Drug Makers Challenge Pill Disposal Law in California

Brand name drug makers and their generic counterparts rarely find themselves on the same side of an issue, but now they are making an exception. They have teamed up to fight a local law in California, the first in the nation, that makes them responsible for running — and paying for — a program that would allow consumers to turn in unused medicines for proper disposal.

Such so-called drug take-back programs are gaining in popularity because of a growing realization that those leftover pills in your medicine cabinet are a potential threat to public health and the environment.

Small children might accidentally swallow them and teenagers will experiment with them, advocates of the laws say. Prescription drug abusers can, and are, breaking into homes in search of them. Unused pills are sometimes flushed down the toilet, so pharmaceuticals are now polluting waterways and even drinking water. One study found the antidepressant Prozac in the brains of fish.

Most such take-back programs are run by local or other government agencies. But increasingly there are calls to make the pharmaceutical industry pay.

“We feel the industry that profits from the sales of these products should have the financial responsibility for proper management and disposal,” said Miriam Gordon, California director of Clean Water Action, an advocacy group.

In July, Alameda County, Calif., which includes Oakland and Berkeley, became the first locality to enact such a requirement. Drug companies have to submit plans for accomplishing it by July 1, 2013.

But the industry plans to file a lawsuit in United States District Court in Oakland on Friday, hoping to have the law struck down. The suit is being filed by the Pharmaceutical Research and Manufacturers of America, or PhRMA, which represents brand-name drug companies, the Generic Pharmaceutical Association and the Biotechnology Industry Organization.

James M. Spears, general counsel of PhRMA, said the Alameda ordinance violated the Constitution in that a local government was interfering with interstate commerce, a right reserved for Congress.

“They are telling a company in New Jersey that you have to come in and design and implement and pay for a municipal service in California,” he said in an interview.

“This program is one where the cost is shifted to companies and individuals who are not located in Alameda County and who won’t be served by it.”

Mr. Spears, who is known as Mit, said that the program would cost millions of dollars a year to run and that pharmaceutical companies were “not in the waste disposal business.” He said it would be best left to sanitation departments and law enforcement agencies, which must be involved if narcotics, like pain pills, were to be transported.

Nathan A. Miley, the president of the Alameda County Board of Supervisors and the champion of the legislation, said late Thursday, “It’s just unfortunate that PhRMA would fight this because it would be pennies for them.”

“We will win legally and will win in the court of public opinion as well,” Mr. Miley said.

The battle in Alameda could set the direction for other states and localities. Legislators in seven states have introduced bills to require drug companies to pay for take-back programs in the last few years, said Scott Cassel, founder and chief executive of the Product Stewardship Institute, a nonprofit group that advocates such programs. But none of the bills have passed.

Mr. Cassel said about 70 similar “extended producer responsibility” laws have been enacted in 32 states for other products, like electronic devices, mercury-containing thermometers, fluorescent lamps, paint and batteries. He said he was not aware that any had been struck down on constitutional grounds.

The pharmaceutical industry already pays for take-back programs in some other countries. The law in Alameda is modeled partly on the system in British Columbia and two other Canadian provinces. There, the industry formed the Post-Consumer Pharmaceutical Stewardship Association, which runs the programs.

Consumers can take unused drugs back to pharmacies, from which they are periodically collected. Drug companies pay for the program in proportion to their market share, said Ginette Vanasse, executive director of the association. The program for British Columbia, with a population over four million, costs about $500,000 a year, she said.

The extent of the problem of unused pills and how best to handle them are matters of debate.

The United States Geological Survey has found various drugs, including antidepressants, antibiotics, heart medicines and hormones, in waterways it has sampled. Sewage treatment plants and drinking water treatment plants are not meant to remove pharmaceuticals.

Still, it is not known what effect the chemicals might have. “It’s a hard-to-pin-down problem,” said Sonya Lunder, a senior analyst at the Environmental Working Group, an advocacy group. It is thought that trace amounts in drinking water are probably not harmful. But larger amounts found in wastewater could be having an impact on wildlife.

It is also unclear whether take-back programs will help. Experts generally agree that the bigger source of pollution is urine and feces containing the remnants of drugs that are ingested, not the unused pills flushed down the toilet.

