FDA Matters Blog
FDA’s Indifferent Attitude Towards the First Amendment
The FDA doesn’t care about the First Amendment rights of the companies it regulates. It cares even less about the “free speech” rights of those companies’ sales and marketing representatives.And why should the agency care? One of FDA’s primary missions is to protect the public health and safety of the American people from illegal, adulterated and misbranded products. Doing so involves restraining food, drug, device and cosmetics companies from committing fraudulent and deceptive acts that are not protected by companies’ commercial free speech rights.Nonetheless, FDA Matters envisions opportunities for FDA and industry to broaden permissible product communications. The key is understanding history, not constitutional law.
The FDA doesn’t care about the First Amendment rights of the companies it regulates. It cares even less about the “free speech” rights of those companies’ sales and marketing representatives.
And why should the agency care? One of FDA’s primary missions is to protect the public health and safety of the American people from illegal, adulterated and misbranded products. Doing so involves restraining food, drug, device and cosmetics companies from committing fraudulent and deceptive acts that are not protected by companies’ commercial free speech rights.
Nonetheless, FDA Matters envisions opportunities for FDA and industry to broaden permissible product communications. The key is understanding history, not constitutional law.
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I recently participated in a forum at American University Washington College of Law on “Evolving First Amendment Protection of Commercial Speech” and offered up my mantra that constitutional analysis is largely irrelevant from FDA’s perspective. I said “largely” because FDA is still part of the federal government and can’t act arbitrarily. On the other hand, the agency mostly operates within the zone in which government is given the most leeway: where public health and safety is at stake and the threat is from commercial (as opposed to individual) speech.
History, not constitutional law, provides the best explanation. The sale of bad food and drugs—often accompanied by slick, deceptive pitches—goes back millennia and was even addressed as a problem in most ancient legal codes.
FDA’s own birth comes from a time when state regulation and inspection of food and drugs was minimal, inconsistent and often corrupt. It is hard for any of us to imagine what an unregulated market in food and drugs is like. Yet, it is not so long ago.
The 1938 Amendments to the Food, Drug and Cosmetics Act gained popular support in part because of a traveling exhibit that portrayed the death and disability that resulted from patent medicines, counterfeit products, false medical and scientific claims, and adulterated and misbranded products. Lax to non-existent cosmetics standards were particularly singled out for their role in causing burns and blindness, as well as some deaths.
It is nice to imagine that this world is behind us, just an interesting piece of history. But it isn’t.
No industry regulated by FDA is immune from shoddy products, false claims, unscrupulous behavior and greed-induced threats to public health and safety. I am sure that none of my readers count themselves among these “bad guys,” but they exist in the U.S., as well as globally.
Further, even the great and innovative companies—household names that we view with great trust—have often proven to be quite fallible. A certain amount of informal off-label promotion of drugs and devices is rightfully ignored--when good studies have been published, when the off-label indication is very close to an approved use, when assertions are made with great care about the extent of proven scientific knowledge.
In contrast, most of the off-label promotions that have resulted in billion dollar settlements with big-name drug companies have not been based on such close questions. Nor have they been the result of an individual salesperson crossing the line in some excess of enthusiasm.
Rather, the off-label promotions have been the product of marketing departments and sales managers who encouraged, empowered, or authorized the off-label promotion. There never seems to be a good answer as to who was supervising marketing and sales, which is why so many drug companies are now operating under government-negotiated corporate integrity agreements.
From FDA’s perspective, there are legitimate, well-documented reasons to scrutinize all companies: none are immune from the impulse to over-hype products to expand markets and sales beyond what FDA has approved. This is not a matter of FDA being over-fussy. It is the inevitable conclusion from about 4000 years of human commerce in food and drugs.
In the face of this, the First Amendment really has very little place. Commercial free speech does not extend to misleading statements, blatant fraud, or deception. FDA sees too much of this to ignore.
FDA Matters believes the agency still has an obligation—but not a constitutional one--to clarify its standards, provide published guidance, and demonstrate acceptance that the Internet has fundamentally changed the nature of product promotion. The lack of FDA guidance on social media (first raised at an agency hearing 15 years ago) is particularly outrageous and the agency’s tendency to create de facto policy with enforcement letters is an abdication of responsibility.
The drug and device industry can also improve the situation. They need to stop looking at the current controversies in product promotion as noble causes involving sacred constitutional rights. If these industries have a claim to better treatment and clearer policies, it needs to be grounded in the contributions they make to improve public health and evidence of serious efforts to rid their companies of unscrupulous promotional practices.
Steven
I have written previously on some of the issues in drug and device promotion, as well as about opportunities for FDA and industry to reach accommodation:
Off-Label Promotion: Best Resolved by Congress, Not Courts December 2012
On December 3, a federal appeals court ruled against one of the FDA’s untouchable restrictions on industry—thou shalt not promote the off-label use of pharmaceutical products. An industry that is little interested in constitutional law suddenly finds itself talking about the First Amendment. At stake: permitting off-label promotion undercuts the incentive for companies to thoroughly investigate the safety and efficacy of a drug for a second or third use.
Off-Label Uses Need to Become On-Label Indications December 19, 2009
A friend asked: what advice would you give a pharmaceutical company in the late stages of developing a new product that will be widely used off-label? The company’s concern was that FDA might hold the first use to a very high, perhaps unrealistic standard to protect patients that might receive the drug off-label after approval.
Internet Communications: FDA Needs to Divide the Issues to Conquer the Problem Dec. 2nd, 2009.
Creating an Internet communications policy for regulated medical product companies is so daunting that FDA has largely ignored the responsibility. November’s FDA hearing on social media was an important step, but offered no sign that new policy will be announced anytime soon. FDA needs a different approach. This is not a matter of a large, complicated problem with many facets. Rather, it is a number of smaller problems that can be addressed separately.
Off-Label Promotion and Whistleblowing September 9th, 2009
Whistleblowing and off-label promotion of drugs and devices have become hot topics because of the September 2 Pfizer settlement with the federal government. While none of my views are specific to Pfizer, the company’s settlement provides an opportunity to comment on off-label promotion….and to encourage bio-pharma and medical device companies to engage in deeper soul-searching.
Off-Label Promotion: Best Resolved by Congress, Not Courts
On December 3, a federal appeals court ruled against one of the FDA’s untouchable restrictions on industry—thou shalt not promote the off-label use of pharmaceutical products. An industry that is little interested in constitutional law suddenly finds itself talking about the First Amendment and whether, and on what grounds, the case will be appealed.Meantime, the court’s decision left FDA Matters torn between cheering and booing. Patients are poorly served if their doctor is prescribing drugs without being able to tap into all sources of relevant knowledge. However, permitting off-label promotion undercuts the incentive for companies to thoroughly investigate the safety and efficacy of a drug for a second or third use.
On December 3, a federal appeals court ruled against one of the FDA’s untouchable restrictions on industry—thou shalt not promote the off-label use of pharmaceutical products. An industry that is little interested in constitutional law suddenly finds itself talking about the First Amendment and whether, and on what grounds, the case will be appealed.
Meantime, the court’s decision left FDA Matters torn between cheering and booing. Patients are poorly served if their doctor is prescribing drugs without being able to tap into all sources of relevant knowledge. However, permitting off-label promotion undercuts the incentive for companies to thoroughly investigate the safety and efficacy of a drug for a second or third use.
Benefits and abuses of off-label use. Off-label use is a medical necessity--an acknowledgement that the current inventory of approved drug indications is woefully inadequate to deal with the breadth, complexity and individual idiosyncrasies of human disease. All patients—but particularly those with rare diseases—would suffer grievously if physicians did not have flexibility with regard to the off-label use of pharmaceutical products.
Some off-label uses are supported by extensive published scientific studies, but no corporate entity or individual has the financial incentive to underwrite the FDA approval process. Many other off-label uses are in the evidence-thin realm of “we tried it for lack of alternatives and the patient seemed to be better.” The benefits of specific off-label uses are evaluated by published collections of expert opinions (known as compendia). The practice of prescribing off-label is monitored and approved (inconsistently) by payers.
If doctors can legally prescribe a particular drug for a specific use (albeit off-label), then companies ought to be able to provide “truthful and not misleading” information that they possess. Arguably, they can do so now (via reprints of scientific articles), but only in response to a physician’s request. This is a very limited means of disseminating information.*
The Struggle to Incentivize Approval of Second and Third Uses of Approved Drugs. As I have written previously, it is in the public interest for off-label uses to become on-label indications. The agency is remarkably positive about deferring to the professional judgment of physicians, but would like to see every off-label use get the scrutiny necessary to assure it is safe and effective.
One of FDA’s great fears is that off-label prescribing will become dominant in clinical medicine (as I am told it has in certain areas of oncology). FDA is concerned that companies will receive approval for a first use, then (directly or subtly) encourage doctors to prescribe off-label. If this strategy is profitable, FDA worries that fewer and fewer companies will commit the time and money to gain approval for additional indications. If a company can’t promote off-label, then it is more likely to invest in clinical trials to gain approval of the additional indications.
Unrestricted promotion of off-label use would definitely undercut FDA. In such an environment, I believe that many companies will “game” the system by finding a comparatively easier first use for approval, then let sales for other uses build off-label. Nor do I think companies are universally concerned about “litigation commenced under states’ product liability laws for ineffective products and the resulting reputational harm from such lawsuits.”**
Congress, Not the Courts, Should Set the Ground Rules. By their nature, courts pick winners in these situations; they don’t create rules that maximize two competing public goods. I have been taught (and believe) that litigation is almost always the worst and most inefficient way to solve a problem. I consider this an example.
To achieve appropriate policy, Congressional action is needed.*** For many reasons, this may never happen. However, it is the only way to reconcile the competing and valid positions held by industry and FDA. I encourage Congress to try to bring peace to this area of contention.
Steven
* Even without permissive policies, company sales and marketing practices are a source of constant problems, as discussed in Off-Label Promotion and Whistleblowing.
** For those seeking a more legal and enforcement-oriented perspective on the court’s decision, including a number of critical nuances not covered here, I recommend the FDA Law blog’s current analysis. The paragraph and the quote are based on that article’s description of why some commentators argue that off-label promotion is not a threat to FDA’s drug approval process.
*** A thorough and forthright FDA administrative proceeding (followed by guidelines or regulations) could also clear the air. This is unlikely because the agency generally lacks objectivity on a topic it feels so strongly about, plus the agency tends to respond to court directives, not act to break judicial deadlocks. On a similarly thorny issue, the agency’s failure, after more than 15 years, to articulate sound policy (or any policy) on social media is indicative of why I don’t think the agency can resolve the “off-label promotion” issue by itself.
