The manufacturer of the popular high blood pressure drug, Benicar is the Japanese drug company Daiichi Sankyo.
The company is facing thousands of defective product lawsuits filed by injured patients that should be heard at the end of 2016. The complaint is that the drug caused chronic diarrhea and eventually malnutrition as the intestinal villi is damaged and unable to help absorb nutrients from food. The condition is known as sprue-like enteropathy and is frequently misdiagnosed as a gluten intolerance and Celiac disease. The question for a court will be what did the company know and when did it know it?
Who is Daiichi Sankyo?
Daiichi Sanyko is the second largest pharmaceutical company in Japan and employs about 17,000 workers globally including at its U.S. headquarters in Parsippany, New Jersey and in Tokyo. The company’s website says it provides innovative products to more than 20 countries and has more than 100 years of research under its belt.
The original company, Sankyo Co. Ltd., was started in 1899 by three Japanese businessmen who launched their first product – a digestive enzyme, Taka-Diastase, which came from a fungus. The company was listed on the Tokyo Stock exchange in 1949.
Daiichi Sankyo Co. was established in 2005 by merging Sankyo and Daiichi Pharmaceutical Co. It began operations under the new name two years later.
The company likes to buy other companies pinning its hopes on creating new products, particularly biotech products. But the field is full of promises and has very little to show in the real world. The company’s problems with Benicar are just the latest in a long line of setbacks.
Seven years ago Daiichi purchased German company U3 Pharma for $235 million. The company hoped to develop an antibody approach to fighting cancer, specifically breast, head, neck and non-small cell lung cancer. The company has not only failed to release any drugs but its treatment is still in clinical development.
Benicar was the best-selling drug for Daiichi Sankyo recently bringing it a little over one-quarter of the company’s profits. Benicar works by relaxing or dilating blood vessels. Research showed that blocking angiotensin receptors worked against an elevated blood pressure.
This year, the global pharmaceutical company was accused by the U.S. Department of Justice of improper kickbacks to physicians to encourage the use of its medications Benicar, Tribenzor and Welchol and Azor.
The company created a Physician Organization and Discussion program, also known as PODs. Beginning around early 2005, PODs were the front name for a paid speaker program. Physicians who were members of a POD would receive lavish dinners to speak to others about the drugs, even if it was a single staff member. Internal showed the dinners often exceeded $140 per person, Daiichi’s internal ceiling on a gift of food.
The DOJ became involved because government healthcare programs, Medicare and Medicaid, are often charged with the cost of these prescribed drugs and the Anti-Kickback Statute specifically prohibits improper payments to induce doctors to use drugs.
When an employee blew the whistle on the practice, Daiichi Sankyo Inc. agreed to reimburse state Medicaid programs and the U.S. Government $39 million. The company also agreed to work with the U.S. Department of Health and Human Services – Office of Inspector General on a corporate integrity agreement, which will allow the government to continue monitoring Daiichi Sankyo for violations.
The whistleblower, a former sales representative, blew the whistle under the False Claims Act, which is intended to combat health care fraud. For her part, the whistleblower, Kathy Fragoules, received $6.1 million of the recovery.
The case is captioned U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).
Benicar has been a blockbuster medication that brought Daiichi $2.6 billion last year but it’s soon to lose its exclusivity. That along with the U3 setback as well as the DOJ fine has Daiichi shutting down its German antibody subsidiary and cutting in half its U.S. workforce. The Research and Development unit from Germany will relocate to Tokyo.
Daiichi purchased Ranbaxy Laboratories in 2008 but that company had manufacturing problems and last year the company agreed to sell it to SunPharma.
More recently, the company partnered with AstraZeneca to market FluMist in Japan and with Sanofi Japan’s unit to launch a childhood vaccine of diphtheria, pertussis, tetanus and polio to be rolled out in Japan. This spring Daiichi partnered with Takeda to distribute a flu vaccine.
Daiichi also makes Savaysa a blood-clot fighter and Movantik, a constipation drug. The anticoagulant field is a crowded one with Xarelto, Eliquis and Pradaxa already competing for patients, not to mention the old standby with fewer complications, warfarin (Coumadin.) It didn’t help that the Food and Drug Administration put a black-box warning on Savaysa for users with a normal renal function.
As Daiichi Sankyo’s CEO says the mission of the company is “to contribute to the enrichment of the quality of life around the world through the creation of innovative pharmaceuticals and through the provision of pharmaceuticals that address diverse medical needs.”
“We abide by regulatory and legal requirements, as well as our own ethical standards in every interaction with employees, patients, healthcare professionals, partners and all stakeholders,” says the mission statement of Daiichi Sankyo.
Maybe not. The company is now facing in excess of 1,000 lawsuits over Benicar and the first trials should begin later next year. We will soon see how much these plaintiffs feel their lives were enriched after taking Benicar.