PhRMA also argues that take-back programs will not help much with the problem of drug abuse either. Mr. Spears said that it was better to have consumers tie up unused pills in a plastic bag and throw them in the trash. That is more effective, he said, because people would not have to travel to a collection point. Such collection points could become targets for thieves and drug abusers.

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Appeals court puts 1st Amendment over public health

The Food, Drug and Cosmetic Act makes it illegal to sell a prescription drug for any purpose other than what's listed on the label.

Nevertheless, a divided federal appeals court this week tossed out the conviction of a former drug sales rep who was recorded pitching a doctor on other uses of a medicine approved by regulators solely to treat the sleep disorder narcolepsy.

And here's the kicker: The court ruled that the sales rep had a free-speech right to promote the drug's unapproved uses.

I'm as big a fan of the 1st Amendment as anyone, but this decision strikes me as fundamentally flawed.

We're not talking about a right to express yourself. We're talking about selling stuff — stuff that could harm or even kill you if used improperly.

Moreover, it would seem that a serious blow has been dealt to the Food and Drug Administration's power to ensure the safety of prescription meds. The drug industry can now pitch any use for its products, regardless of what regulators say.

"This is a complete disgrace," said Steven Miles, a professor of medicine and bioethics at the University of Minnesota. "What this basically does is destroy drug regulation in the United States."

Felicia Cohn, director of medical bioethics for Kaiser Permanente Orange County, was more circumspect. But only slightly so.

"This completely undermines the FDA's authority over how drugs are marketed," she said. "I can't imagine that the marketing folks in the drug industry won't seize upon this as an excuse to sell almost all drugs beyond their approved usage."

The case before the U.S. 2nd Circuit Court of Appeals in Manhattan this week began in 2005 when Alfred Caronia, a former sales rep for Orphan Medical, later acquired by Jazz Pharmaceutical, was targeted in a federal investigation into questionable drug-industry sales practices.

He was recorded telling a doctor that the narcolepsy drug Xyrem could also be used to treat insomnia, fibromyalgia and other conditions, even though the FDA hadn't approved such uses. Caronia was convicted by a jury in 2008.

In his appeal of the verdict, Caronia argued that the 1st Amendment gave him the right to discuss so-called off-label drug uses, and the court agreed.

"The government clearly prosecuted Caronia for his words — for his speech," the majority wrote in the 2-to-1 decision. It concluded that "the government cannot prosecute pharmaceutical manufacturers and their representatives" under the Food, Drug and Cosmetic Act for speech promoting off-label drug uses.

Judge Debra Ann Livingston, the sole dissenter on the panel, countered that by overturning Caronia's conviction, "the majority calls into question the very foundations of our century-old system of drug regulation."

The government is expected to challenge the ruling, either before the full appellate court or at the U.S. Supreme Court. The high court already has determined that unlimited political donations can be made in the name of free speech.

R. Alta Charo, a professor of law and bioethics at the University of Wisconsin, explained it to me like this:

Let's say a drug company came up with a medicine that the FDA approved for controlling a patient's blood pressure. But later on, the company discovered that the medicine has an interesting side effect: It grows hair.

A cure for baldness, obviously, has blockbuster potential. But under the old rules, the drug company would have had to go back to the FDA and receive approval for the blood-pressure medicine to be marketed as a hair restorer.

Now, it wouldn't have to. It could claim a free-speech right to say whatever it wanted about the drug's usage.

The drug Viagra was originally intended to lower blood pressure and treat angina. It was only during testing that its maker, Pfizer, noticed that Viagra had an unexpected effect on another aspect of the male anatomy.

So Pfizer asked the FDA for permission to market its heart drug as a remedy for erectile dysfunction. The federal agency, in turn, gave Pfizer's research a good going over before giving its nod.

"What we're losing with this court decision is the safeguard of an independent arbiter," Charo said. "It's very problematic."

Alexander Capron, a professor of law and medicine at USC, called the ruling "enormously significant" and said it eliminates an important hurdle that drugs have had to clear before reaching the market.

"The danger to consumers is that a drug will be marketed without having the relative balance between efficacy and safety adequately addressed," he said.

Businesses and their conservative friends in Congress routinely argue that regulations get in the way of commerce and innovation and that the market should be left to work its magic.

