BBI

Controversy has continued in Europe over certification organizations like TUV Rheinland Product Safety (Berlin-Brandenburg, Germany) which have been promoting private marks claiming to guarantee testing to standards above those required for CE marking.

The CE mark will now be given legal status in Germany next year as the single valid test mark. Up to now, there has been confusion and uncertainty over the appearance of rival mark services which at present are not illegal and which claim to provide a higher-quality guarantee.

In a recent letter to the European Sterilization Packaging Association (ESPA; Brussels, Belgium), the European Commission has provided an indecisive response on the subject. The commission's letter said, "As to whether or not the additional marks create confusion with the CE mark, this needs to be considered from the point of view of all relevant parties likely to come into contact with it."

This statement shows that the commission continues to sit on the fence, according to Michael Baker, director general of EUCOMED (also Brussels), the European medical device industry association. "It effectively says, industry, you must make up your own mind. It's down to you again," he said. His message to the medical device industry was clear: "Do not use marks that will conflict with the CE marking. It is not necessary. Don't do it, because you are not helping yourselves in the long run. This has been our advice and always will be."

Separately the European Commission Industry Directorate (DGIII) has sent a questionnaire on CE marking to all 15 member states. Its stated aim is to develop an inventory of all marks which may impinge on the scope of the CE mark. The survey covers active implantable medical devices and medical devices in the first two medical device directives. More details are available on www.eotc.be

The German initiative will be effective when the second amendment to the medical products law (MPG) is passed. This is unlikely to be before mid-2001 because of a large number of changes proposed by the individual German federal states. Under the new regulations, in Germany private marks which overlap the legal requirements of the Medical Devices Directive (CE marking) will be prohibited.

It remains to be seen whether Germany's unilateral action will spark similar moves elsewhere in Europe or by the commission itself. For sure, the blocking of private marks in Germany, which is Europe's largest market, will significantly reduce their attractiveness in the rest of Europe.

Long-term NHS investment plan

Tony Blair, Britain's prime minister, has promised thousands of new beds, physicians, nurses and other staff as well as 100 new or modernized hospitals. He also has pledged that by 2005 no patient will have to wait more than nine months from first consulting his primary care physician to an operation. By 2008, the target will be six months. National Health Service (NHS) patients also will acquire new rights, including having representatives on all NHS management boards.

The plan was aimed at making the NHS "once again the health care system that the world envies," Blair said.

Ian Boyle, chairman of the British Medical Association, said parts of the proposed government plan were "unacceptable in their current form." The proposal to prohibit private practice for hospital consultants for the first seven years after their appointment "could drive doctors out of the NHS," he said.

Organizations for the elderly also have voiced their disappointment that only the nursing element of long-term care is to become free, in spite of the recommendations of last year's royal commission, which recommended the inclusion of all personal care, including washing, feeding and changing.

Blair also implied a new and closer relationship between the NHS and the private health care sector, particularly in reducing operation lists and in improving care for the elderly. "There should be no barrier to partnership with the private sector where appropriate," he said.

French legislators target medical devices

France is in the process of developing a series of implementing decrees to ensure tighter regulation of device safety and efficacy. These include premarket notification three months ahead of market launch for a limited number of high-risk devices like pacemakers and a medico-economic benefits analysis as part of the reimbursement review process.

The French Parliament has decided to create from its members a medical technologies working group which will provide input for the increased flow of decision-making on legislation expected on the upcoming parliamentary agenda. The government is expected to focus any new legislation on the performance of notified bodies (third-party testing organizations) and on use and user qualifications applied to medical devices. The first two years of vigilance in France has shown clearly that many negative medical device incidents that are reported are linked to user error.

Glaxo/SKB merger wins 99% backing

Shareholders have overwhelmingly approved the proposed merger between Glaxo Wellcome (London) and SmithKline Beecham (Greenford, England), clearing the way for the creation of one of the largest pharmaceutical companies in the world.

More than 99% of shareholders in the two companies voted in favor of the merger, although some shareholders objected to the options package being awarded to senior executives of the new company. In a mail vote, 38% of Glaxo shareholders and 31% of SKB's either voted against or abstained on a resolution setting out the new options plan. Attention has been concentrated on the award of share options to Jean-Pierre Garnier, chief executive-elect of the new company, which would be worth $23 million if Glaxo SmithKline's share price doubles in three years.

