Tag Archives: PHAR08

Business

U.S. court rejects J&J bankruptcy strategy for thousands of talc lawsuits

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Jan 30 (Reuters) – A U.S. appeals court on Monday shot down Johnson & Johnson’s (JNJ.N) attempt to offload tens of thousands of lawsuits over its talc products into bankruptcy court. The ruling marked the first major repudiation of an emerging legal strategy with the potential to upend U.S. corporate liability law.

J&J is among four major companies that have filed so-called Texas two-step bankruptcies to avoid potentially massive lawsuit exposure. The tactic involves creating a subsidiary to absorb the liabilities and to immediately file for Chapter 11.

The court ruled the healthcare conglomerate improperly placed its subsidiary into bankruptcy even though it faced no financial distress. J&J’s two-step sought to halt more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer. The appeals court ruling revives those lawsuits.

Reuters last year detailed the secret planning of Texas two-steps by Johnson & Johnson and other major firms in a series of reports exploring corporate attempts to evade lawsuits through bankruptcies.

Monday’s decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia dismissed the bankruptcy filed by the J&J subsidiary in 2021. Before the filing, J&J had faced costs of $3.5 billion in verdicts and settlements.

J&J shares closed down 3.7% – the biggest one-day percentage decline in two years. The company said in a statement that it would challenge the ruling and that its talc products are safe.

Plaintiffs attorneys and some legal experts have argued the two-step could set a dangerous precedent, providing a blueprint for any corporation to easily avoid undesirable litigation. The appeals court decision could force companies considering the strategy to more carefully consider its risks, two legal experts said.

“It is a push back on the notion that any company anywhere can use the same tactic to get rid of their mass tort liability,” said Lindsey Simon, a professor at University of Georgia School of Law.

Bankruptcy filings typically suspend litigation in trial courts, forcing plaintiffs into often time-consuming settlement negotiations while leaving them unable to pursue their cases in the courts where they originally sued.

The 3rd Circuit ruling does not directly impact three other Texas two-step bankruptcies, filed by subsidiaries of Koch Industries-owned Georgia Pacific, global construction giant Saint-Gobain(SGOB.PA), and Trane Technologies (2IS.F). Those cases fall under the jurisdiction of the 4th Circuit appeals court. 3M (MMM.N) attempted a similar maneuver, which is currently pending in the 7th Circuit.

Those companies did not comment on the 3rd Circuit ruling or did not immediately respond to inquiries. All have previously defended the bankruptcies as the best way to fairly compensate claimants. Plaintiffs’ attorneys have countered that the Texas two-step is an improper manipulation of the bankruptcy system. The strategy uses a Texas law to split an existing company in two, creating the new subsidiary meant to shoulder the lawsuits.

New Jersey-based Johnson & Johnson, valued at more than $400 billion, said its subsidiary’s bankruptcy was initiated in good faith. J&J initially pledged $2 billion to the subsidiary to resolve talc claims and entered into an agreement to fund an eventual settlement approved by a bankruptcy judge.

“Resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders,” J&J said.

A three-judge panel on the appeals court rejected J&J’s argument, finding the company’s subsidiary, LTL Management, was created solely to file for Chapter 11 protection but had no legitimate need for it. Only a debtor in financial distress can seek bankruptcy, the panel ruled. The judges pointed out that J&J assured that it would give LTL plenty of money to pay talc claimants.

“Good intentions – such as to protect the J&J brand or comprehensively resolve litigation – do not suffice alone,” the judges said in a 56-page opinion. “LTL, at the time of its filing, was highly solvent with access to cash to meet comfortably its liabilities.”

‘PROJECT PLATO’

The decision could force J&J to fight talc lawsuits for years in trial courts. The company has a mixed record fighting the suits so far. While the firm was hit with major judgments in some cases before filing bankruptcy, more than 1,500 talc lawsuits have been dismissed and the majority of cases that have gone to trial have resulted in verdicts favoring J&J, judgments for the company on appeal, or mistrials, according to its subsidiary’s court filings.

A December 2018 Reuters investigation revealed that J&J officials knew for decades about tests showing that the company’s talc sometimes contained traces of carcinogenic asbestos but kept that information from regulators and the public. J&J has said its talc does not contain asbestos and does not cause cancer.

Facing unrelenting litigation, J&J enlisted law firm Jones Day, which had helped other companies execute Texas two-step bankruptcies to address asbestos-related lawsuits.

J&J’s effort, as Reuters reported last year, was internally dubbed “Project Plato,” and employees working on it signed confidentiality agreements. A company lawyer warned them to tell no one, including their spouses, about the plan.

Jones Day did not immediately respond to a request for comment.

The Texas two-step has garnered criticism from Democratic lawmakers in Washington, and inspired proposed legislation that would severely restrict the practice.

Senator Sheldon Whitehouse, a Democrat from Rhode Island, cheered Monday’s appeals court decision. Whitehouse chaired the first congressional hearing scrutinizing two-step bankruptcies in February of last year.

“Bankruptcy is meant to give honest debtors in unfortunate circumstances a fresh start,” he said, not to allow “large, highly profitable corporations” to avoid accountability for wrongdoing with a legal “shell game.”

Reporting by Tom Hals in Wilmington, Delaware; Mike Spector in New York; and Dan Levine in San Francisco; additional reporting by Dietrich Knauth and Chuck Mikolajczak in New York; editing by Bill Berkrot and Brian Thevenot

Our Standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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Health

U.S. CDC still looking at potential stroke risk from Pfizer bivalent COVID shot

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Jan 26 (Reuters) – New data from one U.S. Centers for Disease Control and Prevention (CDC) database shows a possible stroke risk link for older adults who received an updated Pfizer (PFE.N)/BioNTech (22UAy.DE) COVID-19 booster shot, but the signal is weaker than what the agency had flagged earlier in January, health officials said on Thursday.