Adulterated Foods/Counterfeit Drugs: Punishment Should Fit the Crime
We should all be grateful for the considerable protection we receive from FDA against unsafe food, drugs, devices and other products. This is FDA Matters’ belated but heartfelt Thanksgiving message. Thank you, FDA.What FDA cannot do alone—and for which we as a society need to step in—is to change the laissez-faire attitude, laws and enforcement affecting intentional contamination and counterfeiting of FDA-regulated products. When Americans die from intentionally tainted milk, counterfeit products or negligently compounded drugs, we need to recognize this as murder. Let’s step treating it as if it were white-collar crime.
We should all be grateful for the considerable protection we receive from FDA against unsafe food, drugs, devices and other products. This is FDA Matters’ belated but heartfelt Thanksgiving message. Thank you, FDA.
What FDA cannot do alone—and for which we as a society need to step in—is to change the laissez-faire attitude, laws and enforcement affecting intentional contamination and counterfeiting of FDA-regulated products. When Americans die from intentionally tainted milk, counterfeit products or negligently compounded drugs, we need to recognize this as murder. Let’s step treating it as if it were white-collar crime.
Penalties for adulteration of food and brewed products date back as far as the Code of Hammurabi, nearly 4,000 years ago. While unintentional contamination is always a source of potential, even fatal, problems, this is distinct from the widespread and long history of intentional and fraudulent sales of foods as healthful and pure. While not as prominently featured, there is a parallel history of unsafe drugs, devices, cosmetics and other products--now regulated by the FDA and which form a fundamental part of the agency’s history and ongoing mission.
In recent years, China has gained some notoriety for its particularly strong stance against individuals who intentionally and willfully violated its food and drug laws for their own personal profit. In 2009, two men were executed in China for tainting milk powder with melamine, an industrial chemical. The adulterated milk killed at least six children and reportedly sickened more than 300,000. Those executed were the dairy farmer and milk salesman who were at the center of the scheme. Two years before that, China executed Zheng Xiaoyu, the head of China’s FDA for accepting bribes to allow untested drugs to be approved for marketing.
Leaving aside that many capital crimes in China would not be so here, the offenses involved in the two Chinese examples would certainly appear to merit long jail sentences in the U.S. However, that just doesn’t seem to be the case in the United States—at least looking at the history of food and drug problems in the US over the last 10 years. The massive growth in counterfeit drugs and devices (by definition, intentional crimes of mislabeling and adulteration) only reconfirms the appearance that we are not acting strongly enough to punish people and companies who are intentionally putting Americans at risk.
Why the difference in attitudes? I believe the Chinese would argue that the farmer and the salesman were as responsible as if they had held a gun to the head of six children and murdered them. In the US, the consequence of murdering children in this fashion would likely be execution or life imprisonment. What’s missing in the U.S. (or so it seems) is the understanding that killing people with intentionally tainted food and drugs IS killing them with the same malice as using a gun.
What is different (and of concern) is the concept of a heinous crime. The worst possible interpretation is these were commercially-motivated executions, designed to show the world that the Chinese are tough and their products getting safer. Even still, six murders were involved in the milk tainting case and one purpose of punishment is deterrence. Whatever we may think about the effectiveness of capital punishment, one hopes that those considering crimes involving fake foods and drugs will think twice (and twice again?) before proceeding in China.
We haven’t sent the same strong message to would-be malefactors in the U.S. and those exporting to the U.S.
Given this, we should be thankful to FDA for every day we don’t encounter willfully adulterated foods and intentionally fake and dangerous drugs and devices. And we should be rethinking whether our own standards are in dire need of upgrading. These are not situations in which probation and forgiveness are the right approaches.
Steven
PS: To anticipate and deflect some outraged feedback, this column is specifically about gross negligence where the person knew--or should have known-- in advance that someone would be likely to die. Such events occur more often than any of us want to acknowledge.
Drug Product Pricing 101: A Fundamental Issue Revisited
Eighteen months ago, FDA Matters wrote about the firestorm created by KV Pharmaceuticals’ decision to “charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. The same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose.”Three months ago, K-V Pharmaceuticals filed for bankruptcy protection. This week, a federal judge rejected the company’s last-ditch effort to save itself by ruling that FDA had discretion to permit continued compounding of the drug.No one knows the “right price” for this or any other drug, but there are ways to rationally evaluate and guide product pricing decisions. Apparently, not everyone in industry knows this.
Eighteen months ago, FDA Matters wrote about the firestorm created by KV Pharmaceuticals’ decision to “charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. The same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose.”
Three months ago, K-V Pharmaceuticals filed for bankruptcy protection. This week, a federal judge rejected the company’s last-ditch effort to save itself by ruling that FDA had discretion to permit continued compounding of the drug.
No one knows the “right price” for this or any other drug, but there are ways to rationally evaluate and guide product pricing decisions. Apparently, not everyone in industry knows this.
Value/pricing analysis helps companies determine an appropriate and defensible price. Some large pharmaceutical and biotech companies have the in-house capacity. Generally, small and medium-sized companies will use external consultants or consulting firms to assure a professional, unbiased process. However, it seems clear that some companies don’t bother to undertake a sophisticated analysis prior to setting prices.
In recommending a particular price or a range of prices, the consultant or consulting firm will look at three or more approaches…and then work with the company to make judgments about “best fit” or achieving consensus among a range of possible prices. Here are three examples of the approaches a consulting firm might use:
· “Value-added” pricing. This values the company’s product (and supports a price) based on replacement or enhancement of current treatments in the same clinical category. In the case of an asthma drug, a value-added pricing approach would look at “savings” achieved by the reduction in hospital days, emergency room visits, and disability. Other system savings might be considered, such as the benefit of added compliance, the reduction in concomitant drugs, fewer side effects, etc. Any system “costs” (e.g. loss of productivity, treatment of adverse events) are also included in the model.
· “Cost plus” pricing. This values the company’s product based on the development costs and achieving a reasonable return on investment (ROI). This may include real, imputed and opportunity costs. Thus, the “cost” component is likely to be greater than the company’s actual expenditures. Pricing in this approach is highly dependent on the ROI variable and the likely timeframe before newer products or generics cut deeply into sales.
· “Comparable value” pricing. This looks at the pricing of products that have comparable characteristics or benefits, but may be in different clinical categories than the company’s product. For example, a new recombinant vaccine might be compared to the pricing increment when another vaccine was “upgraded” to a recombinant version. In the case of a unique therapy or breakthrough (e.g. a new drug for Huntington’s disease), an analogy is drawn to the most relevant situations in other treatment areas.
The analytic models are adjusted for a host of variables, such as the size of the potential market, the degree and rate of market penetration, and the likely product lifecycle. As noted, there is usually a consensus-building process where the consultant works with the company to determine a price that factors in the results of the different analyses.
Each consulting firm has its own approach, a proprietary model to distinguish their services from competing firms. These models add value and reach far beyond the basics I have described above.
Now you have an idea of how it’s done….or should be done. This analytic process should reduce objections to the pricing of a product and also prepare a company to defend its pricing decision. Controversy cannot always be avoided, but shareholders, patients, and payers are always going to respond better to companies who have backed their pricing with sound reasoning.
Steven
Disclosure: I am not affiliated with any consulting firm that does pricing analysis, nor is this a service I provide. However, if you are interested in the names of a few firms that are in this business, please contact me by e-mail at sgrossman@fdamatters.com.
Biosimilars Update: Keys for the Next Year and Beyond
The biosimilars market in the U.S. will not grow large overnight. However, over the next 4 to 10 years, a lot of companies are going to become players. During this same period, health plans, pharmacy benefit managers, Medicare, and Medicaid are going to start reaping savings by buying less expensive biosimilars. By a decade from now, sales of biosimilars will be creating new winners and losers in the overall biopharmaceutical marketplace.In light of this, I was recently asked: what should a developer or investor be looking to achieve over the next year in the area of biosimilars? What should they be looking to achieve in the years after that?
The biosimilars market in the U.S. will not grow large overnight. However, over the next 4 to 10 years, a lot of companies are going to become players. During this same period, health plans, pharmacy benefit managers, Medicare, and Medicaid are going to start reaping savings by buying less expensive biosimilars. By a decade from now, sales of biosimilars will be creating new winners and losers in the overall biopharmaceutical marketplace.
In light of this, I was recently asked: what should a developer or investor be looking to achieve over the next year in the area of biosimilars? What should they be looking to achieve in the years after that?
Over the next year: Assuming the U.S. biosimilar law survives the upcoming Supreme Court decision (concerning the constitutionality of the President Obama’s health reform program), then the last roadblock to creating a biosimilar marketplace in the U.S. will have been eliminated.
The key, then, becomes: how quickly can FDA complete the multiple steps necessary to establishing a viable system for evaluating and approving biosimilars. Here are some key indicators to watch in judging the agency’s progress:
- the number of investigational new drug applications (IND's) being issued for biosimilars, which would be a “leading indicator” of slowdown or snags in FDA’s initial intake process;
- publication of draft policy guidances dealing with critical details such as nomenclature, label warnings, unique names, etc. (until these issues are settled, FDA will be reluctant to approve anything);
- revised estimates of how many fees the FDA expects to collect each year under the new biosimilars user fee program (a rough gauge of FDA’s view of its timeframe for approvals).
For those looking to be active in the biosimilars market, the next year provides an opportunity to build and strengthen relationships with payers (especially purchasing groups). Payers are going to be focused on the strength of clinical, animal and laboratory data comparing the biosimilar to the original biologic product. There will be a need for biosimilars to be offered at a discount to the cost of the original, but high-quality biosimilars with a 15%-20% discount will dominate the market over biosimilars of questionable quality with 30% to 40% discounts.
Similarly, it is not too soon for companies developing biosimilars to start working with practicing physicians—to calm their fears that they will be forced to use inferior biosimilar products that will result in treatment failures. While payers, not physicians, will drive this market—payers will avoid products likely to generate criticisms and resistance from physicians.
Finally, for those interested in the biosimilars market--stay cool over the next year. Biosimilars are a sure bet for the long-term. However, it will (quite legitimately) take FDA some time to create the new complex approval pathway that is required.
Looking beyond one year. Stay cool is still good advice. Some companies are going to slip behind or drop their investments because of corporate pressures for short-term return on investment (ROI). The biosimilars market is a battle for the long-haul and will belong to those who are prepared to stay the course through the several years it will take for FDA to develop policies and implement them consistently.
Another potential restraint on developers’ and investors’ commitments over the next several years is the persistent allegation that the U.S. biosimilars market will be limited unless FDA makes a determination that a biosimilar is interchangeable with the original product. However, FDA has placed a low priority on establishing a pathway for determining that an approved biosimilar is also interchangeable with the original biologic product.
This “controversy” is a throwback to the implementation of Hatch-Waxman in the 1980’s. At that time, substituting copies for originals was a new concept, quality was low, purchasing was decentralized, and doctors had no incentive to prescribe generics. Allowing forced substitution of FDA-approved generic drugs because they were “interchangeable” was an important dynamic in the growth of the generic drug industry.
