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From Nightmare Drug to Celgene Blockbuster, Thalidomide Is Back

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The modern drug-regulation system traces back to a once-popular morning-sickness pill whose linkage to babies born with flipper-like limbs in the 1960s led the U.S. to tighten oversight for approving medications.

That makes it all the more amazing that Celgene Corp. has built itself into a biotech powerhouse, rebranding the drug thalidomide using a slightly different name: Thalomid. Recently unsealed documents in a lawsuit by a company saleswoman-turned-whistleblower allege that its success is due to an aggressive campaign to encourage doctors to prescribe it and successor drugs to treat maladies beyond those the FDA authorized.

After some studies suggested thalidomide could treat blood cancer but long before it was authorized for it, Celgene created a thriving market by hiring doctors to tout uses beyond what the product was approved for and ghostwriters to promote the drug in medical journals, according to the suit. Though doctors have broad latitude in prescribing drugs, even for uses that arent approved, drugmakers cant push off-label uses. Manufacturers including Pfizer Inc. and Johnson & Johnson have paid billions of dollars to settle such claims.

Even after the Food and Drug Administration approved Thalomid for multiple myeloma, a blood cancer, in the mid-2000s, Celgene continued to promote it for other forms of cancer, including cervix, thyroid and brain, whistleblower Beverly Brown alleges in the suit, filed in 2010. 

Celgene vigorously disputes the allegations.

Although the U.S. Justice Department declined to join Browns suit, which claims Celgene defrauded government insurance programs by marketing its drugs for off-label uses, a California judge cleared her case for trial.

These allegations, which date as far back as 15 years, are baseless, Celgene spokesman Brian Gill said in a statement. Celgene is committed to patient safety, and its products have improved and extended the lives of many thousands of cancer patients.

First sold as a sedative in West Germany in the 1950s, thalidomide became an over-the-counter sensation in Europe. The FDA rejected the treatment as a morning-sickness pill in 1960, over concerns about separate side effects. In the wake of the controversy over birth defects, U.S. rules on reviewing drugs were tightened.


In the 1990s, Celgene was a small biotech firm that had never brought a drug to market. A study showed thalidomide, then being used to treat leprosy overseas, might help against HIV-related weight loss. Researchers found the compound tied to birth defects might also fight blood cancers such as multiple myeloma. Federal regulators knew many oncologists regarded Thalomid and Revlimid, its chief successor, as revolutionary, Celgene said, according to the court documents.

It wasnt until 1998 that the FDA approved Thalomid for a form of leprosy. The regulator, however, insisted on measures to ensure pregnant women wouldnt take it. In 2005, Revlimid was approved for one type of blood cancer and the next year, both drugs were approved for multiple myeloma.

There arent a lot of lepers in the United States, but there are a lot of people who wanted to use it for other uses, said Robert DAmato, a surgery director at Boston Childrens Hospital, whose research in the 1990s pointed to thalidomides potential.

Last year, Thalomid and its successors, Revlimid and Pomalyst, accounted for $6.97 billion, or more than 75 percent, of Celgenes revenue. The company has pledged to double total sales to more than $21 billion by 2020. The stock has soared 310 percent, more than fourfold, in the past five years, outperforming the Nasdaq Biotechnology Index.

Brown, 59, joined Celgene in 2001 as the company was rolling out a campaign to promote Thalomid to treat other diseases, her suit says. Around that time, she said Celgene hired almost 100 salespeople and trained them to peddle the drug to cancer doctors, an allegation the company called baseless. Brown left after a decade. She declined to comment beyond the suit.

Off-Label Prescriptions

Some studies found no overall survival benefits for cancer patients on thalidomide. But in a study published this year looking at multiple trials, Revlimid helped patients with multiple myeloma live about 2.5 years longer after a stem cell transplant than those on placebo.