U.S. Food and Drug Administration officials said they had not detected a link between the shots and strokes in two other safety monitoring databases.

The new data was presented at a meeting of outside experts that advise the FDA on vaccine policy.

Earlier this month, U.S. health officials said they had detected the possible link to ischemic strokes in people over age 65 who received the newer booster shots in its Vaccine Safety Datalink (VSD) database. They said at the time it was very unlikely to represent a true clinical risk.

Dr. Nicola Klein of healthcare company Kaiser Permanente, which maintains VSD data for the CDC, said the rate of strokes observed in the database had slowed in recent weeks, but the signal was still statistically significant, meaning likely not by chance.

Most of the confirmed cases had also received a flu vaccine at the same time, which might be a factor, she said.

FDA scientist Richard Forshee said the agency plans to study whether there is any increased risk of stroke from receiving the two shots at the same time.

Both agencies still recommend older adults receive the booster shots, now tailored to target Omicron variants as well as the original coronavirus.

Dr. Walid Gellad, professor of medicine at University of Pittsburgh, said the issue required further investigation.

“Sometimes signals are not clear,” Gellad said in an email. “It makes sense to look into it more, and it doesn’t make sense to change practice given the known benefits (of getting the booster) in this age group.”

(This story has been corrected to fix the name to Nicola from Nicole in paragraph 5)

Reporting by Michael Erman; Editing by Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

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World

China COVID peak to last 2-3 months, hit rural areas next -expert

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  • Peak of COVID wave seen lasting 2-3 months – epidemiologist
  • Elderly in rural areas particularly at risk
  • People mobility indicators tick up, but yet to fully recover

BEIJING, Jan 13 (Reuters) – The peak of China’s COVID-19 wave is expected to last two to three months, and will soon swell over the vast countryside where medical resources are relatively scarce, a top Chinese epidemiologist has said.

Infections are expected to surge in rural areas as hundreds of millions travel to their home towns for the Lunar New Year holidays, which officially start from Jan. 21, known before the pandemic as the world’s largest annual migration of people.

China last month abruptly abandoned the strict anti-virus regime of mass lockdowns that fuelled historic protests across the country in late November, and finally reopened its borders this past Sunday.

The abrupt dismantling of restrictions has unleashed the virus onto China’s 1.4 billion people, more than a third of whom live in regions where infections are already past their peak, according to state media.

But the worst of the outbreak was not yet over, warned Zeng Guang, the former chief epidemiologist at the Chinese Center for Disease Control and Prevention, according to a report published in local media outlet Caixin on Thursday.

“Our priority focus has been on the large cities. It is time to focus on rural areas,” Zeng was quoted as saying.

He said a large number of people in the countryside, where medical facilities are relatively poor, are being left behind, including the elderly, the sick and the disabled.

Authorities have said they were making efforts to improve supplies of antivirals across the country. Merck & Co’s (MRK.N) molnupiravir was made available in China from Friday.

The World Health Organization this week also warned of the risks stemming from holiday travelling.

The UN agency said China was heavily under-reporting deaths from COVID, although it is now providing more information on its outbreak.

“Since the outbreak of the epidemic, China has shared relevant information and data with the international community in an open, transparent and responsible manner,” foreign ministry official Wu Xi told reporters.

Health authorities have been reporting five or fewer deaths a day over the past month, numbers which are inconsistent with the long queues seen at funeral homes and the body bags seen coming out of crowded hospitals.

China has not reported COVID fatalities data since Monday. Officials said in December they planned to issue monthly, rather than daily updates, going forward.

Although international health experts have predicted at least 1 million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, one of the lowest death rates in the world.

DIPLOMATIC TENSIONS

Concerns over data transparency were among the factors that prompted more than a dozen countries to demand pre-departure COVID tests from travellers arriving from China.

Beijing, which had shut its borders from the rest of the world for three years and still demands all visitors get tested before their trip, objects to the curbs.

Wu said accusations by individual countries were “completely unreasonable, unscientific and unfounded.”

Tensions escalated this week with South Korea and Japan, with China retaliating by suspending short-term visas for their nationals. The two countries also limit flights, test travellers from China on arrival, and quarantine the positive ones.

Japan’s Chief Cabinet Secretary Hirokazu Matsuno said on Friday Tokyo will continue to demand transparency, labelling Beijing’s retaliation as extremely “regrettable.”

Parts of China were returning to normal life.

In the bigger cities in particular, residents are increasingly on the move, pointing to a gradual, though so far slow, rebound in consumption and economic activity.

An immigration official said on Friday 490,000 daily trips on average were made in and out of China since it reopened on Jan. 8, only 26% of the pre-pandemic levels.

Singapore-based Chu Wenhong was among those who finally got reunited with their parents for the first time in three years.

“They both got COVID, and are quite old. I feel quite lucky actually, as it wasn’t too serious for them, but their health is not very good,” she said.

CAUTION

While China’s reopening has given a boost to financial assets globally, policymakers around the world worry it may revive inflationary pressures.

However, December’s trade data released on Friday provided reasons to be cautious about China’s recovery pace.

Jin Chaofeng, whose company exports outdoor rattan furniture, said he has no expansion or hiring plans for 2023.

“With the lifting of COVID curbs, domestic demand is expected to improve but not exports,” he said.