The merger is scheduled to be completed by Sept. 25 following approval by the Federal Trade Commission (FTC) in the U.S. and the High Court in Britain. The FTC has reviewed the deal more extensively than expected, forcing the completion date to be put back one month.

Glaxo SmithKline will have around 7% of the global pharmaceuticals market. In some therapeutic areas, however, like asthma, anti-virals, antibiotics and vaccines, the new company will have up to a 33% market share.

The chairman-elect of Glaxo SmithKline, Richard Sykes, has said that companies will need a 10% share of the global market to compete long-term in a consolidating industry. On this basis, a further significant acquisition cannot be ruled out.

TUMT therapy to get HCFA reimbursement

Transurethral Microwave Thermotherapy (TUMT) using the Prostatron system from EDAP TMS (Vaulx-en-Velin, France) has been increasingly used in hospitals in the U.S. since its approval in 1996.

The company has reported that the Health Care Financing Administration (HCFA; Baltimore, Maryland) has now proposed a payment rate and schedule for reimbursement of TUMT procedures for the treatment of benign prostatic hyperplasia performed in urologists' offices. The new TUMT rate is scheduled to be phased in over a two-year period beginning in January 2001.

HCFA has advised EDAP that in its initial TUMT report, several cost components were inadvertently omitted, resulting in a miscalculated reimbursement rate. "However, we have been advised by HCFA and the American Urological Association (AUA; Baltimore, Maryland) that the rate will be recalculated and will recognize the value of TUMT procedures in urologists' offices," the company said

"The TUMT treatment uses a high-energy, bladder neck procedure that gives physicians the ability to treat BPH with a minimally invasive, anesthesia-free outpatient session," said Eric Simon, CEO of EDAP TMS.

Revenues for 2Q00, at $5.7 million, were up 36% over last year and 10% over 1Q00. Simon said that both Prostatron and lithotripsy product lines contributed to this growth, as well as the first Ablatherm sale to Harlading Hospital (Munich, Germany). Ablatherm uses high-intensity focused ultrasound for the treatment of localized prostate cancer.

Costs incurred in upgrading the installed base of Prostatrons in the U.S. and elsewhere with EDAP's new 30-minute TUMT treatment slightly impacted gross margins in 2Q00, with the company reporting excellent feedback on the upgrade from customers.

"When we combine the recent positive announcements from HCFA on outpatient and inpatient reimbursement proposals with our new 30-minute protocol, we believe the Prostatron is ideally positioned to address growing BPH market needs, especially in the urologist's office environment," Simon said.

Roche withdraws Tamiflu application

Roche (Basel, Switzerland) has withdrawn its European regulatory application to EMEA (London) for the oral flu treatment, Tamiflu (oseltamivir), in order to collect and submit additional data, requested by the Committee for Proprietary Medicinal Products, on the effects of Tamiflu on Type B influenza.

Roche said the request is unlikely to necessitate new clinical trials, and the company is now reanalyzing results from previous studies to extract the required information.

The decision to withdraw the European application coincided with recently published clinical research confirming the drug leads to a 40% reduction in the duration of flu symptoms and a 25% reduction in overall symptom severity. Karl Nicholson of Leicester Royal Infirmary in England, co-author of the research paper in a recent issue of The Lancet, said that the treatment with a neuroaminidase inhibitor such as Tamiflu offers "real benefits to patients."

Roche has announced the filing of a new FDA regulatory submission for marketing approval for the use of Tamiflu as a flu preventative in adults and children over 13 years of age. The submission is based on results of three Phase III trials demonstrating that Tamiflu provides up to 92% protection against development of the infection when taken daily by healthy individuals in contact with flu patients.

Separately, Roche has filed for FDA approval for its chronic hepatitis C treatment, Pegasys, which is a PEGylated sustained action formulation of interferon. Phase III trials have shown Pegasys is more effective than regular interferon therapy against hepatitis C, according to the company, and also is safe and effective with HCV patients with liver cirrhosis.

