More Information to Patients in Europe? Not Really

The industry dared to be optimistic, but was disappointed. Drug chiefs were hoping for more opportunities to communicate directly with patients in Europe, as part of much-needed change to marketing and selling models. (Read more on that in the forthcoming issue of IN VIVO).

Sadly, the European Commission's pharmaceutical legislation package, presented today to the Council of Ministers and European Parliament, "doesn't make a huge difference" to information provision in the UK, according to Richard Barker, Director General of the Association of the British Pharmaceutical Industry.

The proposals allow information which "does not go beyond the elements of the summary of product characteristics," plus "related information about non-interventional scientific studies," according to EC documents published today. And this information can be disseminated only via specialist publications and websites--no active distribution allowed. "It's a pull-model," summarized Barker--in other words, just about as far from DTC as it could possibly be.

Not that DTC was what the industry was after; it knows that doesn't work particularly well anyway (and some CEOs apparently hate it with a vengeance). But a little more freedom to communicate might have been nice. So would more clarity on whether information must be vetted pre- or post-dissemination: a summary memo released prior to the full documents states that "in general information will be subject to monitoring after it has been disseminated."

The full text, though--and what was picked up in this Reuters piece--says that "monitoring should be based on the control of information prior to its dissemination, unless the substance of the information has already been agreed by the competent authorities or if there is a different mechanism in place to ensure an equivalent level of adequate and effective monitoring." [our ital.]

Hmm. Assuming that last bit means that pre-vetting can be avoided (communication may prove highly burdensome if not) the proposals at least "don't take us backwards," adds Barker. In the UK, limited information is already available to patients via sites like medicines.org.uk. Like anything coming out of the EC, the package is a compromise between opposing positions. UK and Scandinavian attitudes to patient information contrast with that of France, for example, which remains highly sensitive to any sort of direct channel between manufacturer and patient.

Patient information is just one part of this story. Pharmacovigilance and counterfeit drugs feature too--though the branded sector missed out on a complete ban on the re-packaging of pharmaceuticals, which would have crippled parallel traders. (They rely on this to re-sell drugs bought in low-priced country A to higher-priced country B.) The finalized plan, unlike earlier drafts, states explicitly that "re-packaging remains possible"--a big nod in the direction of the parallel traders' lobby.

This set of legislation is tabled as a "renewed vision" for the European drug sector. But for Barker, it represents only a very small step, albeit in the right direction. "We need to go well beyond these measures to give a real boost to an industry's that's packing up and leaving Europe," he warns.

It's not enough to "launch reflections," as the EC is doing, on ways to improve market access and boost R&D. Aggressive action is needed if Europe isn't going to slide further behind, in particular given the rise of investment in developing markets. But aggressive action isn't what the EC does--or can--provide.

And How Would You Like to Pay for That, Mr. Lechleiter?

Check please?

When Carl Icahn (whom we probably owe an apology since we thought a $70/share bid was a pipe dream) first announced that Imclone had a mystery bidder willing to fork over $10/share more than Erbitux partner BMS, he suggested that bid was subject to due diligence, but not financing.

Well, Lilly must have left its moneyclip in its other pants, because here comes the credit card. And it's too late to play credit card roulette.

Just how easy it will be for Lilly--or anyone for that matter--to tap the credit markets for a few billion dollars here or there remains to be seen. The newly passed-into-law $700 gagillion bailout hasn't exactly greased the lending wheels just yet.

Our comprehensive coverage of the deal is at Pink Sheet DAILY, where Jessica Merrill notes that Lilly "intends to finance the acquisition with a combination of cash and debt. The firm expects the debt portion to amount to $2 billion to $3 billion. With today's tight credit markets, funding deals has become far from a sure thing, but Lilly said it remains 'confident' about its ability to finance the transaction."

Lilly shareholders? Maybe not so much. True it was a particularly bleak day for the markets yesterday (with the exceptions of Imclone, Dendreon, and, probably, Campbell's Soup), but Lilly shares were taken to the woodshed, down nearly 3% on the day. (In comparison, Bristol-Myers was only down 1%, its own fall cushioned by the $1 billion cash it stands to gain from its own 17% stake in Imclone.)