Data next week is expected to show China’s economy grew just 2.8% in 2022, its second-slowest since 1976, the final year of Mao Zedong’s decade-long Cultural Revolution, according to a Reuters poll.

Some analysts say last year’s lockdowns will leave permanent scars on China, including by worsening its already bleak demographic outlook.

Growth is then seen rebounding to 4.9% this year, still well below the pre-pandemic trend.

Additional reporting by the Beijing and Shanghai newsrooms; Writing by Marius Zaharia; Editing by Raju Gopalakrishnan

Our Standards: The Thomson Reuters Trust Principles.

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World

China imposes transit curbs for S.Korea, Japan in growing COVID spat

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  • New curbs for S.Korea, Japan nationals transiting China
  • China says visa suspensions for S.Korea, Japan “reasonable”
  • Escalating diplomatic spat may complicate economic relations
  • Social media users lash out at S.Korea’s “insulting” COVID curbs

BEIJING, Jan 11 (Reuters) – China introduced transit curbs for South Korean and Japanese nationals on Wednesday, in an escalating diplomatic spat over COVID-19 curbs that is marring the grand re-opening of the world’s second-largest economy after three years of isolation.

China removed quarantine mandates for inbound travellers on Sunday, one of the last vestiges of the world’s strictest regime of COVID restrictions, which Beijing abruptly began dismantling in early December after historic protests.

But worries over the scale and impact of the outbreak in China, where the virus is spreading unchecked, have prompted more than a dozen countries to demand negative COVID test results from people arriving from China.

Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine. In South Korea, quarantine is at the traveller’s own cost.

In response, the Chinese embassies in Seoul and Tokyo said on Tuesday they had suspended issuing short-term visas for travellers to China, with the foreign ministry slamming the testing requirements as “discriminatory.”

That prompted an official protest from Japan to China, while South Korean foreign minister Park Jin said that Seoul’s decision was based on scientific evidence, not discriminatory and that China’s countermeasures were “deeply regrettable.”

In a sign of escalating tensions on Wednesday, China’s immigration authority suspended its transit visa exemptions for South Koreans and Japanese.

The spat may affect economic relations between the three neighbours as well.

Japanese department store operator Isetan Mitsukoshi Holdings Ltd (3099.T) and supermarket operator Aeon Co (8267.T) said they may have to rethink personnel transfers to China depending on how long the suspension lasts.

“We won’t be able to make short-term business trips, but such trips had dwindled during COVID anyway, so we don’t expect an immediate impact. But if the situation lasts long, there will be an effect,” said a South Korean chip industry source who declined to be identified, as the person was not authorised to speak to media.

China requires negative test results from visitors from all countries.

COUNTING DEATHS

Some of the governments that announced curbs on travellers from China cited concerns over Beijing’s data transparency.

The World Health Organization has said China was underreporting deaths.

China’s health authorities have been reporting five or fewer deaths a day over the past month, numbers that are inconsistent with the long queues seen at funeral homes. In a first, they did not report COVID fatalities data on Tuesday.

China’s Center for Disease Control and Prevention and the National Health Commission did not immediately respond to requests for comment.

Without mentioning whether daily reporting had been discontinued, Liang Wannian, head of a COVID expert panel under the national health authority, told reporters deaths can only be accurately counted after the pandemic is over.

China should ultimately determine death figures by looking at excess mortality, Wang Guiqiang, the head of the infectious diseases department at Peking University First Hospital said at the same news conference.

Although international health experts have predicted at least one million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, a fraction of what other countries have reported as they reopened.

China says it has been transparent with its data.

State media said the COVID wave was already past its peak in the provinces of Henan, Jiangsu, Zhejiang, Guangdong, Sichuan and Hainan, as well as in the large cities of Beijing and Chongqing – home to more than 500 million people combined.

‘INSULTING’

On Wednesday, Chinese state media devoted extensive coverage of what they called as “discriminatory” border rules in South Korea and Japan.

Nationalist tabloid Global Times defended Beijing’s retaliation as a “direct and reasonable response to protect its own legitimate interests, particularly after some countries are continuing hyping up China’s epidemic situation by putting travel restrictions for political manipulation.”

Chinese social media anger mainly targeted South Korea, whose border measures are the strictest among the countries that announced new rules.

Videos circulating online showed special lanes coordinated by soldiers in uniform for arrivals from China at the airport, with travellers given yellow lanyards with QR codes for processing test results.

One user of China’s Twitter-like Weibo said singling out Chinese travellers was “insulting” and akin to “people treated as criminals and paraded on the streets.”

Annual spending by Chinese tourists abroad reached $250 billion before the pandemic, with South Korea and Japan among the top shopping destinations.

Repeated lockdowns have hammered China’s $17 trillion economy. The World Bank estimated its 2022 growth slumped to 2.7%, its second-slowest pace since the mid-1970s after 2020.

It predicted a rebound to 4.3% for 2023, but that is 0.9 percentage points below its June forecast because of the severity of COVID disruptions and weakening external demand.

($1 = 6.7666 Chinese yuan renminbi)

Additional reporting by Beijing Newsroom; Kaori Kaneko, Mari Shiraki and Elaine Lies in Tokyo; Joyce Lee, Hyunsu Yim and Heekyong Yang in Seoul
Writing by Marius Zaharia; Editing by Gerry Doyle and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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World

China retaliates against South Korea’s COVID curbs, says outbreaks past peaks

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  • China embassy decries “discriminatory” S.Korea border rules
  • Some cities say peak of COVID infections was last month
  • Chinese state media criticise Pfizer over Paxlovid price

BEIJING, Jan 10 (Reuters) – Beijing retaliated on Tuesday against South Korea’s COVID-19 curbs on travellers from China, while state media further downplayed the severity of the outbreak in the last major economy to reopen its borders after three years of isolation.

