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Under pressure over rising drug prices, pharmaceutical companies are pushing a new defense: They’re not raising the prices to make money but rather to pay a cut to middlemen in the medicine-supply chain. For years, drugmakers justified price increases by saying they needed to fund research and development of their products. But lately they have flipped the script. They say they don’t actually benefit much from list-price increases and their net prices are suffering, because they’re paying bigger rebates to pharmacy-benefit managers that negotiate prices in secret. (Hopkins and Loftus, 2/5)

Pfizer said on Jan. 29 it expects 2019 adjusted earnings per share to be between $2.82 and $2.92, about 4 percent less on the high-end from the Wall Street analyst estimate. Various reasons were offered, including the arrival of generic versions of its blockbuster Lyrica and foreign exchange rates. But the loss of the ability to boost earnings through annual price increases, which has benefitted drug companies for years, was an undeniable factor. Pfizer shares are down 2.8 percent this year. (Herper, 2/5)

U.S. drugmaker Merck & Co Inc said on Tuesday that its Chief Executive Ken Frazier plans to testify at a Senate hearing later this month examining rising prescription drug prices. Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, and Democratic Senator Ron Wyden, ranking member of the committee, on Monday invited executives from seven pharmaceutical companies, including Merck, to testify. The others are AbbVie Inc, AstraZeneca Plc , Bristol-Myers Squibb Co, Johnson & Johnson, Pfizer Inc and Sanofi SA. (Erman and Abutaleb, 2/5)

A Chicago pharmaceutical company that grabbed national attention for raising the price of its skin medications has filed for bankruptcy. Novum Pharma filed for Chapter 11 in U.S. Bankruptcy Court in Delaware on Sunday, saying in the filing that it has “faced a series of financial and operational difficulties” since buying drugs from Primus Pharmaceuticals in 2015. (Schencker, 2/5)

Once again, a big hedge fund is trying to convince the Allergan (AGN) board to split the roles of chairman and chief executive into separate positions and address “chronic underperformance.” In a brief but pointed letter, Appaloosa Management criticized the board for ignoring the same request last spring and contended its refusal makes the company an “outlier.” (Silverman, 2/5)

A Chicago pharmaceutical company that grabbed national attention for the price of its skin medications has filed for bankruptcy. Novum Pharma filed for Chapter 11 in U.S. Bankruptcy Court in Delaware on Sunday, saying in the filing that it has “faced a series of financial and operational difficulties” since buying drugs from Primus Pharmaceuticals in 2015. (Schencker, 2/5)

GlaxoSmithKline bolstered its cancer drug development pipeline on Tuesday, agreeing to pay up to 3.7 billion euros ($4.2 billion) to Germany's Merck KGaA for the rights to a next-generation immunotherapy. Merck will receive an upfront payment of 300 million euros for the drug - known as M7824, or bintrafusp alfa - and is eligible for potential payments of up to 500 million euros depending on development milestones in lung cancer, the two companies said in statements on Tuesday. (2/5)

A new venture to supply generic medicines says it will start with a blood-pressure drug that has been hard to get. ProvideGx, the new generic-drug venture, will begin supplying metoprolol in the middle of this month, according to executives at Premier Inc., which unveiled the subsidiary last month. The venture’s supplies of the injectable drug will be made by drugmaker Baxter International Inc. (Evans, 2/4)

Amicus Therapeutics (FOLD) said Tuesday that its drug for Pompe disease appeared to benefit patients with the disease in a small trial, a modest but noteworthy milestone ahead of what will be a pivotal trial. “This is an important next step on what’s almost a 20-year journey,” said Amicus CEO John Crowley. Pompe disease is caused by an enzyme deficiency that leads to glycogen buildup and ultimately muscle and respiratory damage. (Herper, 2/5)

It has been a turbulent few months for biotech startups trying to list their shares on the public markets. First, a profligate 2018 turned sour for initial public offerings, with the average debutant down more than 20 percent by year’s end. Then, the record-setting federal shutdown forced a dozen or so would-be success stories to sit on their hands as market regulators stayed at home and unpaid. Now, with the government back open, biotech has its Punxsutawney Phil in the form of Alector, a 6-year-old company hoping to convince the world that its novel approach to Alzheimer’s disease is worth a $1.4 billion valuation. (Garde, 2/6)

Neil Macdougall has had Type 1 diabetes almost as long as he can remember. He wears a pump on his hip, the size of a mobile phone, that drips insulin into his body. It’s as precious and necessary to him as air. Macdougall says he stays on top of his condition. But he’s worried about what happens after Brexit. Nearly all the insulin in Britain is imported, the bulk of it from Denmark. If Britain crashes out of the European Union in March without a deal for how to manage the withdrawal, drugs that keep him alive could suddenly be hard to get. Without insulin, Macdougall figures, he’d be dead in 48 hours. (Adam and Booth, 2/6)

Canadian pharmaceutical industry lobby groups, in an effort to head off a planned crackdown on prescription drug prices, offered to give up C$8.6 billion ($6.6 billion) in revenue over 10 years, freeze prices or reduce the cost of treating rare diseases, according to interviews and documents seen by Reuters. Those industry offers did not impress federal officials, coming last year as Canada prepared to expand the powers of a little-known federal watchdog called the Patented Medicine Prices Review Board (PMPRB) to reduce the cost of prescription drugs. (2/6)