Merck CEO-Designate Frazier and the Importance of Washington to Pharma

The announcement that Merck's global pharmaceutical head Ken Frazier will ascend to the CEO slot in January is hardly a shocker: he was viewed as the front-runner in a one-man race to succeed Richard Clark next year.

But this stable, planned succession is still an important marker about the climate for Big Pharma. Much will be made of Frazier background as chief counsel at Merck (he will join Jeff Kindler at Pfizer as the Lawyer-in-Chief CEO model), but we wanted to highlight Frazier's hands-on role in shaping Merck's public policy efforts throughout his career.

While Clark personally represented Merck in some of the critical events involving the health care reform debate, Frazier was very much on board with the plan -- and gave a thoughtful and compelling explanation for why Merck decided to take the risk of engaging in the reform debate during a keynote address during Elsevier Business Intelligence's FDA/CMS Summit for Biopharma Executives in December 2008.

We reprinted the full address in The RPM Report, here. But we thought Frazier's analysis of the risk of inaction was particularly compelling, and may be newly relevant as he takes over the top spot at Merck heading into the uncertain waters of a newly Republican Congress in 2011. So we've excerpted that section below.

Oh, and by the way, today is the last day to qualify for the "early bird" discount for this year's FDA/CMS Summit. In all modesty, we can't promise you will see tomorrow's CEOs today if you come to the Summit, but, as Frazier's address shows, you just might. What we can promise is that what happens in Washington continues to matter to the Big Pharma business, so you won't want to miss out on the chance to deepen your understanding of the rapidly changing public policy climate. (Click here for more on the Summit.)

Here is what Frazier said two years ago about the risk of inaction, if Merck chose not to support reform:

We understand clearly that we are entering this debate at a time when the pharmaceutical industry’s standing is low and we face challenges from many directions.

For years now, politicians, the media, and industry critics have disparaged our prices, our allegedly excessive profits, and our purportedly wasteful marketing expenditures. Most unfortunately, we have also seen critics challenge the integrity of the scientific research that is at the core of our value to patients and society.

These challenges have led to legislative proposals, here and around the world that could have serious negative impacts on our industry and on our ability to continue to innovate in the interests of patient health. In my new role overseeing the marketing of Merck medicines and vaccines around the world, I’ve seen first-hand the negative impact that some of these ideas have had.

Certainly, major health care reform action in the United States could provide a vehicle for the consideration of several harmful proposals, such as drug importation, price negotiation in Medicare Part D, and changes to the patent protection that is a necessary prerequisite to pharmaceutical innovation.

We’re also seeing these proposals at a time when Merck and other companies are facing unprecedented business challenges. The rapid and appropriate uptake of generic medicines, challenges to our patents, and setbacks in our pipelines are translating into layoffs as well as difficult research investment choices.

This is arguably the worst time for punitive government actions of the type some are proposing.

While the risks of action to us are clear, so are the risks of inaction. First and foremost, people without health insurance coverage have poorer health and, of course, reduced access to our medicines and vaccines. Those without coverage live with a day-to-day fear that most of us in this room can only imagine. It is a fear that... they are only one illness or one accident away from financial ruin or permanent disability.

If that were not enough in itself, as an industry we need to understand that until the nation reforms our health care system, including providing affordable access to quality care, the issues of access to medicines and the price of medicines will remain flashpoints in political and economic discourse. Further, more time without action will only embolden those who advocate anti-competitive approaches such as universal government delivered health care.

Stealth Comparative Effectiveness in U.S.

Are you sitting down?

The FDA is practicing stealth comparative effectiveness.

Or at least that's one of the claims to come out of a lively panel discussion that attempted to grade the regulatory agenda of the new leadership at FDA during the first day of The Pink Sheet's annual FDA/CMS Summit.

The discussion was sparked some provocative data released by the Director of the Office of New Drugs, John Jenkins, during his status report on new drug approvals. (You think he only took industry to task for submitting incomplete applications? Guess again.)