The flip side of that pie-in-the-sky perspective is GlaxoSmithKline agreeing to pay $3 billion in July for promoting antidepressants and other drugs for unapproved uses. Or Johnson & Johnson agreeing in August to pay $181 million to settle cases over the questionable marketing of an antipsychotic drug.

FDA rules are there for a reason, and that reason is to protect public health.

Drug companies have everything to gain by being able to sidestep regulatory oversight. The rest of us gain nothing.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send tips or feedback to david.lazarus@latimes.com.

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Obama resolute in showdown with GOP over 'fiscal cliff'

WASHINGTON — President Obama brushed off the latest Republican gambit to gain leverage in averting the so-called fiscal cliff, bluntly telling business chief executives in a speech Wednesday, "I'm not going to play that game."

That flash of swagger reflects growing White House confidence about its position in the year-end showdown over scheduled spending cuts and tax increases. With less than a month to act and the wind of an electoral victory at their back, White House officials think they are boxing in Republicans.

The White House credits its strategy crafted from painful lessons of past go-rounds with the Republican-led House. Rather than engaging intensely with the GOP leadership in high-profile meetings, Obama has sought to isolate Republicans and pump up the pressure from all sides. He has picked a red line and is sticking to it. And now he's waiting.

"The only time these guys have ever moved on something is when they have felt the outside pressure," said an Obama advisor who requested anonymity to discuss strategy.

Both sides say they are working to defuse the scheme of tax increases and budget cuts they enacted to force themselves to reach a larger deficit reduction deal. Experts say that if nothing is done, the double blow could send the economy back into recession.

For now, though, the president has reason to be resolute, even as Republicans call on him to counter their latest offer.

Treasury Secretary Timothy F. Geithner underscored that position Wednesday in an interview on CNBC. The administration is "absolutely" ready to go over the "fiscal cliff" if Republicans refuse to raise tax rates on the wealthy, he said.

"There's no prospect in an agreement that doesn't involve those rates going up on the top 2% of the wealthiest Americans," he said.

Public polling shows a majority of Americans not only support the president's push to allow tax rates to rise on top earners but are prepared to hold the GOP responsible if negotiations fail. A new poll from the Washington Post and Pew Research Center found that 53% of Americans said Republicans should be blamed if there is no deal, compared with 27% who would blame the president.

Obama's stance has bred discord and frustration among Republicans on Capitol Hill who find themselves in the politically awkward position of threatening a tax increase for all to preserve lower taxes for the wealthy. Tension bubbled up this week as Republicans floated a new strategy that would involve reviving a threat to let the U.S. default on its debt payments.

Under that scenario, Republicans would agree to raise taxes on the wealthiest 2% of taxpayers, as the president has demanded, but would defer talks about a larger deficit reduction package until the new year, when Obama would need their votes to avoid a federal default on the debt. Republicans could then demand concessions on the federal budget in return for voting to raise the nation's debt limit.

"The debt ceiling is hanging out there, and the debt ceiling is the next point of leverage," said Rep. Steve King, a conservative Republican from Iowa. "The president does not fear the fiscal cliff. He's concerned about who's going to get the blame. But he doesn't fear the cliff."

A spokesman for House Speaker John A. Boehner (R-Ohio) also suggested that Republicans would try to extract spending cuts in return for a debt limit increase. "We agree there is no reason for drama surrounding a debt limit increase. All that is required is the president getting serious about spending cuts," said Boehner spokesman Brendan Buck.

In his CNBC interview, Geithner said the administration would insist that any agreement include an increase in the debt ceiling.

Obama and Boehner spoke on the phone Wednesday. Neither side disclosed details of the call.

Obama's strategy involves risks. His repeated attempts to bludgeon Republicans on taxes while offering no new concessions has engendered little goodwill, and he will need some Republican votes soon.

And his declaration that he won't play chicken with the vote to raise the debt ceiling? Though that is the tough talk that some Democrats have craved, it has little practical meaning. Unless Republicans agree to his request to largely cede authority to raise the limit, he will need Congress to do it.

For Obama, the lesson on how to gain and use leverage began with the summer of 2011, when a marathon of high-level bargaining sessions with Republicans failed to produce a grand bargain on the federal budget.

After that, Obama set out to negotiate on the campaign trail, announcing his terms publicly as he rallied people behind them.

