Philly pharma company, in layoffs, feels the pain of competition

Even as public awareness about addictions to opioid painkillers continues to grow, a Philadelphia pharmaceutical company that makes an alternative pain medicine is shedding employees and laid off at least 30 earlier this month.

As painful as the layoffs are to the people who lost their jobs at Iroko Pharmaceuticals LLC, the company faces a common problem in the industry, said a University of Pennsylvania School of Medicine professor who specializes in pain medicine.

When people are in pain, they want a strong medicine, and they believe prescription opioids are stronger than the kind of painkillers sold by Iroko, said Jeanmarie Perrone, director of medical toxicology at Penn.

"Those of us who are pro-pain management, but not pro-opioid, believe nonsteroidal anti-inflammatory drugs work tremendously well and are undervalued," Perrone said.  Traditional NSAIDS, as they are known, include over-the-counter products such as Advil and Aleve.

Perrone said that studies had shown NSAIDS often work just as well to alleviate pain, but that, psychologically, patients want to bring out the heavy opioid artillery when they are suffering.

Iroko, based at the Navy Yard, makes Vivlodex, Tivorbex, Zorvolex, and Indocin, all prescription NSAIDS. Iroko uses a licensed technology to reduce the particle size of existing NSAID pain medications so they dissolve faster and are effective at lower doses, the company said. The Food and Drug Administration advocates lower doses, where possible.

In February, when Iroko announced that Vivlodex was available by prescription, approved to treat osteoarthritis pain in 5-milligram and 10-milligram doses, Iroko employed 160, the company said. By September, before the layoffs, the number had dropped to 120 to 130, its chairman, Osagie Imasogie, said Tuesday. About 30 corporate and administrative people have been laid off, he said. Most of the layoffs occurred Sept. 13, after weeks of rumors within the company.

"On the flip side, we are hiring another 90 people to add to the sales force. There are some cards — and it's very painful — that we had to drop in order to pick up some that would be more aligned with our more immediate revenue drivers," Imasogie said.

Iroko's layoffs come at a time when insurers and other medical service providers have become increasingly cost-conscious, he said. In many cases, consumers and health providers are choosing generics over prescription drugs.

"Is there pressure on price? Of course there is," Imasogie said. As prices per item are forced down, Iroko and other pharmaceutical companies need to sell a larger quantity to protect the bottom line.

"Every company has had to [lower prices] to get sales traction," he said. "That is what has led to us increasing the employees on the sales side. You have to send out more reps."

Perrone said Iroko probably is "making a business decision to get their product to market [rather] than fighting the opioid battle."

Not only would Iroko be facing stiff competition from prescription generics, she said, but also from nonprescription pain medicine. Customers seeking short-term pain relief may simply double up on doses of over-the-counter products.

Each method of fighting pain has its disadvantages. NSAIDS can, as a side effect and in higher doses, irritate the stomach and cause damage to the kidneys and heart muscles. Imasogie said Iroko technology that breaks the medicine into smaller particles allows lower doses to be used.

Opioid painkillers carry the threat of addiction. "America is a fascinating country," said Imasogie, who grew up and graduated from college in Nigeria before gaining his law degree from the University of Pennsylvania. "We represent roughly 5 percent of the world's population, and we consume almost 80 percent of the legal opioids in the world.

"So," he said, "either we as Americans have a different sense of pain than everyone else, or we just like opioids."