In an effort to silence critics who charge the FDA is becoming more conservative, approving fewer drugs because of its safety first initiatives, Jenkins and his team parsed applications data for the past 17 years, looking at the percentage of new molecular entities approved on first action during five-year increments. Here's what they found: NMEs with priority review did pretty well; in the most recent period, 68% of the compounds won approval, up from 58% in the previous time period. But for standard NME applications, the story was far different: 70% of the medicines were not approved on first action.

Calling this failure rate "a huge burden on the system," Jenkins challenged the drug industry to do some more navel gazing. "The industry needs to ask itself why the failure rate [for standard NMEs] is so high," he says.

It's not like execs haven't been asking that question. Perhaps the only issue causing more hand-wringing than comparative effectiveness is the lack of R&D productivity in the industry. That's why folks at Lilly, for instance, are aiming to expand their highly publicized Chorus experiment, which aims to identify earlier--and more cheaply--whether new compounds even have a shot at becoming viable medicines.

Mary Pendergast, the former deputy FDA commisioner and now President of Pendergast Consulting looked at Jenkins' data and came up with one possible answer that takes some heat off the industry. Maybe one reason it's so much harder to get the second, third, fourth, and fifth drugs in a class approved these days stems from FDA's desire to see superiority data. "What we are seeing--and should be paying attention to--is [the emergence of] stealth comparative effectiveness," she claims.

Note that current laws stipulate explicitly that FDA does not have a mandate to practice comparative effectiveness. But in Pendergast's view, the emphasis on superiority data "is a tiny loophole that the FDA is driving a truck through."

Better that than a camel through the eye of a needle, eh?

Image courtesy of flickrer (cup)cake_eater used with permision through a creative commons license.

FDA's Jenkins Sounds Off on Incomplete NDAs

Earlier this week, FDA issued a Refuse to File on Merck-Serono's cladribine application, meaning the agency felt the NDA was sufficiently lacking that it didn't want to begin a review yet.

The topic of Refuse to File letters came up today at Windhover's FDA/CMS Summit. No drug or company was mentioned by name, however; the discussion was prompted by an audience question and warmly embraced by FDA Office of New Drugs director John Jenkins.

FDA, Jenkins said, has for the most part held up its end of the bargain created 17 years ago by the industry-FDA agreement known as PDUFA. "Most of the time," he said, FDA reviews drugs in the appropriate time window. But too often industry is developing the drug on FDA's review clock. If industry really expects FDA to stick to that model, he said, applications need to be complete so that questions won't arise just before the PDUFA date because information is still coming in from drug sponsors during the review process.

If industry's complete response letters were released, "would you make sure your application is complete before you submitted it?" asked Jenkins. Would senior executives wake up to regulatory realities? Jenkins suggested that companies "do the math some time." Delaying an NDA a few months until it's truly complete can save double that time on the extended review process that results from incomplete applications.

We can't be sure why FDA dinged Merck-Serono's application; that information is, for now, secret. In a recent feature about potential orally available multiple sclerosis therapies we duly noted that Merck Serono's chances with its first-to-NDA oral therapy cladribine weren't a 'slam dunk'. The drug's efficacy looks great in one Phase III trial in relapsing remitting MS patients, and side effects in this therapeutic space are navigable, for sure (just ask Elan and Biogen Idec). But that's just one trial, as we also noted, and the drug hasn't been tested against an active comparator. It was never clear how FDA would react to that.

FDA's rebuttal might have been due to some other deficiency unrelated to the lack of a confirmatory Phase III trial (which will take the company many more than just a few months, given the time frames for large MS trials). For its part the company has stated that it will get together with FDA as soon as possible to discuss the issue and other Phase III studies of oral cladribine which are ongoing in different forms of MS.

image from flickr user wilhei55 used under a creative commons license

The Long Campaign for FDA Commissioner (Part 3)

We’ve given you some of our thoughts on the candidates for FDA commissioner in the new Administration in several recent posts (here and here). Today, though, we tackle a bigger question: Why would anyone possibly want this job?

For a position that may well be the most thankless job in health care, an awful lot of people seem to be lining up to be the next commissioner of FDA.

With all the problems at FDA right now—a deeply underfunded agency with a nearly impossible mandate to protect the nation’s food and drug supply—it’s a wonder anyone would want to lead the agency. Add the prospect of contentious Senate confirmation hearings, a low public opinion of FDA, and a constant threat of whistleblowers, and you don’t exactly have your dream job.