The Obama team added social media campaigns and testimonials from middle-class Americans, and managed to pass an extension of the payroll tax break in February. That's when aides came to believe the president could shift the dynamic in talks with Capitol Hill.

Early signs are that the formula may be working again. The latest Twitter campaign has elicited more than 100,000 emails from people explaining how the middle-class tax increase would affect them.

And Obama's outreach to interested parties is showing progress. Business leaders are worrying openly about the uncertainty around the fiscal cliff and debt ceiling.

At the Business Roundtable on Wednesday, Boeing's chief executive introduced Obama by suggesting that business leaders could "serve a useful purpose in the dialogue."

To be sure, there's grousing about Obama's negotiating posture. Sen. Mitch McConnell (R-Ky.), the chamber's Republican leader, has complained that Obama is campaigning rather than working out the issues with his negotiating partners.

But the strategy is worth the aggravation, administration officials think. The president isn't avoiding private negotiations, but doesn't plan to start them until there is some movement.

"Once Republicans acknowledge that rates are going up for top earners," White House Press Secretary Jay Carney said, "we believe that an agreement is very achievable."

christi.parsons@latimes.com

kathleen.hennessey@latimes.com

Melanie Mason, Michael A. Memoli and Lisa Mascaro in the Washington bureau contributed to this report.

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U.S. agency backs Apple in essential patent battle

WASHINGTON (Reuters) – Google unit Motorola Mobility is not entitled to ask a court to stop the sale of Apple iPhones and iPads that it says infringe on a patent that is essential to wireless technology, the U.S. Federal Trade Commission said on Wednesday.

In June, Judge Richard Posner in Chicago threw out cases that Motorola, now owned by Google, and Apple had filed against each other claiming patent infringement. Both companies appealed.

In rejecting the Google case, Posner barred the company from seeking to stop iPhone sales because the patent in question was a standard essential patent.

This means that Motorola Mobility had pledged to license it on fair and reasonable terms to other companies in exchange for having the technology adopted as a wireless industry standard.

Standard essential patents, or SEPs, are treated differently because they are critical to ensuring that devices made by different companies work together.

Google appealed to the U.S. Court of Appeals for the Federal Circuit. The FTC said in its court filing that Posner had ruled correctly.

The commission, which has previously argued against courts banning products because they infringe essential patents, reiterated that position on Wednesday.

“Patent hold-up risks harming competition, innovation, and consumers because it allows a patentee to be rewarded not based on the competitive value of its technology, but based on the infringer’s costs to switch to a non-infringing alternative when an injunction is issued,” the commission wrote in its brief.

The case is Apple Inc. and NeXT Software Inc. V. Motorola Inc. and Motorola Mobility Inc., in the U.S. Court of Appeals for the Federal Circuit, no. 2012-1548, 2012-1549.

(Reporting By Diane Bartz)

Tech News Headlines – Yahoo! News

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Michael Strahan makes his Broadway debut in 'Elf'

NEW YORK (AP) — Michael Strahan has tackled something few football stars have attempted — Broadway.

The gap-toothed co-host of "Live with Kelly and Michael" made three short appearances at Wednesday's matinee of "Elf" and said he has new respect for Broadway performers.

"I was surprised at how nervous you get and the adrenaline and that feedback from the audience — it really was an amazing thing," the former football player said after the show. "To see these performers who do it every day — eight or nine times a week — is really amazing. I take my hat off to them."

Fans can see a behind-the-scenes recap on Thursday's TV show.

The musical is adapted from the Will Ferrell film from 2003 about Buddy, a human raised in the North Pole who travels to New York in search of his parents.

Strahan thought making his Broadway debut would be fun and represented a new experience for a guy who holds the single season sack record. He found himself more nervous than he has been for high-stakes football games or live TV.

"It's a little nerve-wracking because so many people depend on you, you want to get your line across and you have to play to the crowd. It's a lot more intricate with everyone hitting their marks. You don't want to be the guy that messes everyone up," he said.

Strahan, 41, played both a police officer and a Salvation Army Santa in the first act and later came on as himself in a scene with the real Santa in the second act. As he waited in the wings of the Al Hirschfeld Theatre, he saw the toll the musical takes on its dancers.

"Some of these performers are breathing as if they just went into a football game and played a 12-play drive," he joked. "I was tired walking up and down from my dressing room."