From the beginning, off-label prescriptions drove Thalomids sales. In the first 12 months after its U.S. debut for leprosy, about 70 percent of the prescriptions were for oncology patients, Celgene said in an annual filing. In 2000, six years before Thalomid was approved as a cancer treatment, oncological cases accounted for 92 percent of prescriptions, according to the filing. In 2004, then-CFO Robert Hugin told investors the drug was the companys financial engine.

Executives were aware then of concerns the drug might increase the risk of blood clots in cancer patients, Brown alleges in court filings. Drugmakers are required to alert regulators of possible side effects. The former sales rep says that Celgene failed to do so, and points to an October 2000 e-mail from Todd Clark, a drug-safety official at the company. He told an employee who had sent messages about cases that linked Thalomid to clots and hadnt been reported to the FDA that putting such statements in writing in an internal Celgene document is potentially a glaring red flag to the FDA, according to the filings.

Non-Erasable Message

Clark in turn got his own warning in a February 2001 e-mail from Celgenes chief medical officer, Jerry Zeldis, saying, this is a non-erasable message that can be audited by the FDA. A few months later, Zeldis said in another e-mail filed in court that Celgene had heard of seven deaths due to clots by cancer patients taking Thalomid off label. In a deposition, he said the reports were turned over to the FDA. The regulator declined to comment on Celgenes reporting.

Zeldis declined to comment on the e-mails, and Clark couldnt be reached. Celgene disputed Browns interpretation, saying in court documents that the messages reminded employees to keep the FDA informed of possible risks. Brown also said in a deposition that Celgene had instructed salespeople to report any issues.

Celgene took other steps to rehabilitate thalidomide in the medical community, paying doctors who prescribed the drugs off label to tout them to colleagues through a speakers program, Brown said in court filings. Celgene paid 159 physicians $2.1 million in 2015 for services such as speaking about Revlimid, Thalomid and Pomalyst, according to government records.

Promotional Speaker

Among the recipients was William Bensinger, a Seattle oncologist, who received $260,000 over seven years from Celgene as a promotional speaker, according to court documents. While he was getting as much as $4,000 per talk, Bensinger also served as head of a national oncologist committee that reviews the effectiveness of cancer drugs for physicians and federal insurance programs, court records show. He declined to comment on whether that constituted a conflict of interest.

Its left to the audience to decide whether or not to use the drug, Bensinger said in a deposition, denying he pressured others to prescribe Celgene products.

Working with drugmakers can be tricky, according to David Steensma, an oncologist at the Dana-Farber Cancer Institute in Boston. Celgene paid him $26,262 to help track patients with certain blood cancers, according to government records. Steensma said he wasnt part of the speakers program.

It is a relationship you need to be very careful with, because their motivations and their goals are not the same as yours, Steensma said. I have to sleep well at night.

Watch Next: Why Do Drug Prices Keep Going Up?

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Read more: http://www.bloomberg.com//news/articles/2016-08-22/from-nightmare-drug-to-celgene-blockbuster-thalidomide-is-back

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Apple Updates Key iPhone Line to Try to Reignite Sales Growth

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Apple Inc. rolled out updated products and new features Wednesday that mostly relied on an old strategy. The most-valuable technology company is targeting pent-up appetite for new iPhones to reignite sales growth amid mounting investor concern that its pace of innovation is slowing.

The iPhone 7 line includes camera upgrades, a faster processor, longer battery life and a new water and dust-resistant design, the company said during an event at San Franciscos Bill Graham Civic Auditorium. Apple also ditched headphone jacks to make room for other features and the company showed off new $159 headphones called AirPods that connect wirelessly to the new iPhones.

This is the best iPhone weve ever created, Chief Executive Officer Tim Cook told an audience of reporters and Apple employees.

First Look at the New iPhone 7 and iPhone 7 Plus

Others werent so enthused and Apple shares ended up less than 1 percent in Wednesday trading, leaving the stock up 3 percent so far this year. The Nasdaq Composite index has gained 5.5 percent in the same period.