China ditched mandatory quarantines for arrivals and allowed travel to resume across its border with Hong Kong on Sunday, removing the last major restrictions under the “zero-COVID” regime which it abruptly began dismantling in early December after historic protests against the curbs.

But the virus is spreading unchecked among its 1.4 billion people and worries over the scale and impact of its outbreak have prompted South Korea, the United States and other countries to require negative COVID tests from travellers from China.

Although China imposes similar testing requirements for all arrivals, foreign ministry spokesperson Wang Wenbin told reporters on Tuesday the entry curbs for Chinese travellers were “discriminatory.”

“We will take reciprocal measures,” Wang said, without elaborating.

The Chinese embassy in South Korea has suspended issuing short-term visas for South Korean visitors, it said on Tuesday, the first retaliatory move against nations imposing COVID-19 curbs on travellers from China.

The embassy will adjust the policy subject to the lifting of South Korea’s “discriminatory entry restrictions” against China, it said on its official WeChat account.

Kyodo news agency, quoting multiple travel industry sources, said China has told travel agencies that it has stopped issuing new visas in Japan. An AFP journalist tweeted that the Chinese embassy in Japan released a statement confirming the curbs on Tuesday but removed it from its website within minutes.

With the virus let loose, China has stopped publishing daily infection tallies. It has been reporting five or fewer deaths a day since the policy U-turn, figures that have been disputed by the World Health Organization and are inconsistent with funeral reporting surging demand.

Some governments have raised concerns about Beijing’s data transparency as international experts predict at least 1 million deaths in China this year. Washington has also raised concerns about future potential mutations of the virus.

China dismisses criticism over its data as politically-motivated attempts to smear its “success” in handling the pandemic and said any future mutations are likely to be more infectious but less harmful.

“Since the outbreak, China has had an open and transparent attitude,” the foreign ministry’s Wang said.

PAST THE PEAK

State media downplayed the severity of the outbreak.

An article in Health Times, a publication managed by People’s Daily, the ruling Communist Party’s official newspaper, quoted several officials as saying infections have been declining in the capital Beijing and several Chinese provinces.

Kan Quan, director of the Office of the Henan Provincial Epidemic Prevention and Control, said nearly 90% of people in the central province of 100 million people had been infected as of Jan. 6.

Beijing acting mayor Yin Yong said the capital was also past its peak. Li Pan, from the Municipal Health Commission in the city of Chongqing, said the peak there was reached on Dec. 20.

In the eastern province of Jiangsu, the peak was reached on Dec. 22, while in neighbouring Zheijiang province “the first wave of infections has passed smoothly,” officials said.

Financial markets looked through the latest border curbs as mere inconvenience, with the yuan hitting a nearly five-month high.

Although daily flights in and out of China are still at a tenth of pre-COVID levels, businesses across Asia, from South Korean and Japanese shop owners to Thai tour bus operators and K-pop groups celebrated the prospect of more Chinese tourists.

Chinese shoppers spent $250 billion a year overseas before COVID.

PFIZER CRITICISM

The border rules were not the only COVID conflict brewing in China.

State media lashed out at Pfizer Inc (PFE.N) over the price for its COVID treatment Paxlovid.

“It is not a secret that U.S. capital forces have already accumulated quite a fortune from the world via selling vaccines and drugs, and the U.S. government has been coordinating all along,” nationalist tabloid Global Times said in an editorial.

Pfizer’s Chief Executive Albert Bourla said on Monday the company was in discussions with Chinese authorities about a price for Paxlovid, but not over licensing a generic version in China.

China’s abrupt change of course in COVID policies has caught many hospitals ill-equipped, while smaller cities were left scrambling to secure basic anti-fever drugs.

Yu Weishi, chairman of Youcare Pharmaceutical Group, told Reuters his firm boosted output of its anti-fever drugs five-fold to one million boxes a day in the past month.

Wang Lili, general manager at another pharmaceutical firm, CR Double Crane (600062.SS), told Reuters that intravenous drips were their most in-demand product.

“We are running 24/7,” Wang said.

Reporting by Beijing and Shanghai bureaus; Writing by Marius Zaharia; Editing by Raju Gopalakrishnan

Our Standards: The Thomson Reuters Trust Principles.

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World

China’s ‘great migration’ kicks-off under shadow of COVID

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SHANGHAI, Jan 7 (Reuters) – China on Saturday marked the first day of “chun yun”, the 40-day period of Lunar New Year travel known pre-pandemic as the world’s largest annual migration of people, bracing for a huge increase in travellers and the spread of COVID-19 infections.

This Lunar New Year public holiday, which officially runs from Jan. 21, will be the first since 2020 without domestic travel restrictions.

Over the last month China has seen the dramatic dismantling of its “zero-COVID” regime following historic protests against a policy that included frequent testing, restricted movement, mass lockdowns and heavy damage to the world’s No.2 economy.

Investors are hoping that the reopening will eventually reinvigorate a $17-trillion economy suffering its lowest growth in nearly half a century.

But the abrupt changes have exposed many of China’s 1.4 billion population to the virus for the first time, triggering a wave of infections that is overwhelming some hospitals, emptying pharmacy shelves of medicines and causing long lines to form at crematoriums.

The Ministry of Transport said on Friday that it expects more than 2 billion passengers to take trips over the next 40 days, an increase of 99.5% year-on-year and reaching 70.3% of trip numbers in 2019.