But that hasn’t prevented people from wanting to be the next FDA commissioner. While much of the campaigning is taking place behind closed doors, some candidates are choosing to be a bit more vocal. Those individuals tend to fall into two categories; the Peter Rost Category of Candidates and the Steve Nissen/David Kessler Category of Candidates.

On one extreme end of the campaigning spectrum, there’s former Pharmacia marketing executive Peter Rost. As the Pfizer whistleblower over off-label promotion of the human growth hormone Genotropin, Rost is probably the one commissioner candidate that scares the bejesus out of pharma (or at least Pfizer) more than Nissen. Or he would if he had any chance of actually landing the job.

Not only is Rost openly campaigning, he is, in his words, “running” for FDA commissioner as though it’s an open Senate seat. Rost’s personal blog is now dedicated to his campaign run, and he has successfully solicited letters of endorsement from Sen. Sherrod Brown (D-Ohio) and Rep. JoAnn Emerson (R-Mo.).

On the other end of the spectrum, we’ll cite David Kessler. Kessler isn’t sending out press releases expressing his interest in the commissioner post, but he is indicating he’d be open to the job through public appearances. As we reported in an earlier blog post, when asked for his ideal profile for an FDA commissioner, Kessler essentially described himself.

The same goes for Nissen. While Nissen may be the last thing that anyone in industry wants in an FDA commissioner, he is laying out an agenda that sounds quite reasonable: more money for FDA, an end to the missed user fee deadlines, and restoring integrity to the agency. Indeed, we laid out in an earlier post why we think FDA commissioner Nissen wouldn't be the worst thing that ever happen to industry.

But even Nissen recognizes the challenges facing the next commissioner, and has publicly questioned whether anyone would want the job. Here’s what he said at FDC-Windhover’s FDA/CMS Summit last week:

“The problem is in the current environment, getting anybody confirmed looks like it could be really tough. You know what the last bunch of commissioners have gone through. You have to be a masochist to want to do that, and there aren’t a lot of people who would want to do that.”

Of course, in saying someone would have to be a masochist to want the job, Nissen didn’t mention whether he was a masochist. Knowing what we know about Nissen, we'd have to say yes.

image via run100miles.com. nothing particularly masochistic about that, eh?

The Long Campaign for FDA Commissioner (Part 1)

Who says Election season is over?

To us, it sounds like the campaign to run the Food & Drug Administration is just heating up. That, at least, is our impression after FDC-Windhover’s FDA/CMS Summit for Biopharma Executives last week.

Exhibit A: The presentation by Cleveland Clinic cardiologist Steve Nissen. As always, Dr. Nissen was energetic, engaging and pretty frank in calling ‘em as he sees ‘em. But we heard some things that sounded a bit different than we have heard before.

As “The Pink Sheet” reports, Nissen—who, with some understatement, observed that he is no fan of the Prescription Drug User Fee Act—nevertheless declared that, having taken the money, FDA needs to follow through by offering an answer in the agreed upon timeline. That isn’t going to make Nissen any new friends at FDA. In fact, Office of New Drugs Director John Jenkins spoke earlier in the day and delivered a passionate defense of the agency’s review performance in 2008, and he sat stoically through Nissen’s presentation.

But some of the industry folks in the audience must have been whispering “amen” under their breaths. Our unscientific read of conference attendees is that they are sympathetic to the challenges facing FDA’s review group, and wary of piling on the agency at the this moment in its history—but they agree with the principle that, given how much they pay in user fees, FDA ought to be able to give them an answer on time.

And we bet one company in particular agrees: Nissen singled out Lilly’s overdue application for prasugrel (Effient) as both a case where the agency owes the sponsor an answer one way or the other. (If you haven’t followed the ins and outs of that application, start here.)

Nissen also declared that FDA’s “core” problem is that it lacks the resources to fulfill its mission—and stressed his view that a strong, credible FDA commissioner will help the agency secure those resources from Congress. (Oh, and he let slip that he had just been up on Capitol Hill himself that morning, chatting with some of his friends in Congress.)