However, none of these same underlying conditions are present at the beginning of the U.S. biosimilars market—substitution is widely accepted, quality biosimilars will be available, purchasing is far more centralized, and physicians will have incentives to prescribe biosimilars. FDA designation of "interchangeability," key to generic drugs, is almost irrelevant to biosimilars.
As a final thought: the rise of generic drugs made it necessary for innovators to work harder to develop new, patent-protected products that were better than drugs available generically. The same dynamic is going to play out over the next 10 years for biologic products. The biosimilars pathway adds further urgency for innovator companies to be refilling their pipelines with products that are better than ones currently available.
Steven
Spinal Cord Injury—Innovation Measured in Decades, Not Headlines
We are undergoing a supposed “national crisis” in medical innovation. Congress, FDA, NIH, and industry are involved in multiple initiatives to “cure” this problem. This is particularly visible now because the user fee reauthorization process is underway, but the state of medical innovation is always relevant because of our headline-driven, crisis-oriented culture.To FDA Matters, this approach profoundly distorts medical accomplishment. You can’t use “where are we today” to judge the success or failure of a medical research process that is inherently broad, iterative, uneven, filled with false starts and driven by cumulative success more often than miraculous breakthroughs. As a case in point, I offer efforts to achieve spinal cord regeneration.
We are undergoing a supposed “national crisis” in medical innovation. Congress, FDA, NIH, and industry are involved in multiple initiatives to “cure” this problem. This is particularly visible now because the user fee reauthorization process is underway, but the state of medical innovation is always relevant because of our headline-driven, crisis-oriented culture.
To FDA Matters, this approach profoundly distorts medical accomplishment. You can’t use “where are we today” to judge the success or failure of a medical research process that is inherently broad, iterative, uneven, filled with false starts and driven by cumulative success more often than miraculous breakthroughs. As a case in point, I offer efforts to achieve spinal cord regeneration.
In the mid-to-late 1970’s, I worked for an advocacy group that, among other things, represented the interests of medical research institutions. There was one Congressman on the right committee who was friendly to our cause and with whom we should have had a great relationship.
However, he had two key positions with which we could not agree. He was, simultaneously, the leading Congressional advocate for animal rights and perhaps the only Congressional advocate for spinal cord regeneration. We opposed his position on animal rights because we thought it would hinder medical research.
Surprisingly, we were also against his legislation that would stimulate medical research on spinal cord regeneration. We supported groups promoting the fight against cancer or cardiovascular disease because their proposals allowed NIH significant discretion to determine priorities. In contrast, we were against legislation that would require research on narrow and specific topics, such as spinal cord regeneration.
But our objection (and the vehemence of our objection) went well beyond that. The promise of biomedical research was so great, it was wrong to waste research monies on areas that held no promise.
After all, we thought, spinal cord regeneration was the stuff of science fiction. Despite the death and disability from spinal cord injury—an area of genuine unmet need—there was nothing that could be done. People could dream of a future world where medical science could achieve such miracles, but for the foreseeable future it was wasted money and unfairly gave hope to patients to suggest that spinal cord regeneration was possible.
Flash forward 30 plus years and the Congressman looks like a visionary….and the organization I worked for looks like unwitting advocates for the status quo. A rich base of scientific discoveries has improved supportive care, provided mechanisms for limiting the damage from spinal cord injuries and given reasonable hope that spinal cord regeneration is a possibility for humans in the next 10 to 15 years, maybe sooner.
To gain perspective on this, along with a sense of NIH’s current commitment to this area of research, go to http://www.ninds.nih.gov/disorders/sci/detail_sci.htm and also follow some of the links from that site.
I don’t think we were fools in 1998 because we couldn’t see spinal cord regeneration as a promising research area. Despite the organization’s considerable expertise, we underestimated how far medical research could take us—given enough time, interest, commitment and funding. Also, in retrospect, it is remarkable how willing researchers are to contribute to a process of innovation and discovery for which someone else might eventually gain most of the credit.
Forgive me if I don’t see the crisis of “medical innovation” about which it is so fashionable to complain.
As a result of the user fee reauthorization legislation and other FDA and NIH initiatives, I foresee a more conducive regulatory environment for development and approval of medically-innovative products, particularly orphan drugs. The goal is to allow more flexibility, while maintaining rigor. However, these process enhancements are only valuable if there is a wealth of medical innovation, not a dearth of it.
There is more innovative medical research being done today than at any time in history. But the truly great achievements are usually built on many people’s work undertaken over many decades—and until near the end, they hardly ever rate a headline unless someone is intentionally hyping them. Look beneath the surface and you will find that medical innovation is alive and well and just needs our continued encouragement---via regulatory and funding support.
Steven
FDA, Me and Maybe the Mafia—A True Story
In honor of FDA Matters’ third anniversary, I am sharing a personal story. It reflects FDA’s history as a struggle of competing interests—where sometimes reasonable people disagree, often vehemently, while at other times it is obvious that indifference or greed are the driving forces.Both are a fact of everyday life at FDA and in the FDA-regulated world. Here is my own little story and I still can’t say for sure whether it involved reasonable people or dark forces.
In honor of FDA Matters’ third anniversary, I am sharing a personal story. It reflects FDA’s history as a struggle of competing interests—where sometimes reasonable people disagree, often vehemently, while at other times it is obvious that indifference or greed are the driving forces.
Both are a fact of everyday life at FDA and in the FDA-regulated world. Here is my own little story and I still can’t say for sure whether it involved reasonable people or dark forces.
My first recollection of the artificial sweetener, saccharin (distributed under the brand name “Sweet‘N Low”) was a 1977 visit to the House health subcommittee’s staff office. It was overflowing with boxes that contained letters begging Congress to prevent FDA from removing saccharine from the marketplace.
Later that year, Congress passed the Saccharin Study and Labeling Act. This prevented FDA from acting for 2 years and required a warning label on the packaging that said “This product contains saccharin, which has been determined to cause cancer in laboratory animals.” The law was extended seven times until the issue disappeared in the 1990’s. The labeling requirement was repealed in 2000.*
After I became a Senate staffer in 1979, I was responsible for shepherding through the 1981 and 1983 extension and probably the 1985 extension, which occurred just before I left the Hill.
These were simple bills—short, totally clear in their meaning, and noncontroversial. The only issue (and not a very large one) was that one committee member refused to consent to its unanimous adoption---which slowed the bill at committee and when it got to the Senate floor. I can’t remember any Senator expressing actual concerns about these bills.
Sometime around 1983, I started receiving regular visits and calls from Joseph Asaro, Vice President of Governmental Affairs for Cumberland Packing, makers of Sweet ‘N Low and a business located near the Brooklyn docks. I remember him as pleasant, but terribly anxious that nothing stand in the way of extending the moratorium every two years.
It never seemed to sink in to him that passage of the extension was routine business of the most ordinary sort. The more I reassured him (so he wouldn’t call as often), the more solicitous he became. Then one afternoon, I received a call from my family—who lived on Long Island, maybe 20 miles from Cumberland Packing’s headquarters. That morning, a delivery truck had arrived with multiple cartons of Cumberland products, including several 1000-packet boxes of Sweet’N Low, and the message: let us know when you run out.**
Although it was probably meant as a generous gift (and didn’t violate any Senate rules), I was quite upset. I had mentioned to Mr. Asaro that I had grown up on Long Island, but never my family’s names or where they lived (and 30 years ago, pre-Internet, identifying people’s connections was a difficult task without such information.)
In my imagination (or maybe in actuality), I felt that I was being reminded that he knew where my family lived….and I needed to pay more attention to the legislation. Despite all efforts on my part to banish such thoughts, I admit I considered the possibility that Cumberland was involved in some way in organized crime and I had been threatened.
In 2006, an unauthorized history of Cumberland Packing was published and I found that my concern was well-founded, although perhaps not true. According to the book, a 1994 Washington Post article stated that Joseph Asaro had been “identified as an associate of the Bonanno crime family in a prosecution memo….” Subsequently, a New York Times article reported that federal prosecutors and Mr. Asaro’s attorneys denied there was any connection.***
Threats, even implicit ones, are inherently scary—even if the goal was to make me do something that I was planning to do anyway and for which there was strong Congressional and public policy support. Even at the time, I didn’t really think my family was in “harm’s way.” Still, it made me anxious and self-conscious about what was otherwise a routine task.
Other than being an interesting tale, I hope it is a small reminder to every reader that there are employees of the FDA—sometimes inspectors, but more often in the Office of Criminal Investigations and their colleagues at the FBI and Customs---who do put themselves in “harm’s way” in order to protect us. These threats are invisible to most of us, but are no less real because we don’t see them.
We should salute and remember those who take these risks on our behalf, so that we can enjoy the benefits of a safe food and drug supply.
Steven
* Subsequent studies never strengthened the connection to cancer in humans. In 1985, FDA supported extension of the moratorium and in 1991 withdrew the proposal to ban saccharine from food. It was delisted as a possible carcinogen in 1997 and the warning label requirement was repealed in 2000. http://www.icarus-japan.com/pdf/Saccharin_English.pdf
** Thanks to my mother and sister for their memories of that day, still quite vivid nearly 30 years later.
*** Sweet and Low: A Family Story by Rich Cohen. Published by Farrar, Straus and Giroux, 2006. The material on the possible linkage with organized crime is a footnote on page 144.
Medical Innovation: The Dream of More Cures and More Industry Success
Can we, as a society, stimulate medical innovation? If so, how? These are key questions facing Congress as it considers amendments to the FDA user fee reauthorization legislation. The answers are of central importance to FDA, patients and industry. So far, most of the “solutions” being considered by Congress (legislatively) and FDA (administratively) are worthwhile and likely to have a positive impact over time.However, in FDA Matters’ view, the challenge of stimulating medical innovation mostly lies outside the policy sphere. Instead, achieving more cures and more industry success requires substantive and attitudinal changes inside the research and development process itself.
Can we, as a society, stimulate medical innovation? If so, how? These are key questions facing Congress as it considers amendments to the FDA user fee reauthorization legislation. The answers are of central importance to FDA, patients and industry. So far, most of the “solutions” being considered by Congress (legislatively) and FDA (administratively) are worthwhile and likely to have a positive impact over time.
However, in FDA Matters’ view, the challenge of stimulating medical innovation mostly lies outside the policy sphere. Instead, achieving more cures and more industry success requires substantive and attitudinal changes inside the research and development process itself.
Simply put, most of what can be done externally to stimulate medical innovation is important, but marginal. The biggest changes must come from industry and academia.
New biomedical knowledge is being generated every day, some of it quite extraordinary. The challenge is aligning that knowledge into safe and effective medical products. That process requiring inspiration, ingenuity, luck, capital and incredible amounts of hard work. Unsurprisingly, success is hard to achieve.