There was mixed reaction online to that news, with some comments hailing the freedom to return to hometowns and celebrate the Lunar New Year with family for the first time in years.

Many others, however, said they would not travel this year, with worry of infecting elderly relatives a common theme.

“I dare not go back to my hometown, for fear of bringing the poison back,” said one such comment on the Twitter-like Weibo.

There are widespread concerns that the great migration of workers in cities to their hometowns will cause a surge in infections in smaller towns and rural areas that are less well-equipped with ICU beds and ventilators to deal with them.

Authorities say they are boosting grassroots medical services, opening more rural fever clinics and instituting a “green channel” for high risk patients, especially elderly people with underlying health conditions, to be transferred from villages directly to higher level hospitals.

“China’s rural areas are wide, the population is large, and the per capita medical resources are relatively insufficient,” National Health Commission spokesman Mi Feng said on Saturday.

“It’s necessary to provide convenient services, accelerate vaccination for the elderly in rural areas and the construction of grassroots lines of defense.”

INFECTION PEAK REACHED

Some analysts are now saying the current wave of infections may have already peaked.

Ernan Cui, an analyst at Gavekal Dragonomics in Beijing, cited several online surveys as indicating that rural areas were already more widely exposed to COVID infections than initially thought, with an infection peak already reached in most regions, noting there was “not much difference between urban and rural areas.”

On Sunday China will reopen its border with Hong Kong and will also end a requirement for travellers coming from abroad to quarantine. That effectively opens the door for many Chinese to travel abroad for the first time since borders slammed shut nearly three years ago, without fear of having to quarantine on their return.

Jillian Xin, who has three children and who lives in Hong Kong, said she was “incredibly excited” about the border opening, especially as it means seeing family in Beijing more easily.

“For us, the border opening means my kids can finally meet their grandparents for the first time since the pandemic began,” she said. “Two of our children have never been able to see their grandpa, so we cannot wait for them to meet.”

China’s surge in cases has caused concern internationally and more than a dozen countries are now demanding COVID tests from travellers from China. The World Health Organisation said on Wednesday that China’s COVID data underrepresents the number of hospitalisations and deaths from the disease.

Chinese officials and state media have defended the handling of the outbreak, playing down the severity of the surge and denouncing foreign travel requirements for its residents.

On Saturday in Hong Kong, people who had made appointments had to queue for about 90 minutes at a centre for PCR tests needed for travel to countries including mainland China.

TREATMENT TO THE FORE

For much of the pandemic, China poured resources into a vast PCR testing program to track and trace COVID-19 cases, but the focus is now shifting to vaccines and treatment.

In Shanghai, for example, the city government on Friday announced an end to free PCR tests for residents from Jan. 8.

A circular published by four government ministries Saturday signalled a reallocation of financial resources to treatment, outlining a plan for public finances to subsidise 60% of treatment costs until March 31.

Meanwhile, sources told Reuters that China is in talks with Pfizer Inc (PFE.N) to secure a licence that will allow domestic drugmakers to manufacture and distribute a generic version of the U.S. firm’s COVID antiviral drug Paxlovid in China.

Many Chinese have been attempting to buy the drug abroad and have it shipped to China.

On the vaccine front, China’s CanSino Biologics Inc (6185.HK) announced it has begun trial production for its COVID mRNA booster vaccine, known as CS-2034.

China has relied on nine domestically-developed vaccines approved for use, including inactivated vaccines, but none have been adapted to target the highly-transmissible Omicron variant and its offshoots currently in circulation.

The overall vaccination rate in the country is above 90%, but the rate for adults who have had booster shots drops to 57.9%, and to 42.3% for people aged 80 and older, according to government data released last month.

China reported three new COVID deaths in the mainland for Friday, bringing its official virus death toll since the pandemic began to 5,267, one of the lowest in the world.

International health experts believe Beijing’s narrow definition of COVID deaths does not reflect a true toll, and some predict more than a million deaths this year.

Reporting by Casey Hall in Shanghai, Julie Zhu in Hong Kong and Kevin Huang
Additional reporting by Jindong Zhang
Editing by Tony Munroe and Frances Kerry

Our Standards: The Thomson Reuters Trust Principles.

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Business

Eisai, Biogen receives U.S. FDA approval for Alzheimer’s drug, applies for full approval

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Jan 7 (Reuters) – The U.S. Food and Drug Administration on Friday approved the Alzheimer’s drug lecanemab developed by Eisai Co Ltd (4523.T) and Biogen Inc (BIIB.O) for patients in the earliest stages of the mind-wasting disease.

Eisai and Biogen said on Saturday the Japanese drugmaker had applied for full FDA approval of the drug.

The drug, to be sold under the brand Leqembi, belongs to a class of treatments that aims to slow the advance of the neurodegenerative disease by removing sticky clumps of the toxic protein beta amyloid from the brain.

Nearly all previous experimental drugs using the same approach had failed.

“Today’s news is incredibly important,” said Dr. Howard Fillit, chief science officer of the Alzheimer’s Drug Discovery Foundation. “Our years of research into what is arguably the most complex disease humans face is paying off and it gives us hope that we can make Alzheimer’s not just treatable, but preventable.”

Eisai said the drug would launch at an annual price of $26,500. Biogen shares, which had been halted, were up 3% at $279.40.

The Japanese company said it also plans to apply for marketing authorization for Leqembi in Japan and the European Union by the end of its business year on March 31.

Eisai estimated the number of U.S. patients eligible for the drug would reach around 100,000 within three years, increasing gradually from there over the medium to long term.