In the past theyve had a brand new user experience, and we havent seen that today, said Gartner Inc. analyst Brian Blau. I dont think its going to change peoples opinions of smartphones. Its not going to jack up interest but its not going to reduce it either.

Apple, based in Cupertino, California, also announced a new water-resistant Watch with GPS tracking, a faster processor and brighter screen, along with an iPhone payments service for Japan, updated work software and the addition of a Nintendo Co. Super Mario mobile game to its App Store.

The new Apple Watch 2.
Photographer: David Paul Morris/Bloomberg

Apples previous CEO Steve Jobs introduced the iPod, iPad and original iPhone at similar events in the past, helping revenue and profit surge. Yet sales this fiscal year are forecast to decline for the first time since 2001, prompting questions among some investors and analysts about Cooks ability to deliver such innovations. Hes trying to increase sales of software and services, while greater investment in research and development has yet to yield new product lines such as an Apple car or virtual reality offering.

Muted Expectations

Expectations for the iPhone 7 had been muted, with anticipation instead mounting for the model to be introduced in 2017, when Apple celebrates the devices 10th anniversary. Apples smartphone market share is likely to slip to 13.9 percent this year, compared with 15.8 percent in 2015 and an estimated 14.2 percent in 2020, research firm IDC estimated before Wednesdays event. It also forecast slower growth in overall smartphone sales as consumers upgrade less frequently.

The latest iPhone is similar in design and size to its predecessor, the iPhone 6S. The larger 7 Plus handset has a back-facing dual camera which allows for crisper images, particularly in low light. It also comes with a new pressure-sensitive Home button that provides a vibrating sensation in response to button presses instead of an actual physical click.

QuickTake Apple

The smaller of two models, the iPhone 7, will cost $649 and the larger 7 Plus will cost $769. Both are available for pre-order on Sept. 9, and come in silver, gold, rose gold colors and two new black finishes.

Theres a big enough pool of iPhone 6 users waiting for an upgrade and there was enough new technology in there to make us comfortable about growth heading into next year, said Gene Munster, a Piper Jaffray analyst who has an overweight rating on Apple stock.

The dual cameras on the Apple iPhone 7 Plus.
Photographer: David Paul Morris/Bloomberg

Apples failure to completely overhaul the design, as it has previously done every two years, shouldnt hurt sales, said Lauren Guenveur, an analyst at Kantar Worldpanel.

Most people upgrade because theyre looking for better battery life, better storage capacity, and a faster processor and thats everything that they highlighted today, she said.

China Upgrade

China has been a drag on Apples performance this year as local rivals introduce cheaper handsets with similar functionality. 

Apple said Wednesday that its iPhone Upgrade subscription program — where users pay a monthly fee to get a new phone each year — will be extended to Asias largest economy. That could help it boost future revenue in China, where the third-quarter sales decline was bigger than the revenue drop in the Americas and Europe combined.

To make inroads with the next 500 million Chinese consumers, they need to find a way of making their devices affordable without compromising on their premium brand — this might help them do that, Julie Ask, a Forrester Research analyst said. The program, introduced in the U.S. last year, will also be extended to the U.K.

Tough Cell

The new Apple Watch may disappoint customers who had been hoping for a cellular chip that would have given it mobile network connectivity and un-tethered it from the iPhone. Apple had been in talks with mobile phone carriers earlier this year to introduce such a version, but the plans hit hurdles on concern about reduced battery life, people familiar with the discussions said last month. Samsung Electronics Co. unveiled its own smartwatch with cellular connectivity last week.

The model unveiled on Wednesday — dubbed the Apple Watch Series 2 — targets fitness fanatics. Waterproofing down to 50 meters has allowed Apple to build swim tracking into the device, while GPS means joggers can plot their runs without carrying an iPhone. Apple also teamed up with Nike Inc. to release a version the two companies call the Apple Watch Nike+. The partnership will let Apple sell products with the worlds largest sport brands well-oiled marketing machine and sales network.