Regulatory agencies, legislatures, patients, consumers and payers all have a role to play and can definitely influence the success of the research and development process and, thereby, stimulate medical innovation. However, all of those efforts come to naught unless there is:
- an initial discovery or insight from researchers and inventors
- followed by carefully planned development and clinical trials
- concluding with proof that a medical product is safe and effective for its intended use.
It is the researchers, development teams, product managers, and corporate executives, along with investors and shareholders, who hold the key to medical innovation.
Numerous CEO surveys say otherwise, with a plurality and sometimes a majority asserting that FDA is a major obstacle to their company’s success. However, these CEO’s are hardly objective judges of their own product pipeline. Very few ever acknowledge that regulatory concerns might be justified. When faced with slow-moving projects, failed trials and agency rejections, the natural response of many is to blame FDA.
Reality can be hard for CEO’s to accept. Medical innovation is a tough business, as witnessed by the startlingly large numbers of drugs (and to a lesser extent, complicated devices) that don’t survive late stage development. However, with a few exceptions, the inability to prove safety and/or efficacy--not FDA policy or reviewers-- are the primary cause of product failures.
This does not absolve FDA, just places the focus on the companies, where it belongs. For its part, FDA knows it can do better and is committed to supporting medical innovation For example, the agency has already agreed (on its own initiative and through support of legislation) that:
- Some medical products should be moved along faster in the process than they are now.
- More early-stage meetings with companies would reduce late-stage problems.
- Greater flexibility is needed with particularly promising compounds.
- Areas of unmet medical needs and where trials are particularly challenging should be given more attention.
- Development of new methodologies, such as adaptive trials and proper use of patient-reported outcomes, is a key component of advancing regulatory science.
FDA and Congress seem to be doing a good job of working on these issues. We will see the results in the user fee reauthorization process and other amendments, as well as new policies and pathways being developed at FDA. Hopefully, we will also see Congress support these activities through increased appropriated funding of FDA.
These external changes planned by Congress and FDA are valuable in their own right and will certainly result in some good approvals that might not otherwise have occurred.
However, stimulating a significant increase in approvals of medically-innovative products requires industry to: support more biomedical and bioengineering discoveries, carefully plan development, and achieve proof of safety and efficacy. This past week, the CEO of Eli Lilly, which faces patent expirations and generic competition, stated “I don’t think we can save [cost-cut] our way out of the enormous challenge we face. The best course is to maintain our focus on advancing our pipeline.”
Exactly so. While FDA and Congress are doing their part, our focus shouldn’t wander too far from where it belongs. The key to medical innovation is better and smarter drug and device development. Nothing will help patients or companies if medical innovators don’t innovate.
Steven
The FDA Matters “Guide to the User Fee Reauthorization Process”
The prescription drug (PDUFA) and medical device (MDUFA) user fee programs, which run for 5 years, must be renewed by September 30 of this year (last day of the current fiscal year). House committee staff has just released a 205-page first draft of reauthorization legislation. The Senate has starting releasing drafts on specific issues and has a March 29 hearing scheduled.Because the PDUFA and MDUFA provisions are pre-negotiated by FDA with industry and patient groups, they are likely to change little. Congress’ focus will be on the backlog of FDA-related legislative proposals that have accumulated while awaiting a “must pass” FDA legislative vehicle. This is FDA Matters’ guide to the process and likely amendments.
The prescription drug (PDUFA) and medical device (MDUFA) user fee programs, which run for 5 years, must be renewed by September 30 of this year (last day of the current fiscal year). House committee staff has just released a 205-page first draft of reauthorization legislation. The Senate has starting releasing drafts on specific issues and has a March 29 hearing scheduled.
Because the PDUFA and MDUFA provisions are pre-negotiated by FDA with industry and patient groups, they are likely to change little. Congress’ focus will be on the backlog of FDA-related legislative proposals that have accumulated while awaiting a “must pass” FDA legislative vehicle. This is FDA Matters’ guide to the process and likely amendments.
To understand the unfolding process for user fee reauthorization in 2012, it is useful to think in terms of four levels of legislative proposals that Congress will consider.
Level One: Renewal of Existing Legislation and Uncontroversial New User Fees. In addition to PDUFA and MDUFA, there are two other programs on the same 5-year reauthorization cycle. The Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research Equity Act (PREA) are certain to be reauthorized and may be made permanent.
In this same level are two proposed new user fee programs: the Generic Drug User Fee Act (GDUFA) and the Biosimilars User Fee Act (BSUFA). These have gone through an abbreviated version of the PDUFA and MDUFA negotiation process, meaning that the FDA proposals reflect input from industry, patient groups and other stakeholders.
Level Two: Areas of Strong Consensus to Act; Specific Provisions Not Yet Agreed Upon. Despite Congress’ deep partisan differences, there are several areas in which both political parties appear to be in general agreement about adding programs or strengthening authorities at FDA.
In this level are proposals dealing with drug shortages, incentives for antibiotic drug development, import safety, a core set of medical device process reforms, and some adjustment in the FDA “accelerated approval” pathway for drug and biological products. There is also consensus for dealing with drug supply chain integrity (e.g. anti-counterfeiting), which may be advanced as a separate bill this spring or be folded into the reauthorization legislation.
For the most part, the consensus to act in these areas does not yet include specific legislative language that has bi-partisan support in both the House and Senate. So negotiations are certain, may even be testy at times…but final agreements are near-certain.
Level Three: Areas of Disagreement Where Compromises Are Possible. Ultimately, committee leadership will have to deal with FDA amendments where there are sharp disagreements or a lack of consensus that action is needed.
The two most prominent such issues are the extent of medical device reform and the amount of change needed or appropriate for the drug approval process. In both areas, there is a more limited, core set of proposals that are in level 2.
As with all such areas of disagreement, compromises may ultimately develop. Unlike the issues in level two, these proposals start with disagreements that may lead to negotiations, but with no assurance of inclusion in final legislation.
Beyond those mentioned, the list of issues and amendments that might be offered (and controversial) is limitless, but it is possible that we will see Congress again debating drug re-importation, re-opening the 2010 biosimilars legislation or even considering amendments to Hatch-Waxman. There may also be food safety amendments.
Level Four: Proposals to Dramatically Re-shape FDA and Likely to Be Rejected. A small number of Members of Congress think FDA’s role should be significantly smaller. They see radical surgery on the agency mission as the necessary response to the restraints they feel the agency imposes on industry and on patient access to new therapies.
The possibility exists for amendments that might substantially reduce the agency’s jurisdiction over medical devices or significantly roll back the 1962 Kefauver Amendments that require drugs to demonstrate efficacy (not just safety) before entering the market. There is no reason to think there is a majority in either the Senate or the House for such radical reform or substantial reduction in FDA’s mission. Nonetheless, such proposals may be offered.
Conclusion. In enacting a timely reauthorization of the user fee programs, Congress will need to consider a range of legislative proposals. As these are offered and discussed, this FDA Matters analysis provides a guide to understanding Congressional activities.
Steven
This blog column is a much-shortened version of an article I wrote that appears in the March 2012 issue of Scrip Regulatory Affairs, entitled “Reauthorizing US FDA User Fees: A Slow-Moving Train Wreck?” Readers interested in a copy of the longer article should contact me at sgrossman@fdamatters.com.
Why is Drug Discovery So Hard (and Expensive)?
Notwithstanding herbal medicines and the re-emergence of leeches as therapy, it is only in the last 70 years that physicians have had proven medical science to support “the healing arts.” Potions and procedures of dubious value have been replaced by powerful medicines that treat infections, heart disease, diabetes and mental illness.While the benefits are clear, the difficulties and cost of creating new medicines are a source of widespread frustration to patients and industry alike. FDA Matters is impressed that current efforts to speed up drug discovery are gaining momentum. At the same time, the nature of human biology dictates that the creation of new therapies will never be easy or inexpensive.
Notwithstanding herbal medicines and the re-emergence of leeches as therapy, it is only in the last 70 years that physicians have had proven medical science to support “the healing arts.” Potions and procedures of dubious value have been replaced by powerful medicines that treat infections, heart disease, diabetes and mental illness.
While the benefits are clear, the difficulties and cost of creating new medicines are a source of widespread frustration to patients and industry alike. FDA Matters is impressed that current efforts to speed up drug discovery are gaining momentum. At the same time, the nature of human biology dictates that the creation of new therapies will never be easy or inexpensive.
Recently, Matthew Herper of Forbes wrote about the “truly staggering cost of inventing new drugs”, a range he put at $4-11 billion per success! The point is that every success is bearing the cost of a staggeringly-large number of expensive failures.
The chart at the end of this column shows that about 10,000 compounds are screened to produce about 250 compounds that are promising enough for pre-clinical and early clinical testing. In turn, this produces five compounds in late stage clinical testing and only one approved drug. As a result, efforts to improve drug discovery have two goals:
- early identification of compounds with the highest probability of proving safe and effective, and
- the ability to discern and discard promising-looking compound that are, nonetheless, likely to fail at later stages.
The growing consensus behind these goals has pushed collaboration and innovation much faster than would otherwise be expected. Identification and validation of biomarkers, pharmacogenomics, toxicology databases, and new compound screening methodologies are among the many approaches to enhance the discovery process.
NIH has committed to speeding early drug discovery through the just-launched National Center for Advancing Translational Sciences (NCATS). I admit that I was skeptical when it was first proposed because it looked like NIH wanted to compete with industry. However, NCATS’ is appropriately focused on generating useful early-stage drug discovery tools, data and methodologies that will be made widely available and are complementary and supportive of industry efforts. (The advocacy group, Faster Cures, recently held an informative webinar with NCATS’ leaders. Here are links to the audio and accompanying slides.)
FDA has acknowledged the need to be more attuned to advancing medical innovation as an integral part of the agency’s role in promoting the public health. This was reflected in FDA’s October, 2011 report, Driving Biomedical Innovation: Initiatives to Improve Products for Patients and by its willingness (during user fee negotiations and other venues) to commit to more early-stage meetings with companies. In addition, FDA has committed resources to creating and validating new tools and methodologies for drug discovery. Most important of all, FDA recognizes the need to act on the critical next stages after drug discovery by creating a more predictable regulatory pathway that minimizes the time that it takes safe and effective new medicines to gain approval.
All these activities taken together may produce dramatic improvements on the front end of drug discovery. This would provide the ability to focus on the “most promising, least likely to fail” compounds and reduce the number of expensive failures. In some cases, companies and regulators might know enough from the initial discovery screening to shorten or narrow pre-clinical and clinical testing.
The new focus and activity on drug discovery is reason to be hopeful....but these efforts will take time to bear fruit. The process of taking a compound “from bench to bedside” must still be measured in years.
Optimism should also be tempered by realizing that the human body is almost always more subtle than we can discern, even with the best predictive tools. New uncertainties emerge, even as new biological information resolves old uncertainties about diseases and drug development.