Dr. Erik Musiek, A Washington University neurologist at Barnes-Jewish Hospital, said he was “pleasantly surprised” by the drug’s price.

“Considering the marketplace and the fact that we have no other good disease-modifying treatments, I think it’s in the ballpark of what I would expect,” he said.

Initial patient access will be limited by a number of factors including reimbursement restrictions by Medicare, the U.S. government insurance program for Americans aged 65 and older who represent some 90% of individuals likely to be eligible for Leqembi.

“Without Centers for Medicare & Medicaid Services (CMS) and insurance coverage … access for those who could benefit from the newly-approved treatment will only be available to those who can pay out-of-pocket,” the Alzheimer’s Association said in a statement.

Leqembi was approved under the FDA’s accelerated review process, an expedited pathway that speeds access to a drug based on its impact on underlying disease-related biomarkers believed to predict a clinical benefit.

“This treatment option is the latest therapy to target and affect the underlying disease process of Alzheimer’s instead of only treating the symptoms of the disease,” FDA neuroscience official Billy Dunn said in a statement.

CMS said on Friday that current coverage restrictions for drugs approved under the accelerated pathway could be reconsidered based on its ongoing review of available information.

If the drug receives traditional FDA approval, CMS said it would provide broader coverage. Eisai officials have said the company plans to submit data from a recent successful clinical trial in 1,800 patients as the basis for a full standard review of Leqembi.

The CMS decision was largely in response to a previous Alzheimer’s treatment from Eisai and Biogen. Aducanumab, sold under the brand name Aduhelm, won accelerated approval in 2021 with little evidence that the drug slowed cognitive decline and despite objections by the FDA’s outside experts.

Biogen initially priced Aduhelm at $56,000 per year before cutting the price in half. With limited acceptance and insurance coverage, sales were only $4.5 million in the first nine months of 2022.

Lecanemab is intended for patients with mild cognitive impairment or early Alzheimer’s dementia, a population that doctors believe represents a small segment of the estimated 6 million Americans currently living with the memory-robbing illness.

To receive the treatment, patients will need to undergo testing to show they have amyloid deposits in their brain – either through brain imaging or a spinal tap. They will also need to undergo periodic MRI scans to monitor for brain swelling, a potentially serious side effect associated with this type of drug.

The medicine’s label says doctors should exercise caution if lecanemab patients are given blood clot preventers. This could be a safety risk, according to an autopsy analysis published this week of a lecanemab patient who had a stroke and later died.

In the large trial of lecanemab, which is given by infusion, the drug slowed the rate of cognitive decline in patients with early Alzheimer’s by 27% compared to a placebo. Nearly 13% of patients treated with Leqembi in the trial had brain swelling.

Dr. Babak Tousi, a neuro-geriatrician at the Cleveland Clinic, said the approval will make a “big difference” in the field because it is based on biomarkers rather than just symptoms.

“It’s going to change how we make a diagnosis for Alzheimer’s disease, with more accuracy,” he said.

Tousi acknowledged that the benefit of the drug will likely be modest. “Still, it is a benefit that we were not able to achieve” before this approval.

Reporting by Deena Beasley in Los Angeles and Bhanvi Satija in Bengaluru, additional reporting Jaiveer Shekhawat; Editing by Bill Berkrot, David Gregorio and William Mallard

Our Standards: The Thomson Reuters Trust Principles.

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Business

Congressional report: U.S. FDA broke own protocols in approving Biogen Alzheimer’s drug

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WASHINGTON, Dec 29 (Reuters) – The U.S. Food and Drug Administration failed to adhere to its own guidance and internal practices during the approval process for Biogen’s (BIIB.O) Alzheimer’s drug Aduhelm, which was “rife with irregularities,” a congressional report showed on Thursday.

The FDA’s interactions with Biogen were “atypical” and did not follow the agency’s documentation protocol, according to a staff report on the findings of an 18-month investigation conducted by two House of Representatives committees into the drug’s regulatory review, approval, pricing, and marketing.

The FDA approved Aduhelm in June 2021 under an accelerated approval pathway over the objections of its panel of outside advisers, who did not believe data definitively proved the drug’s benefit to patients.

It was authorized based on evidence that it could reduce brain plaques, a likely contributor to Alzheimer’s, rather than proof that it slowed progression of the lethal mind-wasting disease.

The Medicare program restricted its coverage, which has led to severely limited use of the Biogen drug.

Biogen set an “unjustifiably high” price by initially setting Aduhelm’s price at $56,000 per year despite a lack of demonstrated clinical benefit in a broad patient population, the report said, adding that the company’s own internal projections showed it expected the drug to be a burden to Medicare and costly to patients.

“The findings in this report raise serious concerns about FDA’s lapses in protocol and Biogen’s disregard of efficacy and access in the approval process for Aduhelm,” the report, prepared by the staffs of the House Committee on Oversight and Reform and House Committee on Energy and Commerce, concluded.

The agency should ensure that all substantive interactions with drug sponsors are properly memorialized, establish a protocol for joint briefing documents with drug sponsors, and update its industry guidance on the developments and review of new Alzheimer’s Drugs, the report recommended.

Biogen and other drugmakers should communicate to the FDA any concerns over safety and efficacy to the FDA as well as take value and patient access into consideration when setting prices, the report said.

An FDA spokesperson said the FDA’s decision to approve Aduhelm was based on scientific evaluation of the data contained in the application.

He pointed to the FDA’s internal review finding its staff’s interactions with Biogen appropriate.

“It is the agency’s job to frequently interact with companies in order to ensure that we have adequate information to inform our regulatory decision-making. We will continue to do so, as it is in the best interest of patients,” he said, adding that the agency will continue to use the accelerated approval pathway whenever appropriate.