Last but not least, Nissen endorsed the call for a fixed-term for the FDA commissioner (five or six years) to help depoliticize the agency’s leadership. That, to our surprise at least, has become a rallying cry for Big Pharma in the weeks since the election, with CEOs like Schering-Plough’s Fred Hassan and Pfizer’s Jeff Kindler highlighting the idea in appearances before investors.

In other words, Nissen sounded a lot like someone hoping to win some industry support for the FDA job...or at least convince some people not fight too hard to block him.

When asked specifically whether he has his eye on the commissioner post, his answer was “no comment.”

But it was what Nissen said afterward that really caught our attention. “I am going to stay engaged in these issues,” he said. “As an advocate for patient safety, I want to be engaged one way or the other.”

One way or the other? Hmmmm.

Nissen then went on to describe his ideal candidate, and frankly, it sounded an awful lot like him. First, a commissioner should be a physician, “because if you haven’t ever taken care of patients, you don’t really have the necessary perspective.” Check. Nissen is a cardiologist at the Cleveland Clinic.

Next, the commissioner should be a “good scientist,” because the FDA has to be a science-based organization, and “decisions have to be made upon the basis of evidence.” Check. Nissen is deeply involved in pharmaceutical research with a host of drug companies (the money from which, he is quick to point out, is donated to charity without a tax break for him).

The FDA commissioner also “ought to know something about statistics.” Check. As Nissen was quick to point out, he presented a series of statistical slides during an advisory committee meeting in July on the approval standards of diabetes drugs.

Finally, he said, FDA needs a commissioner who is “passionate about the public interests.” Check. Nissen’s critics may question whether he is also passionate about his elevating his public profile, but there is no question that he has patients’ interests at heart in his self-appointed position as a drug safety advocate.

Now, bear in mind that just because Nissen (and others) are campaigning for the job doesn't mean that a pick is anything close to imminent. The new Administration has a lot on its plate, and (as we wrote here) FDA isn't even close to the top of the list. But the Obama team knows a thing or two about long campaigns, so we say: bring it on.

Tomorrow: a word from (and about) some other candidates at the FDA/CMS Summit…

--Michael McCaughan and Kate Rawson

Pharma Must "Continue to Take Chances" In Policy World: Merck VP's Parting Advice

We recently had the chance to talk at length with Merck VP-global public policy Ian Spatz (right, not actual size) about the challenges and opportunities facing industry amid the changes in Washington.

We've always found him to be a very thoughtful analyst of the policy climate, and a very forward thinking advocate for ways to improve that environment. (That's why, among other things, he is a regular on the program at FDC-Windhover's FDA-CMS Summit, and will be speaking there on Friday.)

Come January, Spatz will be leaving Merck after 15 years. He hasn't announced his future plans, but he expects to remain involved in health policy. We'll be publishing a full transcript of the interview in The RPM Report soon, but we wanted to share with you some of his thoughts about his time at Merck:

Q: You have been with Merck for 15 years. What are you proudest of, having been associated with Merck over that time? Is there something that stands out?

Ian Spatz: I've been very proud of all the time I've spent here. Merck's a great company, has great people, has done amazing things and will continue to do amazing things. And in terms of my own time here, I would pull out the about five years of work towards encouraging passage of the Medicare prescription drug benefit. It certainly was the most difficult challenge. I had enormous support from my colleagues and from everyone at Merck. It was a unique time when we had the opportunity to work with Medco and learn about pharmaceutical benefit management, and it was enormously gratifying to see legislation passed and be successful and to see so many seniors be able to get prescription drug coverage, including my own mother. So it was both professionally and personally very satisfying.

Q: You also were with Merck through the whole Vioxx period. What if any lessons are there from that experience for Merck or the industry as a whole?

Spatz: Vioxx was certainly the most difficult experience during my time at Merck. There's a little bit of distance between now and when that happened, but there's still more distance needed to fully reflect on it.

The lesson that we took away from that time was that we – at least, speaking personally – had overestimated the level of trust that existed out there in our science and in our company. The fact that people could believe the things that many of them did believe about Merck after that was very difficult for me to accept, given the people who I know at Merck who were involved in Vioxx, who made decisions related to it, knowing the kind of commitment that they've had and have to patient safety and patient care. That was the most difficult thing, to see that people could believe things about us that I know are not true.