No matter how much we know, there will always be clinical trials that fail, sometimes quite miserably, just when everyone is most sure that the solution is logical and success guaranteed. That’s why drug discovery will never be easy or inexpensive.
Steven
The last two links connect readers with earlier columns on biological complexity: Is the Human Body Just An Exquisitely Intricate Machine? and Scientific Reductionism and the End of Medicine. For those interested, there is a third column on this topic: Personalized Medicine in Perspective.
Development of New Therapeutics is Slow, Expensive and Failure-Prone
http://www.fastercures.org/train/tools/documents/022712_NCATS.pdf (slide 14)
Quality and Safety “Just Don’t Get No Respect”
In every successful company, the glittery careers and the recognizable names belong to people who develop new products that meet consumer and patient needs. Innovation in new products (and careful husbanding of intellectual property and market share) is what brings in the revenue and determines corporate success.By comparison, there is little recognition and often sparse resources for the people devoted to making sure those products (new and old) are safe and of high-quality. The best product ever developed is worthless, and possibly harmful, if standards are not maintained and manufacture and supply carefully monitored. The stakes are so much higher for FDA-regulated products.
In every successful company, the glittery careers and the recognizable names belong to people who develop new products that meet consumer and patient needs. Innovation in new products (and careful husbanding of intellectual property and market share) is what brings in the revenue and determines corporate success.
By comparison, there is little recognition and often sparse resources for the people devoted to making sure those products (new and old) are safe and of high-quality. The best product ever developed is worthless, and possibly harmful, if standards are not maintained and manufacture and supply carefully monitored. The stakes are so much higher for FDA-regulated products.
FDA Matters has previously analyzed how “safe” has many meanings. My focus in this column is the safety of processing, manufacturing and distribution of FDA-regulated products. Is the milk we drink safe from adulteration (either intentional or unintentional)? Are medical devices manufactured with sufficient precision?
Does every batch of a biological product deliver consistently safe results? Are sterile conditions maintained when drugs are manufactured? The list of questions is endless because there are a limitless number of ways in which products can be unsafe.
When FDA Matters has covered quality and safety issues in the past, we have almost always mentioned our suspicion that CEO’s and others in the corporate suites are not concerned enough. It is reflected in the recalls, the extended plant closings, the drug shortages caused by suppliers unable to produce quality products, and the number of inspection reports (483’s) that contain substantive and non-trivial problems.
We assume that CEO’s want to produce safe and high-quality products. After all, it is bad for business to do otherwise. Yet, we suspect too many corporate executives are overly focused on new product development, marketing and sales and worry too little about the quality and safety of what they already produce.
Close accountability and adequate resources are the necessary ingredients of quality and safety. Too often, the opposite appears to be the case in corporations: inattention, underfunding, delegation to distant subordinates and overreliance on vendor guarantees.
FDA won’t back down from its vigilance. Commissioner Hamburg’s reorganization of the agency was, in part, to consolidate authority over quality and safety and put it in the hands of an immediate subordinate. Dr. Hamburg did what I hope every corporation would do—insist on closer accountability to the CEO with regard to production of safe, high-quality products. This becomes more urgent as the scope of this responsibility becomes global, more complex and harder to manage.
The foundation of the Food, Drug and Cosmetic Act was enacted so long ago and generally has been so successful, it is easy to forget that FDA was created and built for the specific purpose of protecting consumers and the public health from dangerous products. It is the FDA that cleaned up the market in tonics and patent medicines, ensured there were serious consequences for companies that adulterated food and drug products, and created a basic public trust in the foods, medicines, devices and cosmetics that we use daily.
Quality and safety of FDA-regulated products is also on the mind of Congress. A little more than a year ago, it passed the Food Safety Modernization Act, a thorough overhaul of our nation’s approach to assuring Americans have a safe food supply in a global environment.
This year, as part of the reauthorization of user fee legislation, Congress is probably going to adopt additional provisions addressing the safety of drug imports, the need to eliminate drug shortages, and the necessity of supply chain integrity. Also in that legislation will be the Generic Drug User Fee Act, which funds a significant expansion of FDA’s efforts to inspect generic drug facilities.
Industry, Congress and FDA need to continue their focus on innovation and new products. This is the path that will bring better lives to Americans and allow our nation to better compete in the global economy.
While doing so, they must also pay sufficient attention and provide adequate resources to the fundamental, but less glamorous, job of assuring the processing, manufacturing and distribution of safe, high-quality FDA-regulated products. We must insist on this standard in the American marketplace.
Steven
FDA and Industry Relations: A Mix of Frustration and Respect
There is no one answer to the question: what is the state of FDA-industry relations? FDA Matters hears some say: FDA does what industry asks it to do, the agency is a puppet. Others say that FDA is obstinately blocking industries’ path to new, better and innovative products. Yet others say FDA is misguided at points, but well-intentioned and most often right.The state of FDA-industry relations turns out to be particularly important in 2012. As part of the user fee reauthorization legislation, Congress will be faced with non-user fee amendments affecting every aspect of FDA’s mission, programs and decisions. Industry will be advocating for some; trying to block others, based in part on its relationship with FDA.
There is no one answer to the question: what is the state of FDA-industry relations? FDA Matters hears some say: FDA does what industry asks it to do, the agency is a puppet. Others say that FDA is obstinately blocking industries’ path to new, better and innovative products. Yet others say FDA is misguided at points, but well-intentioned and most often right.
The state of FDA-industry relations turns out to be particularly important in 2012. As part of the user fee reauthorization legislation, Congress will be faced with non-user fee amendments affecting every aspect of FDA’s mission, programs and decisions. Industry will be advocating for some; trying to block others, based in part on its relationship with FDA.
Looking at the situation superficially:
- FDA and the biopharmaceutical industry would appear to be on good terms. Negotiating the language and terms of the Prescription Drug User Fee Act (PDUFA) reauthorization went relatively smoothly and the agreement addresses a number of industry concerns
- FDA and the medical device industry would appear to be on shaky terms, at best. The negotiations on the reauthorization of the Medical Devices User Fee Act (MDUFA) have been extended and contentious. Only in the last few days has there been an agreement in principle on a proposal for MDUFA reauthorization.
- FDA and the food industry would appear to be on excellent terms. The Food Safety Modernization Act (FSMA) passed in late December 2010. Consumers and most of industry supported the legislation and there has been cooperation by industry on implementation.
In each case, things are more complicated beneath the surface.
Drugs and biologics. Industry is broadly supporting FDA’s proposal for reauthorization of PDUFA, having helped negotiate a number of provisions that will improve the drug development, review and approval model used by the agency. When it comes to the additional amendments to be considered by Congress, the unanimity is already breaking down.
For example, during 2011, The Biotechnology Industry Association (BIO) released a series of proposals for improving FDA. FDA Matters praised BIO for putting forth a bold agenda, while seeing its centerpiece proposal, a new “progressive approval” pathway, as only a starting point for discussion. In a tacit acknowledgement of FDA opposition (not publicly expressed by FDA) and industry dissension, BIO has recently started advocating instead for changes in the existing FDA accelerated approval process.
Medical devices. The difficult relationship between FDA and the medical device industry is long-standing. Both sides have been able to talk, often quite productively, but ultimately the device industry returns to its default position that the FDA needs to be held accountable for its inconsistent guidance and lack of timeliness in its reviews.
The just-released MDUFA reauthorization agreement in principle (in the form of FDA meeting notes) looks like it can bridge the gap that has divided FDA and the medical device industry…or at least that’s my interpretation of industry and FDA press statements. However, Congress may yet amend the proposal if industry proves divided in its support. As to non-user fee amendments in the medical device area, it is to be assumed (given the history) that they will tend toward contentious, with FDA on the defensive.
Food. Public discussion of the user fee reauthorization legislation has focused on drug and medical device issues, but nothing prevents food from becoming part of the mix. Any issues or amendments left over from the FSMA debate are fair game, as would anything that went into the final legislation despite objection from FDA or some interest group.
One of the most prominent “leftover” issues is the extent of fees collected from the food industry to support FDA activities (merely calling them “user fees” is enough to generate a heated discussion). While the issue may come up regardless, there is a strong chance that the President’s budget request will contain legislative proposals for new food fees, starting in FY 13.
Conclusion. As the user fee reauthorization legislation moves forward, it may be too much to ask for fair debate, FDA-industry harmony, and quick resolution of outstanding issues. Time is of the essence—the real deadline is closer to July 1 than September 30
It would also be wonderful if all parties (including Congress and industry) would stick with the issues and refrain from bashing FDA.
Steven
Animal Research: An Update on One of FDA’s Core Values
The value of animal research in the life sciences is considered an NIH issue. FDA Matters believes that FDA and its stakeholders should be equally involved.Animal research is the vital first step in the development of new medical products. Before any safety or efficacy testing is permitted in humans, FDA must be satisfied with animal testing data submitted by the product sponsor. Pick any medical breakthrough and you will find animals were tested prior to humans.
The value of animal research in the life sciences is considered an NIH issue. FDA Matters believes that FDA and its stakeholders should be equally involved.
Animal research is the vital first step in the development of new medical products. Before any safety or efficacy testing is permitted in humans, FDA must be satisfied with animal testing data submitted by the product sponsor. Pick any medical breakthrough and you will find animals were tested prior to humans.
For understandable reasons, we tend to focus on the human part of new products. Which patients will be helped and by how much? By the time a company files a New Drug Application (NDA) or the equivalent in biologics and devices, the headline is the human data. While the animal data is always relevant, it has largely served its purpose as the gateway for human trials.
We talk about the people part without recognizing that the pipeline of innovative drugs and devices would collapse if a broad range of research on animals (e.g. non-human primates, pigs, sheep, dogs, rats, mice, zebrafish, fruit flies, worms) was heavily restricted. Over 96% of the animals used in biomedical research are rodents, birds, fish and invertebrates. As background, there is an excellent summary on the need for animal research available from the advocacy organization, Americans for Medical Progress.
Everybody should be for protecting the welfare of animals. Any means to lessen our dependence on research animals should be welcome. Animals should always be treated ethically and pain reduced or eliminated. The fewest number of animals should be used to reach a conclusion that can be relied upon. Laboratories should be accredited and subject to inspection. Problems should be addressed within a facility under the watchful eye of government, accrediting and licensing agencies and in accordance with the Animal Welfare Act.
Since I last wrote on this topic two years ago, the nature of the animal rights movement in the United States has shifted. Successful prosecutions under the 2006 Animal Enterprise Terrorism Act (AETA) have purged some of the more violent elements of the movement and discouraged others from engaging in destructive acts. However, a small number of activists still use tactics of harassment, intimidation, and vandalism against some research scientists and veterinarians involved in working with laboratory animals.