The FDA has already begun implementing some of the report’s recommendations, the spokesperson said.

“Biogen stands by the integrity of the actions we have taken,” the Cambridge, Mass.-based biotech company said in an emailed statement.

“As stated in the congressional report, an (FDA) review concluded that, ‘There is no evidence that these interactions with the sponsor in advance of filing were anything but appropriate in this situation,'” Biogen said.

Documents obtained by the committees show that FDA staff and Biogen held at least 115 meetings, calls, and email exchanges over a 12-month period starting July 2019.

The total number of meetings is unknown because the FDA failed to keep a clear record of informal meetings and interactions between its staff and Biogen representatives. The investigation identified an additional 66 calls and email exchanges that were not memorialized.

The FDA inappropriately collaborated with Biogen on a joint briefing document for the Peripheral and Central Nervous System (PCNS) Advisory Committee, the report said, with FDA and Biogen staff working closely for months ahead of the Nov. 6, 2020 meeting to prepare the document, which failed to adequately represent differing views within the agency.

“Using a joint briefing document afforded Biogen advance insight into FDA’s responses and direct guidance from the agency in drafting the company’s own sections. For example, in an exchange of the draft briefing document on October 9, 2020, FDA staff asked Biogen to move a paragraph drafted by the agency into Biogen’s section of the memorandum—a change reflected when the document was finalized,” the report made public to media organizations said.

When none of the advisory panel members voted to approve Aduhelm, the FDA pivoted to using its accelerated approval pathway – typically used for rare diseases or small patient populations that lack access to effective treatments – despite having considered the drug under the traditional approval pathway for nine months, the report said.

It did so on a substantially abbreviated timeline, approving it after three weeks of review, and for a broad label indication of “people with Alzheimer’s disease” that was unsupported by clinical data, the report said.

Internal documents obtained by the investigation showed that Biogen accepted the indication despite its own reservations over the lack of evidence Aduhelm could help patients at disease stages outside of its clinical trials.

Reporting by Ahmed Aboulenein; editing by Diane Craft

Our Standards: The Thomson Reuters Trust Principles.

Ahmed Aboulenein

Thomson Reuters

Washington-based correspondent covering U.S. healthcare and pharmaceutical policy with a focus on the Department of Health and Human Services and the agencies it oversees such as the Food and Drug Administration, previously based in Iraq and Egypt.

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World

China’s COVID cases overwhelm hospitals

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BEIJING, Dec 26 (Reuters) – In more than three decades of emergency medicine, Beijing-based doctor Howard Bernstein said, he has never seen anything like this.

Patients are arriving at his hospital in ever-increasing numbers; almost all are elderly and many are very unwell with COVID and pneumonia symptoms, he said.

Bernstein’s account reflects similar testimony from medical staff across China who are scrambling to cope after China’s abrupt U-turn on its previously strict COVID policies this month was followed by a nationwide wave of infections.

It is by far the country’s biggest outbreak since the pandemic began in the central city of Wuhan three years ago. Beijing government hospitals and crematoriums also have been struggling this month amid heavy demand.

“The hospital is just overwhelmed from top to bottom,” Bernstein told Reuters at the end of a “stressful” shift at the privately owned Beijing United Family Hospital in the east of the capital.

“The ICU is full,” as are the emergency department, the fever clinic and other wards, he said.

“A lot of them got admitted to the hospital. They’re not getting better in a day or two, so there’s no flow, and therefore people keep coming to the ER, but they can’t go upstairs into hospital rooms,” he said. “They’re stuck in the ER for days.”

In the past month, Bernstein went from never having treated a COVID patient to seeing dozens a day.

“The biggest challenge, honestly, is I think we were just unprepared for this,” he said.

Sonia Jutard-Bourreau, 48, chief medical officer at the private Raffles Hospital in Beijing, said patient numbers are five to six times their normal levels, and patients’ average age has shot up by about 40 years to over 70 in the space of a week.

“It’s always the same profile,” she said. “That is most of the patients have not been vaccinated.”

The patients and their relatives visit Raffles because local hospitals are “overwhelmed”, she said, and because they wish to buy Paxlovid, the Pfizer-made COVID treatment, which many places, including Raffles, are running low on.

“They want the medicine like a replacement of the vaccine, but the medicine does not replace the vaccine,” Jutard-Bourreau said, adding that there are strict criteria for when her team can prescribe it.

An employee works at the production line of a fever medicine at a Guizhou Bailing plant amid the coronavirus disease (COVID-19) outbreak, in Anshun, Guizhou province, December 24, 2022. cnsphoto via REUTERS

Jutard-Bourreau, who like Bernstein has been working in China for around a decade, fears that the worst of this wave in Beijing has not arrived yet.

Elsewhere in China, medical staff told Reuters that resources are already stretched to the breaking point in some cases, as COVID and sickness levels amongst staff have been particularly high.

One nurse based in the western city of Xian said 45 of 51 nurses in her department and all staff in the emergency department have caught the virus in recent weeks.

“There are so many positive cases among my colleagues,” said the 22-year-old nurse, surnamed Wang. “Almost all the doctors are down with it.”

Wang and nurses at other hospitals said they had been told to report for duty even if they test positive and have a mild fever.

Jiang, a 29-year-old nurse on a psychiatric ward at a hospital in Hubei province, said staff attendance has been down more than 50 percent on her ward, which has stopped accepting new patients. She said she is working shifts of more than 16 hours with insufficient support.

