Good afternoon, readers.
I've been working on a story about Humira, the world's best-selling drug—and the aggressive tactics that manufacturer AbbVie, No. 381 on this year's Fortune Global 500, has taken to protect its cash cow.
The feature will appear in the August print issue of Fortune alongside plenty of other fascinating pieces about the companies on this year's Global 500 list. I encourage you to grab a copy off a newsstand (or, better yet, get yourself an honest-to-God Fortune subscription). But in the meantime, you can read the piece on good old Fortune.com, where it went live this morning.
Humira, a drug that's legitimately improved the lives of patients based on groundbreaking science that led to a Nobel Prize in Chemistry last year while ringing in nearly $20 billion in 2018 sales, should be an exemplar of profitable pharma innovation. And yet, conversations with analysts, biopharma executives, lawyers, and academics reveal the flip side of the fantasy—of a broken R&D and sales model that raises prices for patients and payers while stifling innovation. No small part of that is thanks to Humira manufacturer AbbVie's particularly aggressive approach to patents.
A sampling of what experts told us:
"I think of AbbVie as a pioneer—not just in medical treatments but also in legal protections," Robin Feldman, a professor at the UC Hastings College of the Law and author of Drugs, Money, and Secret Handshakes, told Fortune.
"Branded product sponsors like AbbVie have found many more opportunities to conclude that little wrinkles in the manufacturing process are innovative and can be protected by patents," said Robert Cerwinski, an attorney at Goodwin Procter.
Of AbbVie's recently proposed $63 billion mega-deal with Botox maker Allergan?
"This is an example of a pharma company doing a financial transaction—it has nothing to do with science; it has 100% to do with financial engineering," said Brad Loncar, a biotechnology investor focused on cancer immunotherapy. "People have been overpaying for Humira for a long time in the United States. And what has the company done with the proceeds of that? They’ve done a major financial deal for, of all things, Botox."
Check out the full piece here—and let me know if you have any thoughts on the state of innovation among big pharma companies.
Read on for the day's news.
Philips snatches up Boston startup Medumo. CNBC’s Chrissy Farr reports that Philips is continuing its foray into health tech, snatching up a small Boston-based firm called Medumo, which has simple text-and-email platform to deliver care instructions to patients on behalf of hospitals. If you’ve ever dealt with the dreaded health care industry reliance on fax machines, you know why that might be a desirable business. Earlier this year, Philips purchased health IT businesses centered on everything from medical imaging to informatics. (CNBC)
Gilead science chief departs following Galapagos deal. Earlier this week, biotech giant Gilead announced a $5.1 billion partnership with Galapagos that will give the company access to a number of rare disease and specialty treatments, including experimental therapies for the lung disorder idiopathic pulmonary fibrosis. And CEO Daniel O’Day is continuing to shake things up in his (so far) brief tenure; chief scientific officer and R&D head John McHutchison will be leaving the company after a nearly nine year stint at Gilead. It’s unclear why he’s heading for the exit. (BioSpace)
THE BIG PICTURE
JUUL to take the hot seat in front of House committee. E-cigarette maker JUUL is continuing to face Congressional scrutiny in light of a massive spike in teen vaping. On Thursday, a subcommittee of the House Oversight and Government Reform committee announced it will hold a hearing next week entitled, “Examining JUUL’s Role in the Youth Nicotine Epidemic.” Things don’t get a lot more clear than that.
Millennial Workers Are Thriving in Age-Old Workplaces, by Lydia Belanger
Gender Equality Backslides in China: The Broadsheet, by Kristen Bellstrom
How Facebook’s Libra Currency Could Threaten the Global Financial System, by David Z. Morris
Why Companies Should Not Attack Back at Hackers, by Adam Lashinsky
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