Many of the research advocacy groups say a greater threat to medical progress is proposed state and federal legislation, often authored by animal rights lobbyists, that has little to do with animal welfare but rather seeks to restrict or raise the cost of animal-based research. An example is The Great Ape Protection and Cost Savings Act legislation, which continues to draw strong support in Congress. As of April 29, 2012, the House version (HR 1513) has 165 sponsors and the Senate version (S 810) has 14 sponsors.
These bills would virtually eliminate chimpanzee research, which includes work in vaccines, hepatitis, HIV/AIDS, malaria and some types of cancers. Although we use only a comparatively small number of chimpanzees in animal research, I am told that the work often provides essential information that cannot be obtained in any other way.
While the legislation is purportedly about animal welfare, these bills are really designed to limit the biomedical research that we all support and which, we hope, results in FDA-approved medical products.
For me, the choice is easy. I want a product or procedure tested in animals before it is given to me or my loved ones. I believe in protecting animals, but human rights come first.
The importance of animal research needs to be a core value for FDA. Those who benefit from animal research (including patients and industry) need to provide the manpower and financial resources to counter the animal rights movement in America and its threat to medical progress for humans.
Steven
Bold Discussions: Possible New Approval Pathways for Breakthrough Drugs
For discussion purposes, let’s assume that there is a broad consensus that patients would benefit if new drugs and devices could get to the US market sooner. Current market barriers can be fearsome: long timeframes, high cost and regulatory uncertainty. How can we fix this problem? What costs and risks are involved in getting products to patients faster?These are old questions, renewed this year by the Biotechnology Industry Organization’s (BIO) proposal to create a “progressive approval” process. This is controversial, but also worthy of widespread discussion. FDA Matters finds itself interested and open-minded about ways to permit earlier market-access if patients will benefit and the safety risk minimized.
For discussion purposes, let’s assume that there is a broad consensus that patients would benefit if new drugs and devices could get to the US market sooner. Current market barriers can be fearsome: long timeframes, high cost and regulatory uncertainty. How can we fix this problem? What costs and risks are involved in getting products to patients faster?
These are old questions, renewed this year by the Biotechnology Industry Organization’s (BIO) proposal to create a “progressive approval” process. This is controversial, but also worthy of widespread discussion. FDA Matters finds itself interested and open-minded about ways to permit earlier market-access if patients will benefit and the safety risk minimized.
Currently, FDA has several mechanisms for helping drugs move faster through the approval process, but only one might be said to be an alternative pathway. FDA describes it as follows:
ACCELERATED APPROVAL: [I]n 1992 FDA instituted the Accelerated Approval regulation, allowing earlier approval of drugs to treat serious diseases, and that fill an unmet medical need based on a surrogate endpoint….For example…FDA might now approve a drug based on evidence that the drug shrinks tumors because tumor shrinkage is considered reasonably likely to predict a real clinical benefit [e.g. prolonged survival].
Since creation of the program, FDA has granted an average of about four accelerated approvals to drugs each year, sometimes for more than one clinical indication. More than half of these indications have been shown subsequently to have clinical benefit and FDA has converted the approval from accelerated to regular. Others accelerated approval drugs are still being studied and a few have been withdrawn.
FDA has itself shown interest in moving beyond accelerated approval. Early this fall, FDA released a report, Driving Biomedical Innovation: Initiatives to Improve Products for Patients. In a section entitled “Expedited Drug Development Pathway,” the agency observes:
Sometimes during the development of a new drug to treat a serious or life-threatening disease that has few therapeutic options, the new treatment performs much better than standard-of-care in the early trials. While there is general agreement that such a drug should be developed quickly, there is not a common understanding of how to appropriately speed up development while simultaneously gathering adequate evidence about the performance of the product.
FDA envisions a series of meeting with stakeholders to develop this concept and answer a number of difficult questions about the nature of a new pathway and how it could be implemented.
Consistent with this, BIO had already been talking about transforming the FDA approval process by permitting a “progressive approval” and market access for innovative products that:
- treat an unmet medical need,
- significantly advance the standard of care, or
- are highly targeted therapies for distinct sub-populations.
The November 11, 2011 BioCentury reported that Senator Kay Hagan (D-NC) will be circulating draft legislation to create two new FDA approval pathways, presumably beginning the process of providing details for BIO’s concept. Here are the new approaches:
- Progressive approval would require data "reasonably likely" to predict clinical benefit, the standard currently used for accelerated approval. Unlike accelerated approval, drugs could receive progressive approval without data from a surrogate endpoint.
- Exceptional approval could be granted when the data necessary to satisfy the standard for approval "cannot ethically, feasibly or practicably be generated."
Much more needs to be said about how these would be implemented. In particular, it is not uncommon for a drug to produce solid safety data and/or startlingly good efficacy data in phase 2 (preliminary human trials), then fail in phase 3 (clinical trials to support approval).
Even after we see the bill text, the BIO/Hagan effort must still be seen as a conversation starter. But it is a discussion well worth having.
Steven
Of possible interest to readers:
While the accelerated approval approach has been successful, it also raises a host of methodological questions. One of the best critiques is Professor Tom Fleming’s Surrogate Endpoints And FDA’s Accelerated Approval Process (Health Affairs, 2005).
Medical Device Melodrama: A Great Story With a New Plot Twist
Two years ago, FDA Matters urged FDA and Congress to review the 510(k) approval process for moderate-risk medical devices. It was recognition that medical devices are different and that the review process had not been thoroughly re-examined in two decades.I imagined tweaks, possibly substantial ones, to the 510(k) process. I also predicted that those working with the current system would be comfortable with the changes. FDA and industry have been proceeding along these lines…until last week when the Institute of Medicine (IOM) declared that the current system is so flawed that a new regulatory framework is needed.
Two years ago, FDA Matters urged FDA and Congress to review the 510(k) approval process for moderate-risk medical devices. It was recognition that medical devices are different and that the review process had not been thoroughly re-examined in two decades.
I imagined tweaks, possibly substantial ones, to the 510(k) process. I also predicted that those working with the current system would be comfortable with the changes. FDA and industry have been proceeding along these lines…until last week when the Institute of Medicine (IOM) declared that the current system is so flawed that a new regulatory framework is needed.
The FDA and industry discussions are being played out on several fronts: industry proposals, FDA proposals, and negotiations over a five-year extension of the Medical Device User Fee Modernization Act. FDA and industry both think the existing system can be improved.
They have different viewpoints. Industry wants a more predictable process that allows applications for moderate-risk devices to be submitted, reviewed and approved more quickly. FDA admits that evolving requirements and standards may be slowing reviews, but also feels the quality of company submissions is a major impediment to faster reviews.
The medical device industry has played its hand well. At their behest, Congress has sent a message to FDA: go slowly as you revise the medical device approval process, avoid mistakes, and do not create any unintended consequences.
FDA has been deft in its responses. It has talked about changes in abbreviated review processes, has proposed a new speedy “high innovation” review track, and been appropriately attentive to Congressional concerns that the process not be rushed. They have been forthright that user fees will need to increase significantly over the next 5-year period for the agency to meet its growing workload and keep pace with 510(k) reviews.
Industry is reluctant to pay increased fees, given their perception that FDA has failed to meet performance targets in the current user fee program. Industry has suggested that maybe a two-year user-fee reauthorization may be preferable to five-years, giving FDA a chance to implement reforms that would, in turn, justify the increased user fee revenue.
The back and forth discussions between industry and FDA have been heated at times, but always mixing disagreement with civility. That is not to minimize the degree of conflict or occasional harsh words. But by government standards, the two sides are working together well and there is reasonable hope of a satisfactory conclusion that will protect the interests of the American public and stimulate innovation in the medical device industry.
Enter the Institute of Medicine. This branch of the National Academy of Sciences had been commissioned by FDA to study the 510(k) approval process. Its long-awaited report was issued on July 29.
Surprisingly, IOM’s report didn’t provide any insights that would help the negotiating process. Instead, they concluded that: FDA should invest in developing a new regulatory framework to replace the flawed 510(k) medical device clearance process. An effective system could not be built on the current framework.
FDA immediately declared: “FDA believes that the 510(k) process should not be eliminated but we are open to additional proposals and approaches for continued improvement of our device review programs.” Industry, too, has a strong interest in improving, not replacing, the 510(k). They agreed with FDA’s rejection of the IOM report.
FDA and industry will continue working and disagreeing with each other, trying to reach agreement. They now have a common enemy: an IOM that insists that a perfect medical device review system should be created….while FDA and industry know that patching the existing one is the only realistic possibility.
Steven
All FDA Stakeholders Affected by Medical Device Reforms October 31st, 2010
There are so many visible, contentious FDA issues right now….that reform of the medical device approval process has received only a fraction of the attention it deserves. Other centers at FDA and non-device stakeholders need to be watching more closely. FDA Matters is. Read the rest of this entry
“No Surprise” That Medical Devices Are Under Scrutiny October 1st, 2009
Five weeks ago, I wrote a column entitled, “Re-Evaluating the Medical Device Approval Process.” It was not widely-read. I assumed it was because everyone already knew that a review was underway at FDA with more activity coming. Apparently, I was wrong. Read the rest of this entry
Re-evaluating the Medical Device Approval Process August 27th, 2009
Earlier this year, a GAO report concluded that many high risk medical devices have not been adequately reviewed. In June, the House Health Subcommittee held the first of what may be a series of hearings on medical devices. The media appears increasingly interested in medical devices and is raising more questions.
All these events are a prelude to FDA and Congress undertaking a major re-evaluation of the product approval process for medical devices. It would be a relief if FDA could diagnose and treat its own medical device problems, leaving the Congress and the media to watch. Read the rest of this entry
Is the Human Body Just An Exquisitely Intricate Machine?
In most discussions of science and medicine, there is an implicit assumption that the human body is a machine—complex and biological, but still a machine. If we could only understand all the mechanisms, processes and parts of that machine, then we could prevent and cure disease. Yet, the further we travel into the biology of life, the more complexity we find and the less certainty and predictability.“The human body as a machine” is a metaphor, not a fact. Once we accept this, FDA Matters believes we can become liberated from unrealistic expectations about medical discovery and FDA’s role as a gatekeeper for new products that benefit patients.
In most discussions of science and medicine, there is an implicit assumption that the human body is a machine—complex and biological, but still a machine. If we could only understand all the mechanisms, processes and parts of that machine, then we could prevent and cure disease. Yet, the further we travel into the biology of life, the more complexity we find and the less certainty and predictability.
“The human body as a machine” is a metaphor, not a fact. Once we accept this, FDA Matters believes we can become liberated from unrealistic expectations about medical discovery and FDA’s role as a gatekeeper for new products that benefit patients.
Medical progress is the direct result of basic and clinical research conducted according to rules of scientific evidence and proof that have been refined over several decades. Our knowledge grows and our methods of discovery improve through our nation’s support for medical research at NIH and regulatory science at FDA, as well as billions invested by industry.
