Otsuka Holdings Co., Ltd. (OTSKY)
On October 12, 2017, CNN.com published an article, “The little red pill being pushed on the elderly,” which described the marketing efforts of Otsuka’s subsidiary, Avanir Pharmaceuticals (“Avanir”), with respect to Nuedexta, a treatment for pseudobulbar affect.
According to the article:
The maker of a little red pill intended to treat a rare condition is raking in hundreds of millions of dollars a year as it aggressively targets frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe, a CNN investigation has found.
And much of the money is coming straight from the federal government.
The pill, called Nuedexta, is approved to treat a disorder marked by sudden and uncontrollable laughing or crying — known as pseudobulbar affect, or PBA. This condition afflicts less than 1% of all Americans, based on a calculation using the drugmaker’s own figures, and it is most commonly associated with people who have multiple sclerosis (MS) or ALS, also known as Lou Gehrig’s disease.
Nuedexta’s financial success, however, is being propelled by a sales force focused on expanding the drug’s use among elderly patients suffering from dementia and Alzheimer’s disease, and high-volume prescribing and advocacy efforts by doctors receiving payments from the company, CNN found.
The CNN.com article further reported that “[s]oon after Nuedexta hit the market in 2011, doctors, nurses and family members began filing reports of potential harm – – ranging from rashes, dizziness and falls to comas and death.”
On October 19, 2017, CNN.com reported that Los Angeles City Attorney Mike Feuer had “launched an investigation” into Avanir, stating that “his office is seeking information and tips from the public to help determine whether state or federal laws have been broken in the sale, marketing or prescribing of Nuedexta.”
On December 4, 2017, CNN.com published an article, “Drugmaker paid doctors with problem records to promote its pill,” which reported that Avanir “paid nearly 500 doctors to speak or consult on its drug, Nuedexta, between 2013 and 2016, according to government data” and that “[t]hrough a review of the top prescribers and top paid physicians in this group, CNN identified a dozen who have been disciplined by state medical boards. These offenses included the harmful treatment of nursing home residents and ‘grossly negligent acts’ involving the inappropriate prescribing of dangerous and addictive drugs – – resulting in probation, suspension, fines and revoked licenses.”
On this news, Otsuka’s American Depositary Receipt (OTSKY) price declined sharply during intraday trading on December 5, 2017.
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