Strahan rehearsed for an hour in the morning with stage managers and associate director Casey Hushion. At 1 p.m., some in the cast came in early to work with him, including Jordan Gelber, who plays Buddy, and Beth Leavel, who plays Buddy's stepmother.

The audience was quiet when Strahan first appeared as an officer with another cop after Buddy gets kicked out of Macy's. But the seven-time Pro-Bowler and Super Bowl winner flashed his trademark smile and they went wild. More applause greeted him after he played a Salvation Army Santa as he and Buddy wrestled over the kettle bells.

In the second act, he waited to ask Santa for a present. Santa asked him his name, the newly minted actor said "Michael Strahan" and he then asked for a red Schwinn bicycle with a bell shaped like Miss Piggy. The crowd cheered when Strahan identified himself and he got another wide round of applause at the curtain call, where the cast gave him flowers.

Strahan was named in September as Kelly Ripa's permanent co-host aboard the morning show "Live with Kelly and Michael." A former defensive star who spent 15 years in the NFL, he is also a host of "Fox NFL Sunday."

He follows in the footsteps of Joe Namath, a quarterback nicknamed "Broadway Joe" who made an appearance on Broadway in 1983 as a replacement in a revival of "The Caine Mutiny Court-Martial."

Strahan would not rule out a return to the stage. "I will take it off my bucket list, but if the opportunity came across again, I might just take it up and do it again," he said. "I had a great time."

___

Online:

http://www.elfmusical.com

http://dadt.com/live

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Extended Use of Breast Cancer Drug Suggested

The widely prescribed drug tamoxifen already plays a major role in reducing the risk of death from breast cancer. But a new study suggests that women should be taking the drug for twice as long as is now customary, a finding that could upend the standard that has been in place for about 15 years.

In the study, patients who continued taking tamoxifen for 10 years were less likely to have the cancer come back or to die from the disease than women who took the drug for only five years, the current standard of care.

“Certainly, the advice to stop in five years should not stand,” said Prof. Richard Peto, a medical statistician at Oxford University and senior author of the study, which was published in The Lancet on Wednesday and presented at the San Antonio Breast Cancer Symposium.

Breast cancer specialists not involved in the study said the results could have the biggest impact on premenopausal women, who account for a fifth to a quarter of new breast cancer cases. Postmenopausal women tend to take different drugs, but some experts said the results suggest that those drugs might be taken for a longer duration as well.

“We’ve been waiting for this result,” said Dr. Robert W. Carlson, a professor of medicine at Stanford University. “I think it is especially practice-changing in premenopausal women because the results do favor a 10-year regimen.”

Dr. Eric P. Winer, chief of women’s cancers at the Dana-Farber Cancer Institute in Boston, said that even women who completed their five years of tamoxifen months or years ago might consider starting on the drug again.

Tamoxifen blocks the effect of the hormone estrogen, which fuels tumor growth in estrogen receptor-positive cancers that account for about 65 percent of cases in premenopausal women. Some small studies in the 1990s suggested that there was no benefit to using tamoxifen longer than five years, so that has been the standard.

About 227,000 cases of breast cancer are diagnosed each year in the United States, and an estimated 30,000 of them are in premenopausal women with estrogen receptor-positive cancer and prime candidates for tamoxifen. But postmenopausal women also take tamoxifen if they cannot tolerate the alternative drugs, known as aromatase inhibitors.

The new study, known as Atlas, included nearly 7,000 women with ER-positive disease who had completed five years of tamoxifen. They came from about three dozen countries. Half were chosen at random to take the drug another five years, while the others were told to stop.

In the group assigned to take tamoxifen for 10 years, 21.4 percent had a recurrence of breast cancer in the ensuing 10 years, meaning the period 5 to 14 years after their diagnoses. The recurrence rate for those who took only five years of tamoxifen was 25.1 percent.

About 12.2 percent of those in the 10-year treatment group died from breast cancer, compared with 15 percent for those in the control group.

There was virtually no difference in death and recurrence between the two groups during the five years of extra tamoxifen. The difference came in later years, suggesting that tamoxifen has a carry-over effect that lasts long after women stop taking it.

Whether these differences are big enough to cause women to take the drug for twice as long remains to be seen.

“The treatment effect is real, but it’s modest,” said Dr. Paul E. Goss, director of breast cancer research at the Massachusetts General Hospital.