Even still, we can’t consistently or logically explain why good scientific hypotheses tested in well-controlled trials often produce unimpressive clinical outcomes. Or why some medical products are clearly helpful for some patients in a clinical trial, but of no benefit to other patients who appear indistinguishable in baseline characteristics.
Researchers, medical products companies and FDA would love to know the answers to these questions. Until we do, we are powerless to explain, predict or prevent the persistent and expensive discovery failures that are frustrating patients (and investors) who are desperate for medical successes.
We imagine the failures come from the imperfection of our knowledge. This is certainly true, but not a complete answer.
For several hundred years, physicists assumed the world was a machine, a so-called clock-work universe. This was logical and worked remarkably well to explain and predict physical phenomena. Then quantum mechanics demonstrated unpredictable, random, counterintuitive outcomes in the physical world. Ultimately, quantum mechanics increased our knowledge of the physical world, but only after its uncertainty and inconstancy became part of the calculations.
Similarly, there is no clock-work biology just waiting for us to discover all the mechanisms, processes and parts. Some complex biological responses may prove to be “explainable” only through unpredictable, random, counterintuitive activity.*
This may be true of individual responses, as well. If each of us has a unique fingerprint and a unique personality, why should it be hard to imagine that we each have our own biology that can never be fully defined or predicted, even if we could identify all the unique machine-like (e.g. genetic) elements?
If the metaphor (man as machine) is incomplete--and some degree of biological response is inherently unpredictable, uncertain, unknowable, as well as individualized—then FDA’s current standards of evidence and proof are not optimum for stimulating medical discovery. Many products that would benefit patients may not reach the market.
FDA Matters believes the FDA understands this is a problem, at least at the senior management level. However, the agency currently lacks the culture or impetus to incorporate complexity, uncertainty and unpredictability into its approaches to approving medical products. Admittedly, it also operates in an environment where it is gently praised for approvals when they occur….and harshly vilified later if an unresolved or unexpected issue (i.e. uncertainty) is a source of clinical problems.
Patients, physicians, researchers and medical products companies want an environment where a higher level of patient benefit can be achieved, even at the cost of a slightly larger degree of uncertainty and unpredictability. FDA needs to accept and act on this challenge or face rising discord with those stakeholders.
Steven
* Note: there is some work specifically on how quantum mechanics may explain certain biological processes, such as photosynthesis, but the analogy here is only that random, unpredictable biological responses play a very large confounding role in biological discovery, even greater than commonly attributed. See also: “Biology faces a quantum leap into the incomprehensible” http://www.guardian.co.uk/science/blog/2010/nov/12/biology-quantum-leap
Earlier columns from FDA Matters that are related:
Post-Market Safety: Getting the Most Out of Inferences That Aren’t Proofs June 21st, 2011
In the FDA-regulated world, success is often defined as approval of a new product or indication based on two, well-controlled clinical trials. However, the scrutiny doesn’t end there. FDA’s mission includes determining whether already-approved drugs perform safely and effectively when used by large numbers of patients in routine medical practice.
To understand what happens under these “real world conditions,” FDA has expanded its post-market efforts, including development of a monitoring system (called Sentinel) that will be able to track drug usage and medical history information on tens of millions of patients. Although such information will be useful, it can only provide post-hoc inferences, not proof of causation. Even with this limitation, FDA Matters thinks developing the system is worthwhile and may provide multiple benefits. Read the rest of this entry
Scientific Reductionism and the End of Medicine December 27th, 2009
“For the last 400 years, science has advanced by reductionism … The idea is that you could understand the world, all of nature, by examining smaller and smaller pieces of it. When assembled, the small pieces would explain the whole.” (John Holland)
Have you ever heard someone accused of “reductionist thinking?” You probably will in 2010 because scientific reductionism is a critical, but rarely articulated, foundation of personalized medicine. Read the rest of this entry
When an Investigator Knocks on Your Door
The last Congress was dominated by the economy, health reform and the election campaign. Congressional oversight and investigations (O&I) never gained much traction. So far this year, appropriations and budget have dominated Washington. Not much other work has been done.FDA Matters thinks this will change soon. Without money to spend on new programs and no interest in legislating new regulations, most committees have little else to do other than O&I. As a result, FDA and FDA-regulated industries can expect a lot of attention from Congressional investigators. Even without Congressional prodding, FDA, the Department of Justice, and Inspector Generals are likely to be doing more investigations.
The last Congress was dominated by the economy, health reform and the election campaign. Congressional oversight and investigations (O&I) never gained much traction. So far this year, appropriations and budget have dominated Washington. Not much other work has been done.
FDA Matters thinks this will change soon. Without money to spend on new programs and no interest in legislating new regulations, most committees have little else to do other than O&I. As a result, FDA and FDA-regulated industries can expect a lot of attention from Congressional investigators. Even without Congressional prodding, FDA, the Department of Justice, and Inspector Generals are likely to be doing more investigations.
Despite what most FDA-regulated companies will tell you, they are not well-prepared to be investigated. When an investigator knocks on their door, they either pay too little attention or go instantly into crisis mode. Neither is likely to be appropriate or in the company’s best interest.
To find the best response, companies need to understand who’s doing the investigating and how they view the situation.
If you did something that FDA program staff or inspection/enforcements staffs considers “wrong,” then the best response is to admit it forthrightly (if true) and act quickly to undo your mistake or clarify the situation. FDA is more likely to work with you to resolve a problem if they feel you have been cooperative, honest and contrite. It always amazes me how few companies seem to respond this way and instead take a defensive posture.
It is altogether different if you are under investigation by a Congressional Committee or FDA’s Office of Criminal Investigations, the HHS Inspector General, the Department of Justice, or US Attorneys. Generally, their investigators live in a world of black and white, neatly divided between good guys and bad guys.
Unlike program staff and inspectors at FDA, it rarely occurs to these investigators that intent, extraneous events or misunderstandings might provide reasons to temper their judgments. Dealing with such nuances is not part of their job.
I saw the contrast as a legislative staffer in the Senate who also spent time with investigators. My world was painted in shades of gray; their world in black and white. Most people in FDA-regulated industries are like me. The constant search for bad guys is not part of their jobs or temperament. Few have insight or experience in dealing with investigators with a different world view.
Because Congressional, civil and criminal investigators see the world in blacks and whites, it is never a positive experience to be sitting across the table from them. All company options are likely to be bad, including public humiliation, civil liability and criminal prosecution. Exoneration is a remote possibility, even if you fervently believe you have done nothing wrong.
FDA-regulated companies can (and should) limit their exposure to such situations through systematic preparations. Companies need to be able to review and monitor their own actions at a very granular level. A level of transparency is required that makes most companies nervous. Even more difficult for corporate culture: prompt action to dismiss any employees who violate company rules and any supervisors who looked the other way. No exceptions can be made, even if it includes someone from the executive suites.
Companies that follow this path are less likely to become the target of an investigation. Even if investigated, a company that can document strict programs–prospectively initiated and rigorously enforced—will usually do much better than one promising “never to do it again.” A pre-existing company commitment to tough enforcement may be the only way to get an investigator to consider your alleged wrongdoing in shades of gray, rather than black and white.
Steven
FDA and Election 2010: Oversight and Investigations November 13th, 2010
President Obama’s election and the distraction of health reform have distracted us from the disruption that divided government imposes on FDA. With the new Republican majority, the agency will find itself buffeted by political forces that are as concerned about "scoring points" as they are about improving government. FDA Matters thinks this will have a large impact on FDA, as well as the agency’s stakeholders. Read the rest of this entry
Will the New Congress Be Good for FDA-Regulated Industries? December 19th, 2010
FDA Matters is hearing that FDA-regulated industries will benefit from the 2010 election. It is assumed that a Republican-led House and more Republicans in the Senate will benefit drug, device and food companies. After all, aren’t Republicans more business-friendly and more concerned about perceived regulatory excess?
Those saying and thinking these things may be in for a rude awakening. Even worse, they may find themselves nostalgic for the “good old days” (whenever those were). Everybody—FDA, industry, patients and consumers—is going to have a rough time over the next two years. Industry will be heard more often, but not always have the winning position. Read the rest of this entry
Public Incentives and Drug Development: More is Usually Better
A former colleague often declared: life sciences companies have no alternative to re-investing in developing more drugs, biologics and medical devices. I always thought this naïve because of its implication that life sciences research is self-perpetuating and does not need encouragement.Currently, Congress seems primed (through oversight and possibly legislation) to consider the role of companies and government in medical product development. This week, FDA Matters explores the nature and need for incentives to conduct life sciences’ research; last week’s column looked at issues surrounding the pricing of medical products.
A former colleague often declared: life sciences companies have no alternative to re-investing in developing more drugs, biologics and medical devices. I always thought this naïve because of its implication that life sciences research is self-perpetuating and does not need encouragement.
Currently, Congress seems primed (through oversight and possibly legislation) to consider the role of companies and government in medical product development. This week, FDA Matters explores the nature and need for incentives to conduct life sciences’ research; last week’s column looked at issues surrounding the pricing of medical products.
The government’s goal in incentivizing certain life sciences research is to stimulate activity that meets or resolves societal needs (e.g. drugs and devices for cancers, therapies for rare diseases, treatments for tropical diseases). Idealistically, the incentives encourage vital, new activity without providing subsidies for research that would have occurred without incentives.
The reality is different. If the rules (statutory or administrative) for receiving incentives are drawn too tightly, then many research projects will not be undertaken, losing the benefits that society would otherwise receive.
To explain this better, I have identified three broad categories of public incentives for research:
Ordinary research incentives. These are the incentives available for all corporate-supported research. These include the research and development (R&D) tax credit, access to government technology transfer programs and patent protection. For most industries, and even most life sciences research, these seem sufficient to stimulate a high-level of research investment.
Upgraded incentives. Ordinary research incentives are sometimes not enough to stimulate life science research that will benefit society. As a result, Congress has created a number of upgraded incentives for medical product development.
For example, Congress has provided partial patent term restoration for drug companies experiencing particularly long delays in receiving marketing approval. This has led to increased research investment (as well as boosting the generic drug market as part of the same legislation).
Also, Congress created the Orphan Drug Act to provide incentives for research on drugs for rare diseases/small populations. This law incorporated a number of incentives, notably up to seven years market exclusivity for any new orphan indication on a drug.
FDA also provides a number of upgraded incentives for particular types of research through its expanded access and accelerated approvals programs. User fee waivers granted to first products from new companies also stimulates research investment.
Extraordinary incentives. Sometimes even upgraded incentives aren’t enough to stimulate vitally important research. In those cases, Congress may consider incentives designed to dramatically alter the normal risk/reward/certainty calculation that usually precedes research investments.
Thus far, I can think of only one instance of extraordinary incentives. In 2007, Congress enacted a program that awards a “priority review voucher” for successful development of a new treatment for a neglected tropical disease. Owning a voucher entitles a company to ask for a priority review (6 months) by FDA of an unrelated product that would otherwise be granted a normal review (10 months). Currently, Congress is looking at legislation (S. 606) that would extend this voucher program to developers of products to treat pediatric rare diseases.