Q: Knowing that you'll be leaving Merck in January, what things do you hope to see the company do in the future? What is your advice to your colleagues as you move on to bigger and better things?

Spatz: My area of expertise has not been science, marketing, manufacturing, or any of those areas. It's been public policy. So my advice– if it's valuable at all, it's valuable in that area. My advice is to continue to take chances, to continue to engage not only with our friends, but our critics, to continue to develop proposals and to study those proposals and to debate those proposals that are going to address the very real problems that exist out there for patients and for the pharmaceutical industry.

To the extent that there are challenges and controversies, my advice is to continue to work to address those. We've learned a long time ago, it's just not simply enough to try to explain them or tell people they're not true. When there are legitimate concerns out there, we need to do something about them, and that's been what I've tried to encourage here at Merck.

That's the advice I'll give, and I really believe that that will continue to be the company's philosophy.

DotW: Barely Hanging On

Ruh Roh, Reorge! The news on Wall Street is grim--just one year after closing at an all-time high of 14,164.53, the Dow dropped another 679 points yesterday to close at its lowest level in 5 years. (In case you're keeping track it's down nearly 40%.) The losses have driven the now not-quite-so-fabulously wealthy to therapy as they seek help for "sudden loss syndrome," a condition we're pretty sure isn't in the latest DSM manual but may well be by the time the fifth edition is released in 2012.

While the biopharma world has been relatively insulated from the turmoil on Wall Street--compared to other industries, most Big Pharma and Big Biotech aren't highly leveraged and have low debt to capital ratios--it certainly isn't immune. (We'll have more to say about this in the upcoming IN VIVO.)

Word is that a certain Big Pharma that went shopping this week had a difficult time lining up its debt financing. It got it--but at a higher rate than it would have a few months back.

It will be interesting to see how Genentech fares given the protracted crisis. Roche still hasn't officially responded to the company's last "no", and some analysts speculate that the Swiss pharma won't be able to finance the deal on favorable terms. Even so, the $89-a-share offer price looks a whole lot better this week than it did just seven days ago. As of Thursday evening, Genentech's shares slid below $80 thanks to general weakness in the market and news that Avastin in combination with partner OSI's Tarceva didn't improve outcomes in lung cancer patients.

Certainly smaller biotechs and specialty pharmas are having troubles. The Danish biotech Genmab announced Wednesday that it's stopping research on zanolimumab and cutting 101 jobs. AtheroGenics, meanwhile, revealed it was filing for Chapter 11, while Mylan's CEO spent much of the week trying to soothe its nervous nellies (also known as investors) after the company's stock price plunged on concerns that the company was too highly leveraged.

Are you inured to the negative news or barely hanging on? Either way, it's time for your weekly ray of sunshine...


Eli Lilly/ImClone: Oh Carl, behave. We admit it--sometimes activist shareholders do add value. ImClone certainly came out smelling like a rose this week. Lilly was, indeed, the mysterious (though not dark and handsome) suitor courting the oncology-focused biotech. In a bid that defies logic, the pharma agreed to cough up $70-a-share or $6.5 billion for the bragging rights to ImClone's interesting but risky early stage pipeline. As we reported in the Pink Sheet Daily, the deal calculus likely wasn't based on the value of ImClone's lead product, the EGFR antagonist Erbitux. After all BMS owns 73% of the rights to the product in the US, while Merck KGaA owns 90% of Erbitux in Europe. But as we all know, it's now de rigeur to be an oncology player if you're a Big Pharma--witness the recent moves of GlaxoSmithKline and Pfizer to that effect. Certainly, Lilly was woefully lacking in this arena, especially in the area of targeted biologics. But Lilly is also paying a premium for a pipeline of drugs that could face stiff competition from rivals that are further along in development. Catherine Arnold, of Credit Suisse, noted in an October 9 report: "We question the magnitude of the pipeline's potential, especially when one considers how crowded the oncology space is becoming (particularly for the mechanisms in question) and the increasingly conservative US regulatory market." Ouch.