“I worry that if the patient appears to be agitated, you have to restrain them, but you cannot easily do it alone,” she said. “It’s not a great situation to be in.”

MORTALITY RATE “POLITICAL”

The doctors who spoke to Reuters said they were most worried about the elderly, tens of thousands of whom may die, according to estimates from experts.

More than 5,000 people are probably dying each day from COVID-19 in China, Britain-based health data firm Airfinity estimated, offering a dramatic contrast to official data from Beijing on the country’s current outbreak.

The National Health Commission did not immediately respond to a Reuters request for comment on the concerns raised by medical staff in this article.

China reported no COVID deaths on the mainland for the six days through Sunday, the Chinese Center for Disease Control and Prevention said on Sunday, even as crematories faced surging demand.

China has narrowed its definition for classifying deaths as COVID-related, counting only those involving COVID-caused pneumonia or respiratory failure, raising eyebrows among world health experts.

“It’s not medicine, it’s politics,” said Jutard-Bourreau. “If they’re dying now with COVID it’s because of COVID. The mortality rate now it’s political numbers, not medical.”

Additional reporting by the Beijing Newsroom. Editing by Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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World

First foreign COVID vaccines head to China from Germany

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  • Batch of BioNTech shots on the way to China
  • German citizens will get shot; Berlin pushes for wider use
  • Shipment comes after Scholz visit to China last month
  • Comes as infections spike in world’s No. 2 economy

BERLIN, Dec 21 (Reuters) – Berlin has sent its first batch of BioNTech (22UAy.DE) COVID-19 vaccines to China to be administered initially to German expatriates, a German government spokesperson said on Wednesday, the first foreign coronavirus vaccine to be delivered to the country.

No details were available on the timing and size of the delivery, although the spokesperson said Berlin is pushing for foreigners other than German nationals, estimated at about 20,000, to be allowed access to the shot if they want it.

The shipment comes after China agreed to allow German nationals in China to get the shot following a deal during Chancellor Olaf Scholz’s visit in Beijing last month, with the German leader pressing for Beijing to allow the shot to be made freely available to Chinese citizens as well.

In a letter to be sent to German citizens in mainland China, the government said it would offer basic immunisations and booster shots of vaccines approved for use in the European Union for free to anyone over 12 years of age.

Family members of other nationalities would not be included. Vaccinations for children under 12 may follow at a later date.

“We are working on the possibility that besides Germans also other foreigners can be vaccinated with BioNTech,” the spokesperson told journalists in Berlin.

The shots will be delivered to German companies in China as well as embassy locations and talks are underway with other EU governments about getting them to citizens of other nationalities, a source familiar with the situation said.

China would need to approve expanding access beyond German nationals, the source said.

In return, Chinese citizens in Europe can be vaccinated with China’s SinoVac (SVA.O), the spokesperson said.

The comment comes after a report earlier this month that Germany’s health ministry had granted a permit allowing China’s Sinovac COVID-19 vaccine to be imported to Germany to be given to Chinese citizens in that country.

The shot has not been approved for use by Europe’s drug regulator, but the World Health Organization has given its green light for its use.

Beijing has so far insisted on using only domestically produced vaccines, which are not based on the Western mRNA technology but on more traditional technologies.

The shipment comes amid Beijing dismantling its strict “zero-COVID” regime of lockdowns, which has led to a surge of cases that caught a fragile health system unprepared.

Experts predict that the country of 1.4 billion people could face more than a million COVID deaths next year.

Allowing German expats access to a Western shot is a big gesture to Berlin, reflecting Beijing’s effort to strengthen ties with EU’s biggest economy after years of tensions over trade and climate between the two countries.

Shares in BioNTech rose on news of the shipment, closing 2.3% higher in Frankfurt while Pfizer shares in New York were up 1.25% in late morning New York trade.

BioNTech was not immediately available to comment on the situation on Wednesday.

China is stuck between rising Covid-19 cases and stalled vaccination rates

NO WESTERN SHOTS

China has nine domestically developed COVID vaccines approved for use, more than any other country. But none has been updated to target the highly infectious Omicron variant, as Pfizer-BioNTech and Moderna (MRNA.O) have for boosters in many developed countries.

The two shots developed by Pfizer-BioNTech and Moderna are the most widely used around the world.

Early on in the pandemic, BioNTech struck a deal with Shanghai Fosun Pharmaceutical (600196.SS) with a view to supply the shots to greater China.

While the shots became available in Hong Kong, Macau and Taiwan, the regulatory review for mainland China has not been concluded. BioNTech has said that decision was up to Chinese regulators and has not given a reason for the delay.

China’s zero-COVID policy and lockdown measures have kept death and infection rates minimal over the past months but caused massive disruptions both domestically and in global trade and supply chains.

China uses a narrow definition of COVID deaths and reported no new fatalities for Tuesday, even crossing one off its overall tally since the pandemic began, now at 5,241 – a fraction of the tolls of many much less populous countries.

The National Health Commission said on Tuesday only deaths caused by pneumonia and respiratory failure in patients who had the virus are classified as COVID deaths.

Reporting by Thomas Escritt, Alexander Ratz and Christian Kraemer; additional reporting by Danilo Masoni in Milan and Amanda Cooper in London;
Writing by Miranda Murray;
Editing by Josephine Mason and David Evans

Our Standards: The Thomson Reuters Trust Principles.

Thomas Escritt

Thomson Reuters

Berlin correspondent who has investigated anti-vaxxers and COVID treatment practices, reported on refugee camps and covered warlords’ trials in The Hague. Earlier, he covered Eastern Europe for the Financial Times. He speaks Hungarian, German, French and Dutch.

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