Tamoxifen has side effects, including endometrial cancer, blood clots and hot flashes, which cause many women to stop taking the drug. In the Atlas trial, it appears that roughly 40 percent of the patients assigned to take tamoxifen for the additional five years stopped prematurely.

Some 3.1 percent of those taking the extra five years of tamoxifen got endometrial cancer versus 1.6 percent in the control group. However, only 0.6 percent of those in the longer treatment group died from endometrial cancer or pulmonary blood clots, compared with 0.4 percent in the control group.

“Over all, the benefits of extended tamoxifen seemed to outweigh the risks substantially,” Trevor J. Powles of the Cancer Center London, said in a commentary published by The Lancet.

Dr. Judy E. Garber, director of the Center for Cancer Genetics and Prevention at Dana-Farber, said many women have a love-hate relationship with hormone therapies.

“They don’t feel well on them, but it’s their safety net,” said Dr. Garber, who added that the news would be welcomed by many patients who would like to stay on the drug. “I have patients who agonize about this, people who are coming to the end of their tamoxifen.”

Emily Behrend, who is a few months from finishing her five years on tamoxifen, said she would definitely consider another five years. “If it can keep the cancer away, I’m all for it,” said Ms. Behrend, 39, a single mother in Tomball, Tex. She is taking the antidepressant Effexor to help control the night sweats and hot flashes caused by tamoxifen.

Cost is not considered a huge barrier to taking tamoxifen longer because the drug can be obtained for less than $200 a year.

The results, while answering one question, raise many new ones, including whether even more than 10 years of treatment would be better still.

Perhaps the most important question is what the results mean for postmenopausal women. Even many women who are premenopausal at the time of diagnosis will pass through menopause by the time they finish their first five years of tamoxifen, or will have been pushed into menopause by chemotherapy.

Postmenopausal patients tend to take aromatase inhibitors like anastrozole or letrozole, which are more effective than tamoxifen at preventing breast cancer recurrence, though they do not work for premenopausal women.

Mr. Peto said he thought the results of the Atlas study would “apply to endocrine therapy in general,” meaning that 10 years of an aromatase inhibitor would be better than five years. Other doctors were not so sure.

The Atlas study was paid for by various organizations including the United States Army, the British government and AstraZeneca, which makes the brand-name version of tamoxifen.

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Netflix buys exclusive rights to Disney movies

Netflix Inc. has acquired exclusive U.S. rights to movies from Walt Disney Studios in a deal that catapults the Internet video-on-demand service into direct competition with pay TV giants such as HBO and Showtime.

The three-year agreement takes effect in 2016 and is a blow to the pay channel Starz, which currently has the rights to broadcast Disney movies, including its Pixar animated films and Marvel superhero pictures, about eight months after they are released in theaters.

Starz's sole remaining movie provider is now Sony Pictures. That partnership ends in 2016.

VIDEO: Disney buys Lucasfilm - Mickey meet Darth Maul

Disney has also agreed to give Netflix nonexclusive streaming rights to more of its older titles — including "Dumbo," "Pocahontas" and "Alice in Wonderland" — starting immediately.

Netflix's chief content officer, Ted Sarandos, called the deal "a bold leap forward for Internet television."

"We are incredibly pleased and proud this iconic family brand is teaming with Netflix to make it happen," he said.

Netflix stock soared on the news, rising $10.65, or 14%, to $85.65.

Shares in Starz's parent company, Liberty Media Corp., fell $5.49, or 5%, to $105.56.

Currently, Netflix has nonexclusive rights to movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer via a deal with pay channel Epix, as well as an array of library titles from other studios. Its only exclusive movie rights come from independent studios such as Relativity Media and DreamWorks Animation. It also has a wide variety of television reruns.

Sarandos and Netflix Chief Executive Reed Hastings have long said the company wanted to get exclusive pay TV rights to films from one of Hollywood's six major studios to boost its online entertainment service.

PHOTOS: Disney without Pixar

However, Hastings has also at times downplayed the importance of new movies. Netflix previously had streaming rights to Disney and Sony movies via a deal with Starz. In January, investors expressed their concerns that the pending disappearance of those movies would hurt the service. Hastings said in a letter to investors that Disney films accounted for only 2% of domestic streaming and the loss would not be felt.