Eli Lilly/Dicephera: Lilly had smaller fish to fry this past week as well. Late on Oct. 3, it announced a deal with privately-held Deciphera Pharmaceuticals to gain access to the start-up's preclinical B-Raf kinase inhibitor program. Under the terms of the agreement, Lilly and Deciphera will collaborate in four different project areas with Lilly getting exclusive worldwide rights to any products developed as part of this collaboration. In return, Deciphera will receive an undisclosed upfront payment and two year's research funding and may also receive up to $130 million in potential development, regulatory and sales milestones for each of the four project areas. (Deciphera is also entitled to royalties on sales if any products actually make it to market.) "This collaboration is further evidence of Lilly's ongoing commitment to oncology research," said Dr. William W. Chin, M.D., vice president of discovery research and clinical investigation for Lilly. (Funny, we thought it was evidence of desperation based on a missed user fee deadline for prasugrel and negative news associated with Byetta. Oops, sorry--that was ImClone. Undoubtedly Lilly would say Deciphera is about accessing innovation.)

Summit/The Lilly TB Drug Discovery Initiative: We hope you haven't overdosed on Lilly. This week's feel-good tie-up is a co-development agreement between the UK biotech Summit and the Lilly Tb Drug Discovery Initiative, a public-private partnership created by guess who. Under the deal's terms, the Lilly initiative gains an exclusive license to Summit's early stage, novel compounds in the developing world and will shoulder future research and development costs. In exchange, Summit retains all rights to these compounds for the treatment of TB in the developed world, as well as all other potential indications. In addition, the biotech will have access to the data generated by the initiative and can use it in future sub-licensing agreements. As we noted in the Pink Sheet Daily, that's great news for Summit--someone else pays for development of its drugs, but it still has commercial rights in parts of the globe where patients can actually pay for the meds. In all seriousness, scourges such as TB and malaria exact an enormous toll on the inhabitants--especially children--of developing nations. But market incentives are lacking and that's made it tought to get biotechs interested in taking on drugs for these global health targets. As Chris Earl, CEO of Bio Ventures for Global Health (BVGH) told START-UP, "Even if you made the drugs [for global health] as cheap as possible, the patients still don't have any money." Partnerships like the Lilly TB initiative and the Bill and Melinda Gates Foundation (which we profile in the October issue of START-UP)--as well as novel mechanisms like priority review vouchers--are starting to provide those necessary incentives. Hopefully other companies will follow Summit's (and Lilly's) lead and do well by doing good.

Biolex/OctoPlus: In case you thought we were gilding the Lilly, fear not. (We can't afford the precious metal on our salaries here at IN VIVO Blog.) In the non-Lilly universe, Biolex and OctoPlus also made some noise, expanding the scope of their existing partnership concerning the Dutch company's Locteron. OctoPlus and Biolex have been involved in co-development of the Hep C drug, currently in Phase IIa trials, since 2005. With this latest agreement, Biolex now takes full responsibility for development and commercialization of the drug, funding the work out of the $60 million Series D financing round it recently closed. Octoplus will receive an upfront fee of $11 million, potential milestone payments totaling $138 million, royalties on future Locteron sales, and an equity stake in Biolex of up to 3%. (OctoPlus also retains commercial manufacturing rights to Locteron--just in case you were wondering.) The deal could be Biolex's ticket to a positive change of luck: the firm tried and failed in an attempt to go public in 2007, and Locteron could be the late-stage product it needs to validate its lemna-based LEX technology and attract other big pharma partners.

Mediceo/Alfresa: The merger mania that infected Japanese pharmas such as Takeda and Daiichi now looks to be hitting the wholesale sector in that country. This week, Mediceo Paltac Holdings and Alfresa Holdings, the ichi-dai and ni-dai Japanese wholesalers, struck a $2 billion stock deal to better cope with falling prices and tough competition. Hit by government-mandated cuts for medicines, increased use of generics and loss of negotiating power as hospitals and pharmacies form new ties, the distributors hope to gain bargaining power by creating a dominant industry leader. As part of the deal Alfresa will swap one of its shares for 4.15 shares in Mediceo, according to a release.