First Look at the Series 2 Apple Watch

When the Apple Watch first reached stores in April 2015, some hoped it would become a new revenue source to match the iPhone and early iPad sales. Apple still doesnt break out sales of the smartwatch, lumping it with “Other Products” in financial reports. That segment generated $2.2 billion of revenue in the three months through June — less than half the sales from iPads and an even smaller fraction of the $24 billion in iPhone sales that quarter. IDC estimated Apple shipped 1.6 million Watches in that period, down 55 percent from the same period a year earlier.

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Read more: http://www.bloomberg.com//news/articles/2016-09-07/apple-updates-key-iphone-line-to-try-to-reignite-sales-growth

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Heres Who Profits From the Wells Fargo Scandal

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If there are any winners in the Wells Fargo & Co. scandal, it may be the mega-banks’ not-for-profit country cousin, the credit union.

When “establishment” banks are seen as ripping off the little guy, credit unions benefit. Their most recent growth spurt began in 2011, when Bank of America’s (eventually abandoned) move to charge debit-card users a $5 fee on purchases, together with the Occupy Wall Street movement, spurred more people to flee the big banks. The Wells Fargo scam could help make 2016 a banner year for the nonprofit financial institutions.

The chief executive of The National Association of Federal Credit Unions (NAFCU), Dan Berger, issued a blistering statement on Sept. 9. Here’s a sample:

“Wells Fargo’s illegal sales practices are an egregious violation of consumer trust. To open more than 1.5 million likely unauthorized deposit accounts and more than 500,000 credit card accounts is despicable, and it’s flat-out fraud. Someone needs to go to prison…Did the banks not learn anything from the financial crisis they caused?” 

“The frustration the American consumer has is: Here we are, we’re just out of the financial crisis, and here we go again,” Berger said in an interview. He said the fact that Wells let go 5,300 employees in connection with the scandal shows that it’s a problem with the bank’s corporate culture. Wells Fargo Chief Executive Officer John Stumpf has defended the company’s culture as putting customers first and has said some employees simply didn’t hew to it.

Protesters wear pig masks as people participate in an Occupy protest in Vancouver, on Oct. 15, 2011.
Photographer: Jeff Vinnick/Getty Images

Whatever the case, credit unions have a compelling story to tell.

Customers are members in a sort of collective in which there’s no pressure from Wall Street for unrelenting growth. Earnings get returned to members via a combination of lower and/or fewer fees, lower interest rates on loans, and higher rates on savings accounts, so consumers can often get a good dealOn the other hand, credit unions don’t have ATMs on every corner and hours on Saturdays. Members do have online banking and access to tens of thousands of fee-free ATMs through various agreements, and some credit unions waive part of the fee charged by other ATMs.

You can find a credit union, and compare rates against banks’, at the NAFCU website.

Millennials have been flocking to credit unions. A quarter of their members in the first quarter were millennials, according to TransUnion data, up from 20 percent in 2013. That’s making the institutions work harder on an area in which they tend to lag behind the big bankstechnology and the ease of use with banking apps on smartphones and tablets, for one thing. While financial technology companies are also in hot pursuit of millennials, Berger’s opinion is that they don’t have the same level of trust that credit unions enjoy.

Credit unions appeal to millennials “because they like a cause and being part of something bigger than themselves,” said Berger. “They like the individuality, like the credit union movement.”

Apparently, some of them also see banks vs. credit unions in political terms, as the Twitterverse made clear on Tuesday, with sentiments such as this:

And this:

The credit unions themselves took to Twitter: 

Yes, that’s Multiplicity

Well, they’re not Apple. They’re credit unions.

Read more: http://www.bloomberg.com/news/articles/2016-09-14/with-wells-fargo-scandal-there-s-blood-in-the-water-here-s-who-profits