European deals

Getinge Industrier (Getinge, Sweden) has bought its Irish distributor, Lenken Healthcare, which has offices both in Dublin in the Irish Republic and Belfast in Northern Ireland, for an undisclosed sum. Lenken has been distributor in Ireland for Getinge's anti-decubitus and patient-handling products, as well as its hygiene and sterilization systems for the past 20 years. Getinge, which already has more than 50% of the Northern Ireland market, plans to focus on improving market share of the growing market in the Republic of Ireland.

ICN Pharmaceuticals (Costa Mesa, California) has acquired Solco (Basel, Switzerland) at an undisclosed price. Solco's main product is a wound dressing product from calf blood fibrin, followed by a snake venom-based blood coagulant.

Matritech (Newton, Massachusetts), a producer of cancer screening diagnostics, is acquiring its German distributor, ADL (Freiburg, Germany), for 37,153 of Matritech's shares. Up to 13,700 additional shares may be payable to ADL shareholders, depending on this year's sales performance at the latter firm. "ADL was a natural fit for us, as they have been distributing our NMP22 (bladder cancer test) for several years. They have earned the respect of clinical laboratories and physicians in three very important European countries: Germany, Austria and Switzerland," said David Corbet, Matritech president and CEO.

Merck Eurolab (Darmstadt, Germany) and Ventro Life Sciences (London), owners of Chemdex (Palo Alto, California), are teaming up to provide European pharmaceutical and life science industries with a one-stop e-commerce marketplace for laboratory products and supplies. The deal mirrors an existing business-to-business (B2B) e-commerce project for the U.S. between Chemdex and VWR Scientific Products (West Chester, Pennsylvania), Merck's North American laboratory arm.

Rhodia (Saint Fons, France), the French speciality chemicals company spun off from Rhone-Poulenc prior to the latter's merger with Hoechst to form Aventis (Strasbourg, France), is to acquire Chirex following a cash bid. The $31.25 a share offer, worth around $510 million, is a 55% premium to Chirex's closing price immediately before the bid announcement. Chirex has $35 million in debt, giving an enterprise value of $545 million. Chirex, which also carries out contract research, will be merged with Rhodia's two UK pharmaceuticals facilities to form the basis of a new division offering high-level technology services to the pharmaceuticals industry. This 55% premium being offered to Chirex shareholders indicates how far speciality companies are prepared to go to build strong positions in sectors where there are high technological barriers to entry. Rhodia is a member of the second tier of speciality pharmaceutical companies alongside Ciba (Basel, Switzerland) and Clariant, with sales last year of $5.1 billion.

Elan targets France, Germany for acquisitions

Elan (Dublin, Ireland) said it is seeking suitable acquisitions in Germany and France to increase the size and market coverage of its European sales force. The company is planning to spend some of its $1 billion war chest to buy companies to complement existing operations in Britain, Italy and Spain. Elan reported a 36% rise in revenues to $304.5 million for 2Q00, with a 35% rise in net income before tax and charges to $111.1 million.

Berna Group invests in vaccine production

The Berna Group (Bern, Switzerland), which owns the Swiss Serum and Vaccine Institute (SSI; also Bern), has installed a new hepatitis B production unit in nearby Thorishaus and a new pilot plant for bacterial vaccines in Bern for a total cost of SFr 35 million ($21 million). New products coming up for launch in Europe include the Nasalflu flu vaccine administered by nasal spray, a third-generation hepatitis vaccine and Aerugen vaccine against pseudomonas infection. SSI's new marketing director is Beat Ritschard, who previously was pharma marketing director of Roche's Spanish subsidiary.

Vitoss Scaffold bone filler coming to Europe

Orthovita (Malvern, Pennsylvania) has completed CE marking procedures for its Vitoss Scaffold synthetic cancellous bone-void filler for filling bony gaps in the skeletal system. The filler, a resorbable calcium phosphate that resembles the porosity of normal cancellous bone, is delivered as a pre-formed scaffold matrix which is replaced as bone remodels.

The European market launch began in August, and Orthovita said that market applications for the U.S. have been submitted to the FDA.