Image courtesy of Flickr user azrainman via a creative commons license.

Waiting for Sentinel: The Active Surveillance Revolution is Coming Soon

It sounds like the Food & Drug Administration is about ready to unveil its plans for a national active surveillance network, dubbed Sentinel. (Though hopefully that will be the only resemblence to the meanies in The Matrix.)

This long-discussed project was given a big push by the drug safety law enacted in 2007. The potential implications are truly revolutionary for biopharma companies—displacing the drug sponsor from its historic role as the center of the information flow about its own products.

The potential implications are one thing. The real implications will depend heavily on how the program is implemented—and by whom.

The new law directs FDA to set up a public-private partnership to help build an integrated national database of pharmacy claims, and develop the tools for analyzing signals to make regulatory decisions.

The law doesn’t say what role the pharmaceutical industry should or should not have in the system, how the agency should decide what signals to communicate publicly, or whether the claims data should be used for more than just safety assessments and made available to support other forms of research or even formulary decisions.

It is a safe bet that former Commissioner Mark McClellan will be involved; he championed the idea during the latter stages of the FDA legislative debate. In fact, the agency would really like to hand at least some of the project off to the newly formed Reagan-Udall Foundation chaired by McClellan but Congress has complicated that by prohibiting FDA from transferring funds to the Foundation.

The law does include some timelines and deliverables that mean the agency needs to get moving—something that regulators are eager to do anyway.

“Sentinel is a program you will be hearing about very soon,” FDA Commissioner Andrew von Eschenbach told the Food & Drug Law Institute annual meeting March 26.

How soon? Well, all we can say for sure is that it will be a month sooner than it was the last time we heard von Eschenbach discuss the idea, during an address to the National Press Club at the end of February.

But we do know a bit about where the agency is likely to be heading. Here are some “principles” that Associate Commissioner for Policy Jeff Shuren—who is the agency’s point person on Sentinel—outlined during Windhover’s FDA/CMS Summit in December. Shuren stressed that these are his personal thoughts.

(1) Scientific Credibility: Sentinel must win the “trust and confidence of patients, medical community, industry and other stakeholders.”

(2) Integrity: “The management structure and data analysis of this new system could be insulated from undue influence, whether by stakeholders or the political process.”

(3) Inclusiveness: “Stakeholders should have the opportunity to provide input into the standards and processes used by the system.”

(4) Transparency: “Protocols and study results should be made available to the public.”

(5) Privacy Protection and Data Security: This is “of paramount importance.”

Those principles seem hard to argue with.

Not everything is so simple, however. Shuren raised just a couple of the tough questions FDA and other stakeholders need to wrestle with.

For instance, there is the question of standards for interpreting safety signals in the Sentinel system. “When and with what level of confidence, can conclusions be drawn from the data?” Shuren asked.

“Even if we do not develop standards for such decision making—and it would be truly a challenging and controversial undertaking—we at least need to realize that there are likely different levels of confidence or certainty under which to make decisions regarding the treatment of a single patient versus formulary or coverage determinations versus decisions to change a product’s labeling," Shuren said. Which in turn raises the question: what access should FDA grant to the Sentinel data for other entities, like the Medicare agency or private payors, to support coverage decisions?

Those are the types of questions where most in industry would agree the right answer is worth waiting for.

The Hope and Challenge of Personalized HealthCare

"Industry should take on the burden of showing the value of new technologies in terms of relative costs and benefits to the Federal government."

That was one of Hoffmann-La Roche Inc. CEO George Abercrombie’s key points in his address on Personalized Healthcare during Windhover's FDA/CMS Summit for Biopharmaceutical Executives December 6. (You can read more about the Summit's various talks elsewhere on the IN VIVO Blog--here, here, here, and here--and in the upcoming issue of The RPM Report.)

"It is our fault if we allow Federal programs and other insurers to view each advance in personalized healthcare as merely adding the costs of an additional test to their program without taking into account the health and economic benefits of prevention, safer health interventions and more effective health outcomes," Abercrombie said.

He offered an example from Roche's own experience, the commercial failure of AmpliChip, the first FDA approved micro-array. "Even though the FDA cleared it, many insurers declined to cover it because its utility was considered experimental, investigational, or unproven. Others declined to cover it because its clinical value has not been established."