It is up to Congress to decide whether to encourage particular life sciences research beyond the ordinary incentives. When upgraded or extraordinary incentives are under consideration, the goal is stimulating substantial additional research....and the development of many new drugs that are particularly beneficial to society.
In all such situations, there is a risk that incentives will be provided to research that would have occurred anyway. My own experiences suggest that overly tight restrictions on program eligibility result in understimulatoin of needed research. When creating incentives and, also, assessing their impact later, Congress needs to take the broad view of the societal good that can be achieved by upgraded and extraordinary incentives for research.
Steven
Drug Product Pricing 101 March 26th, 2011
A thousand good deeds of the pharmaceutical and biotechnology industries have been washed away by the decision of K-V Pharmaceuticals to charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. There is an easy comparator: the same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose. Congressional and public reaction has, quite understandably, been one of outrage.
No one knows the right price for this drug, but there are ways to find out. In conversations this week, FDA Matters discovered that many knowledgeable people don’t know that there are tools to rationally evaluate and guide product pricing decisions. Read the rest of this entry
Drug Product Pricing 101
A thousand good deeds of the pharmaceutical and biotechnology industries have been washed away by the decision of K-V Pharmaceuticals to charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. There is an easy comparator: the same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose. Congressional and public reaction has, quite understandably, been one of outrage.No one knows the right price for this drug, but there are ways to find out. In conversations this week, FDA Matters discovered that many knowledgeable people don’t know that there are tools to rationally evaluate and guide product pricing decisions.
A thousand good deeds of the pharmaceutical and biotechnology industries have been washed away by the decision of K-V Pharmaceuticals to charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. There is an easy comparator: the same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose. Congressional and public reaction has, quite understandably, been one of outrage.
No one knows the right price for this drug, but there are ways to find out. In conversations this week, FDA Matters discovered that many knowledgeable people don’t know that there are tools to rationally evaluate and guide product pricing decisions.
Value/pricing analysis helps companies determine an appropriate and defensible price. Some large pharmaceutical and biotech companies have the in-house capacity. Generally, small and medium-sized companies will use external consultants or consulting firms to assure a professional, unbiased process. However, it seems clear that some companies don’t bother to undertake a sophisticated analysis prior to setting prices.
In recommending a particular price or a range of prices, the consultant or consulting firm will look at three or more approaches…and then work with the company to make judgments about “best fit” or achieving consensus among a range of possible prices. Here are three examples of the approaches a consulting firm might use:
· “Value-added” pricing. This values the company’s product (and supports a price) based on replacement or enhancement of current treatments in the same clinical category. In the case of an asthma drug, a value-added pricing approach would look at “savings” achieved by the reduction in hospital days, emergency room visits, and disability. Other system savings might be considered, such as the benefit of added compliance, the reduction in concomitant drugs, fewer side effects, etc. Any system “costs” (e.g. loss of productivity, treatment of adverse events) are also included in the model.
· “Cost plus” pricing. This values the company’s product based on the development costs and achieving a reasonable return on investment (ROI). This may include real, imputed and opportunity costs. Thus, the “cost” component is likely to be greater than the company’s actual expenditures. Pricing in this approach is highly dependent on the ROI variable and the likely timeframe before newer products or generics cut deeply into sales.
· “Comparable value” pricing. This looks at the pricing of products that have comparable characteristics or benefits, but may be in different clinical categories than the company’s product. For example, a new recombinant vaccine might be compared to the pricing increment when another vaccine was “upgraded” to a recombinant version. In the case of a unique therapy or breakthrough (e.g. a new drug for Huntington’s disease), an analogy is drawn to the most relevant situations in other treatment areas.
The analytic models are adjusted for a host of variables, such as the size of the potential market, the degree and rate of market penetration, and the likely product lifecycle. As noted, there is usually a consensus-building process where the consultant works with the company to determine a price that factors in the results of the different analyses.
Each consulting firm has its own approach, a proprietary model to distinguish their services from competing firms. These models add value and reach far beyond the basics I have described above.
Now you have an idea of how it’s done….or should be done. This analytic process should reduce objections to the pricing of a product and also prepare a company to defend its pricing decision. Controversy cannot always be avoided, but shareholders, patients, and payers are always going to respond better to companies who have backed their pricing with sound reasoning.
Steven
Disclosure: I am not affiliated with any consulting firm that does pricing analysis, nor is this a service I provide. However, if you are interested in the names of a few firms that are in this business, please contact me by e-mail at sgrossman@fdamatters.com.
FDA and Its Regulated Industries: A Cornerstone of America's Economic Future
On March 7, the Alliance for a Stronger FDA released a white paper on the far-reaching and positive economic impact of a strong FDA and the industries it oversees. The report is intended to provide interested parties, including Congress and Executive Branch policymakers, with information on FDA’s role in economic growth. A number of groups--consumers, patient advocates and industry--provided comments to the Alliance on the impact of FDA on the American economy.
On March 7, the Alliance for a Stronger FDA released a white paper on the far-reaching and positive economic impact of a strong FDA and the industries it oversees. The report is intended to provide interested parties, including Congress and Executive Branch policymakers, with information on FDA’s role in economic growth. A number of groups--consumers, patient advocates and industry--provided comments to the Alliance on the impact of FDA on the American economy.
“Most policymakers have heard that FDA-regulated industries account for nearly 25% of U.S consumer spending,” said Nancy Bradish Myers, President of the Alliance for a Stronger FDA and President of Catalyst Healthcare Consulting. “However, many have not thought about the major negative economic impact if FDA, the primary regulator of those industries–which employ millions and are net exporters of U.S. products—is not adequately funded by federal dollars.”
She added: “FDA is a regulatory agency that can help the economy expand. It is one of the reasons that industry, patients and consumers support a strong, appropriately funded FDA that has the resources to assure that our foods are safe and our biopharmaceutical, medical devices and vaccines are safe and effective.”
The Alliance for a Stronger FDA white paper, entitled “The U.S. Food and Drug Administration: A Cornerstone of America’s Economic Future” provides useful information about medical products, the American food supply, and FDA’s role in fighting bio- and agro-terrorism. It also describes some of the advantages of maintaining U.S. leadership role in the global economy and the potential costs to the domestic economy and U.S. exports if FDA falls behind.
“Food contributes nearly $1.2 trillion to our economy, or 8% of the U.S. gross domestic product. Ensuring the safety of our food supply is as essential as providing for our national defense,” said Caroline Smith DeWaal, an Alliance Board Member and Director of Food Safety at the Center for Science in the Public Interest. “Protecting our food supply is a major part of FDA’s mission, and both the food industry and consumers benefit from a strong FDA and a growing economy.”
“No agency with a critical role like FDA’s should be asked to do more, with less,” said Margaret Anderson, Vice President of the Alliance and Executive Director of FasterCures. “If we are to advance medical progress and improve patients’ lives--which will significantly bolster the US economy--we need to start making the FDA a national priority.”
The Alliance’s 180 members--comprised of consumer, patient, professional and research groups, companies, trade associations, and individuals--represent millions of Americans who support increased appropriated funding for FDA. More information about the Alliance can be found at www.StrengthenFDA.org.
The full report – The U.S. Food and Drug Administration: A Cornerstone of America’s Economic Future -- can be downloaded from the Alliance’s web site.
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WHAT OTHERS ARE SAYING ABOUT THE IMPACT
OF FDA ON THE AMERICAN ECONOMY
AdvaMed (Advanced Medical Technology Association)
“Everyday, America’s medical technology companies are developing life-saving, life-enhancing advancements in patient care. This progress doesn’t occur in a vacuum. It’s critical to patients, continued innovation and future economic growth that our regulatory processes support the next great leap forward in medical progress. That’s why we support a well-resourced FDA with well-trained reviewers who have appropriate scientific expertise.” Stephen J. Ubl, President and CEO
Alliance for Aging Research
“Over the next 30 years, there will be no greater challenge to the U.S. than dealing with the human and economic consequences of the graying of America. To improve lives and bend the cost curve of billions of health care dollars, we will need investment and innovation from the medical products industries. An effective working partnership with the FDA is essential.” Dan Perry, President & CEO
AstraZeneca
“AstraZeneca favors a well-funded and scientifically world-class FDA that has the resources it needs to bring safe, effective and innovative medicines to patients in the United States. Developing and making new medicines available not only helps improve peoples’ health, it helps grow the American economy.” Rich Fante, President, U.S. & CEO North America
Biotechnology Industry Organization (BIO)
Center for Science in the Public Interest
“Food contributes nearly $1.2 trillion to our economy, or 8% of the U.S. gross domestic product. Ensuring the safety of our food supply is as essential as providing for our national defense. It is a major part of FDA’s mission. Both the food industry and consumers benefit from a strong FDA and a growing economy.” Caroline Smith DeWaal, Director of Food Safety
FasterCures/The Center for Accelerating Medical Solutions
“No agency with a critical role like FDA’s should be asked to do more, with less. If we are to advance medical progress and improve patients’ lives--which will significantly bolster the US economy--we need to start making the FDA a national priority.” Margaret Anderson, Executive Director
Friends of Cancer Research
“Innovation – in the form of new drugs, vaccines, and medical devices – has vastly improved the health of people around the world and has thus far been a pillar supporting the US economy. Without further financial investment in the science at FDA, future innovation is put at severe risk.” Dr. Ellen Sigal, Chair and Founder
Medtronic
"The growth of Medtronic and the medical device industry is truly an American success story. To write the next chapter, we need a business environment that fosters innovation, drives job creation and supports principled collaboration between industry, government and medical professionals. A strong, fully-funded FDA is vital to creating a more predictable and consistent regulatory system, making it possible for patients to get faster access to novel medical technology." Bill Hawkins, Chairman and CEO
National Research Center for Women and Families
“As public health experts and advocates, we know that Americans depend on a strong FDA to ensure the safety and effectiveness of medical products made by companies that also produce jobs and grow our economy.” Diana Zuckerman, PhD, President
National Organization for Rare Disorders
"There are innumerable diseases and conditions for which patients are awaiting new therapies. These can only come from viable and vibrant biopharmaceutical and medical devices industries whose investments grow America and move us closer to helping patients with unmet medical needs.” Peter Saltonstall, President
Pharmaceutical Research and Manufacturing Association (PhRMA)
"America’s biopharmaceutical research companies are among the most innovative, research-driven enterprises in the world. Combined, they employ around 650,000 high-skill, high-wage men and women; and, every direct job supports nearly 3.7 additional American jobs. Our industry invests tens of billions annually in research and development. But, without a strong, science-driven, appropriately funded FDA, patients wouldn’t realize any of the benefits of the life-saving and life-enhancing therapies that our companies produce." John J. Castellani, President and CEO.