Shire's Russell on office space, off-label marketing, ADHD medicine
Shire CEO Angus Russell said his company is close to a decision on new plans for a Philadelphia-area campus.
Shire's Russell on office space, off-label marketing, ADHD medicine
Shire chief executive officer Angus Russell said his company is in the final stages of negotiating with developers, states and municipalities over where to move its North American headquarters, which is currently in Chesterbrook.
A link to Tuesday's Inquirer story is here.
The local real estate discussion was part of an recent interview with Russell in one of the four buildings that Shire has outgrown. Russell said he is looking for a campus setting with room to grow.
“I don’t want to move campuses every five to seven years,” Russell said. “But I also don’t want to have a bunch of empty buildings.”
Shire's filings with the Securities and Exchange Commission indicate several federal investigations.
In 2009, Shire got a subpoena for documents from the U.S. Attorney’s Office in Philadelphia and the Health and Human Services Office of Inspector General in an investigation of marketing practices of drugs, including Shire’s top sellers Vyvanse, Adderall XR, Daytrana. The first two are approved for ADHD.
Other federal prosecutors are looking at marketing practices for Dermagraft, a treatment for diabetic foot ulcers produced by Advanced BioHealing, which was acquired by Shire in 2011 and renamed Shire Regenerative Medicine in July.
Russell said he told employees to give investigators all they ask for and that Shire has “complied entirely” with those requests. “I don’t believe the government has any criticism of what we’ve shown them,” Russell said, without predicting an outcome.
But a general complaint about the drug industry is that sometimes billion-dollar fines for illegal marketing are considered a cost of doing business and conduct won’t change until top executives go to prison for harming patients or defrauding Medicare and Medicaid.
“I would agree absolutely,” Russell said. “I’ve been in this industry for 33 years and I don’t like what I’m seeing in this industry. It upsets me. I can’t sit here and say that and not be judged accordingly.”
In 2012, the Federal Trade Commission and senators, Iowa's Charles Grassley among them, sought information about the recent drug supply shortages, including with ADHD medicines.
Russell said that he and staff have met with government officials and senators to explain Shire's side of the ADHD shortage debate. He said he thinks officials are now more comfortable with what Shire did.
Drug production and distribution can be complicated enough, but the ADHD shortage situation was more complex because amphetamines are a controlled substance and the Drug Enforcement Administration has a say in the matter, trying to ensure that excess products are not floating through the market.
"A worthy kind of objective," Russell said.
This one got complicated because of the goals, responsibilities and restrictions of Shire and the two authorized generic companies, Teva Pharmaceuticals and Impax, along with the DEA, the Food and Drug Administration and Federal Trade Commission.
Shire makes the products for Teva and Impax. But Shire is the only one authorized to talk to the DEA about how much product should be made, so it collects the requests of the other two companies, adds its request and sends the overall request to the DEA. The agency then says how much can be made.
Russell said the allocation of manufacturing capacity is about evenly split, meaning one third for each. But the DEA decision has meant each company gets less than it hoped for.
But to avoid allegations of violating anti-trust rules and invoking the ire of the FTC, Russell says Shire doesn't know any more about how Teva and Impax operate, including price, beyond what any competitor learns from the marketplace.
Adding to the uncertainty is the names. Shire created the original Adderall and sold it to Teva, which manufactures just that version. But Shire still owns later incarnations of Adderall, such as Adderall XR. And Teva also had some manufacturing issues at its plant in Irvine, Calif.
Though Shire fought it, Actavis got approval in June to sell an independent generic form of Adderall XR. Aside from surprising stock market analysts and causing a stock price drop, that news will further complicate the quota system. Actavis will apply to the DEA for permission to produce its version, but Shire and the others won't automatically know.
Russell, who obviously has a competitive situation, hopes the DEA makes Actavis prove that it can sell the product responsibly before giving it all it asks for, especially if that means less for the others.
"They might come in asking for a huge piece of the market," Russell said, "but there is no credibility."
In June, FDA researchers published in Pediatrics the results of a study on prescription use in children 17 and under from 2002 through 2010. They found that 7 percent fewer prescriptions overall were written in 2010 than 2002, but there was a 46 percent jump in those written for attention deficit/hyperactivity disorder. The only bigger jump was in contraceptives (93%).
Having created the original Adderall, Shire gets some credit for producing a drug for an unmet need. But when asked if there really are that many who genuinely need it, Russell went further, saying the company is conducting trials in hopes of getting FDA approval for other mental health conditions.
"There is a tremendous lack of knowledge about these diseases from a societal attitude," Russell said. "We are really bothered by these diseases of a psychiatric nature. We really don't understand them and that is part of the problem. And even when we do, we get nervous about them. Mental health and psychiatric disorders are often very poorly diagnosed and there are huge prejudices against people who have those kinds of diseases."
But, compared to say an X-ray of a broken leg, there are fewer ways to measure and define mental illness, even among experts.
"The brain is the most complex organ the body, we don't know a lot about how the brain works and, like a lot of things in life, you become fearful of what that means," Russell said. "We back away from psychiatric diseases because they are not as easily understood. To me, that is not responsible. These people suffer real problems."
Russell said Shire has run trials in hopes of showing that its drugs are not just safe, but better than competitors.
"If we can't prove it, we can't prove it," Russell said. "But I would rather fail trying to prove it than have people walk around saying, 'You just kind of dreamed up this thing and you're treating people with it just to make money.' That's horrible and I don't want that."