If industry does its part, Abercrombie said, government needs to do its part too. "Even if the new therapy results in additional costs to the Federal government in the short term, the government should still provide premium reimbursement for these products if a case can be made for coverage based on the relative benefits to patients and the product saves the government money over the long term."

An example? How about Roche's once-monthly bisphosphonate ibandronate (Boniva), marketed to treat osteoporosis.

"Biochemical markers of bone turnover in patients with osteoporosis are reliable indicators of successful treatment as early as three months after start of bisphosphonate therapy," Abercrombie says. "Adoption of inexpensive testing, combined with pharma therapy should be embraced by the Government to control costs and improve individual patient outcomes."

Unfortunately, "payers have decided to cover bone mineral density screenings after one to two years of bisphosphonate therapy."

"We believe early feedback and positive reinforcement from biochemical markers of bone turnover in patients with osteoporosis could encourage responders to continue to take their medicine regularly. Likewise, if the bone turnover markers show that a patient is a non-responder; their physician should have that information available in deciding whether to change the patient’s bisphosphonate therapy or discontinue therapy, even if it hurts Roche’s market share."

All in all, sounds like a company willing to put its money where its mouth is.

If you missed Abercrombie's keynote address at the FDA/CMS Summit December 6, you can read it here.

Finding Common Ground on Off-Label Promotion

There were plenty of highlights at the FDA/CMS Summit last week. Our colleague Roger Longman already shared his, singling out shrinking violet Steve Nissen and the decidedly less sexy, but critically important, discussions about reimbursement and drug development.

For anyone worried about the boundaries between scientific exchange and off-label promotion, though, the highlight had to be the discussion between First Assistant US Attorney Michael Loucks and former FDA Chief Counsel Dan Troy (now with Sidley Austin, LLP). And since virtually every pharmaceutical and biotech company with products on the market is under investigation somewhere, shouldn’t everyone be worried about that topic?

On paper, the face off promised plenty of fireworks. Troy has been a passionate advocate of First Amendment rights throughout his career, and maintains that the recent climate of prosecution of marketing practices is chilling scientific exchange. Loucks’ Boston office has spearheaded most of the biggest investigations in the area.

But a remarkable thing happened. Instead of a shouting match, there ensued a lively discussion of the policy issues underlying off-label promotion cases—and several points of agreement that could serve as a basis for moving the debate forward.

The first point of agreement was one of philosophy. Troy was the first political appointee at FDA in the Bush Administration, so you know where he is coming from . But here is something you may not have known about Michael Loucks: “I am, believe it or not, a conservative Republican,” he said.

“I think the government ought to be, consistent with the rules, out of people’s pocket books and lives,” Loucks said. “However, if you have a set of rules that requires taking certain actions when you market a product, that set of rules has to be applied equally across the board.” Dan Troy couldn’t have put it better himself.

The more important points of agreement, though, came in discussion of the topics raised by moderator John Bentivoglio (King & Spalding).

Troy has been pushing FDA to issue guidance clarifying permissible forms of scientific exchange, starting with a policy governing dissemination of peer-reviewed medical journal articles that discuss off-label uses. The topic is so controversial that House Oversight & Government Reform Committee Chairman Henry Waxman announced an investigation of the guidance before FDA finished drafting it.

Loucks agrees with Troy that FDA guidance would be useful in this area. He even offered a new idea: having FDA create some form of advisory opinion process, modeled on a program already in place for the HHS Inspector General. Such a system would allow sponsors to ask FDA for clearance before conducting some activity that they worry might expose them to liability for off-label promotion.

Loucks also agreed with Troy’s position that dissemination of truthful, non-misleading scientific information should not be criminalized, even if it is about an off-label use. There has to be “something else” in the case, Loucks said—like an illegal inducement to a doctor, or evidence that the information was false or misleading.

The two also agreed on one other thing: the issues surrounding off-label promotion encompass more than prosecutors and manufacturers. Payors, prescribers and patient groups all have a stake—and strong beliefs—as well.

Look for lots more coverage of the current state of off-label promotion policy in The RPM Report in December.