Since then, though, the Disney movie slate has become more attractive. At that time, Netflix did not have access to movies from Disney's Marvel superhero unit or the "Star Wars" titles from its pending acquisition of Lucasfilm Ltd.

The end of the Starz agreement accelerated a trend that has seen Netflix evolve into a television company, with reruns of shows such as "Mad Men" accounting for about two-thirds of the content streamed by users.

With several original programs launching next year, including the Kevin Spacey political drama "House of Cards," and a direct connection to a growing number of Internet-enabled televisions, Netflix is on the verge of standing on par with many TV networks.

Netflix charges $8 a month for its streaming service, while premium cable networks such as HBO cost $13 to $18 a month, and that's on top of a monthly bill for other channels that typically exceeds $50. It remains to be seen whether the addition of Disney products and more original programming could lead Netflix to increase its price.

PHOTOS: Hollywood back lot moments

The Netflix spending spree could continue, with Sarandos telling Bloomberg News on Monday that his company would bid for rights to Sony movies when its Starz deal expires.

Netflix might have a tougher time wresting away the rights to Warner Bros., 20th Century Fox or Universal Pictures releases from their current deals with HBO, which like Warner is part of Time Warner Inc. Paramount, Lionsgate and MGM are almost certain to stick with Epix, of which the trio are co-owners.

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Debut of repainted sign is Hollywood event

If there's anything Tinseltown excels at, it's turning a ho-hum event into a made-for-TV spectacle. Witness the fanfare that unfolds each time the Hollywood sign gets a fresh coat of paint.

It's not written off as routine maintenance. No, it's a civic event.

A media scrum gathers. Elected officials gush. Someone cracks jokes about face-lifts. (In 1995, nipped-and-tucked actress Phyllis Diller did the honors.)

PHOTOS: Hollywood sign history

So it was on Tuesday, when reporters were whisked to just below the nearly 90-year-old sign, one of the few landmarks in the crazy quilt of neighborhoods that is Los Angeles.

In a clearing, VIPs fidgeted on white folding chairs. At least a dozen cameras were trained on Chris Baumgart, chairman of the nonprofit Hollywood Sign Trust, who wore a dark suit and sneakers. Behind him loomed the nine 45-foot-tall letters that together, he said, cost about $175,000 to gussy up.

Beginning in October, workers stripped the letters of weathered paint, smeared them with 105 gallons of primer and coated them with 255 gallons of new paint (color: No. 7757, high-reflective white). It's made by Sherwin-Williams, which picked up most of the sign restoration bill.

Baumgart, a veritable encyclopedia of sign knowledge, joked with reporters that its face had been pancaked with two tons of makeup. "A lot was done to her backside, but we're leaving that secret," he said, tongue firmly in cheek.

When it was erected in 1923 with the aid of mule teams, the sign touted a high-end real estate development named Hollywoodland. Its creators expected to take it down after a year, according to the Hollywood Sign Trust, but tourists flocked to the hillside and its stunning view of Los Angeles. In the 1940s, the city folded the sign into Griffith Park and truncated it to hype, simply, "Hollywood."

Over the years, the sign has needed numerous touch-ups. In the 1970s, the termite-weakened O cartwheeled away from the rest of its kin and an L was set ablaze. A who's-who of Hollywood helped raise money to rebuild the sign completely, including Alice Cooper, Gene Autry and Hugh Hefner, who threw a fundraiser at the Playboy Mansion.

When the retooled landmark was unveiled in 1978 on live TV, the trust said, 60 million people watched. After that, it seemed, Los Angeles celebrated its every milestone with a dose of stagecraft.

In 1995, during the media event with Diller, black tarps fell to reveal gleaming letters. In 2005, Los Angeles Mayor Antonio Villaraigosa, in the words of the trust, "rappelled down the hillside and applied the final strokes of coating himself."

Tuesday's event was comparatively sedate. But as Baumgart fielded questions, a handful of people crept along the sign's base — cameramen shooting video of painters.

"They're supposed to be painting the last brush strokes on the sign," Baumgart said, "but it's for show."

He shrugged.

"Hey, it's Hollywood."

ashley.powers@latimes.com

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'Dr. Phil"s stolen classic Chevy recovered

BURBANK, Calif. (AP) — Los Angeles police say they've recovered a stolen 1957 Chevrolet Bel Air Convertible that belongs to talk-show host Phil McGraw.

