dawdle once Oct. 15 arrives. The Energy Department says the vast majority of the funding will be awarded by Nov. 30.