Detective Jess Corral said Tuesday that investigators recovered McGraw's classic car, along with 13 others, after law enforcement began targeting auto theft rings.

McGraw is known as television's "Dr. Phil. His car was stolen from the RODZ shop in Burbank in August, and was found with minor damage.

The car is worth at least $80,000.

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Generic Drug Makers Facing Squeeze on Revenue

They call it the patent cliff.

Brand-name drug makers have feared it for years. And now the makers of generic drugs fear it, too.

This year, more than 40 brand-name drugs — valued at $35 billion in annual sales — lost their patent protection, meaning that generic companies were permitted to make their own lower-priced versions of well-known drugs like Plavix, Lexapro and Seroquel — and share in the profits that had exclusively belonged to the brands.

Next year, the value of drugs scheduled to lose their patents and be sold as generics is expected to decline by more than half, to about $17 billion, according to an analysis by Crédit Agricole Securities.“The patent cliff is over,” said Kim Vukhac, an analyst for Crédit Agricole. “That’s great for large pharma, but that also means the opportunities theoretically have dried up for generics.”

In response, many generic drug makers are scrambling to redefine themselves, whether by specializing in hard-to-make drugs, selling branded products or making large acquisitions. The large generics company Watson acquired a European competitor, Actavis, in October, vaulting it from the fifth- to the third-largest generic drug maker worldwide.

“They are certainly saying either I need to get bigger, or I need to get ‘specialer,’ ” said Michael Kleinrock, director of research development at the IMS Institute for Healthcare Informatics, a health industry research group. “They all want to be special.”

As one consequence of the approaching cliff, executives for generic drug companies say, they will no longer be able to rely as much on the lucrative six-month exclusivity periods that follow the patent expirations of many drugs. During those periods, companies that are the first to file an application with the Food and Drug Administration, successfully challenge a patent and show they can make the drug win the right to sell their version exclusively or with limited competition.

The exclusivity windows can give a quick jolt to companies. During the first nine months of 2012, sales of generic drugs increased by 19 percent over the same period in 2011, to $39.1 billion from $32.8 billion, according to Michael Faerm, an analyst for Credit Suisse. Sales of branded drugs, by contrast, fell 4 percent during the same period, to $174.2 billion from $181.3 billion.

But those exclusive periods also make generic drug makers vulnerable to the fickle cycle of patent expiration. “The only issue is it’s a bubble, too,” said Mr. Kleinrock. He said next year, the generic industry would enter a drought that was expected to last about two years.  Of the drugs that are becoming generic, fewer have exclusivity periods dedicated to a single drug maker.

In 2013, for example, the antidepressant Cymbalta, sold by Eli Lilly, is scheduled to be available in generic form. But more than five companies are expected to share in sales during the first six months, according to a report by Ms. Vukhac.

Heather Bresch, the chief executive of Mylan, the second-largest generics company in the United States, said Wall Street analysts were obsessed with the issue. “I can’t go anywhere without being asked about the patent cliff, the patent cliff, the patent cliff,” she said. “The patent cliff is one aspect of a complex, multilayered landscape, and I think each company is going to face it differently.”

Jeremy M. Levin, the chief executive of Teva Pharmaceuticals, the largest global maker of generic drugs, agreed. “The concept of exclusivity — where only one generic player could actually make money out of the unique moment — has diminished,” he said. “In the absence of that, many companies have had to really ask the question, ‘How do I really play in the generics world?’ ”

For Teva, Mr. Levin said, he believes the answer will be both its reach  — it sells 1,400 products, and one in six generic prescriptions in the United States is filled with a Teva product  — and what he says is a reputation for making quality products. That focus will be increasingly important, he said, given recent statements by the F.D.A. that it intends to take a closer look at the quality of generic drugs. Mr. Levin also said he planned to cut costs, announcing last week that he intended to trim from $1.5 to $2 billion in expenses over the next five years.

This article has been revised to reflect the following correction:

Correction: December 5, 2012

An article on Tuesday about business strategies of generic drug makers in the face of fewer drug patent expirations misidentified the country in which the pharmaceutical company Endo is based. It is in the United States, not Japan.

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