If pharma's rock is the credit crisis, its hard place is the fact that it will likely need to keep spending a ton of cash to access the medicines it has failed to develop on its own. So how will Big Pharmas like Lilly reconcile the two competing realities? Maybe Uncle Sam will help.

Remember the hilariously titled American Jobs Creation Act that allowed companies to repatriate vast sums of cash at much friendlier tax rates? (Ostensibly this was to lead to job creation but in reality the cash flowed mostly unimpeded to shareholders via dividends and share buybacks.)

Pharma has already succeeded in restarting its stalled R&D tax credit, which was tucked into the bailout bill (now known by the gentler acronym TARP), perhaps it is also hard at work lobbying for another AJCA so it can bring home more cash to pay for the alliances and acquisitions it so badly needs to bolster its own R&D.

Meanwhile the debate about whether Lilly paid too much for Imclone will continue. Lilly has clearly signaled its intentions to be part of the upper echelon of oncology companies--along with just about every other Big Pharma--and what you think of Lilly's $70/share Imclone offer will probably boil down to the faith you have in Imclone's pipeline (and Lilly's ability to hang on to the next-generation EGFR inhibitor 11F8).

image from flickr user lennonisgod used under a creative commons license.

Comparative Effectiveness Compare and Contrast

Since Sen. Max Baucus introduced his latest legislative attempt to create a national center on comparative clinical effectiveness research, we’ve had some time (OK, OK, a week—it is summer, after all) to dig into the details.

With the help of our colleagues over at “The Pink Sheet,” we’ve put together a list of some of the key differences between the Baucus bill (S 3408) and previous comparative effectiveness legislation—including language in the senator’s own Medicare Part D price negotiation bill from 2007.


So here’s a little compare and contrast, as reported in this week’s issue of The Pink Sheet.”

Organizational structure: Baucus would create the “Health Care Comparative Effectiveness Research Institute” as an independent, public-private entity. Past efforts had the Agency for Healthcare Research & Quality as a central player: The CHAMP Act would have established a center inside AHRQ, and Rep. Tom Allen (D-Maine)'s bill would have established a trust fund through the quasi-government agency.

Who sets the agenda?: Research priorities would be determined by the center itself. That’s a change from the comparative effectiveness language in Baucus’ Medicare Part D price negotiation bill, under which HHS would set the research agenda. But the government would have some influence over what would be studied: the HHS secretary and NIH director would sit on the governing board.

Money, money, money: Baucus calls for appropriations of $5 million in 2009, $25 million in 2010 and $75 million in 2011. Starting in the fourth year, annual contributions would be made from the Medicare Trust Fund ($1 per beneficiary per year), revenues generated by a fee on private health insurance policies ($1 per insured person per year); and general revenues ($75 million a year). Funding would increase to $300 million a year by the year 2013, and all funding would sunset after 10 years.

By comparison, the CHAMP Act set government appropriation levels at $90 million, $100 million and $110 million during the first three years, but was not as direct in setting levels for private participation. The bill said that the private sector contribute beginning in the fourth year to bring the total trust fund amount of $375 million.

And then there’s the billion-dollar question for industry….

How will the research be used?: Baucus does not offer any specific guidance on how the information can or cannot be used by private or public payors. That’s a big change from the price negotiation bill, which clearly stated that “authorizing consideration of comparative clinical effectiveness studies in developing and reviewing formularies under the Medicare prescription drug program.”

Playing with $6 Billion: CBO Unveils Follow-On Biologics Savings Estimates

The analysts at the Congressional Budget Office have been busy little beavers. As we cautioned earlier, CBO has been actively scoring the possible cost savings of the introduction of follow-on biologics in the US through an abbreviated pathway.

The agency released the estimates June 25 and the numbers certainly will re-ignite the follow-on biologics debate. Using the Senate Biologics Price Competition and Innovation Act to evaluate savings, CBO found FOBs would save $6.6 billion in direct government spending over a 10-year period, beginning in 2009. That's real money. To read the full analysis, click here.

The $6.6 billion comes in higher than some of the lower-end estimates and at about half the amount of the higher-end estimates. Two points to consider:

Timing: Releasing the savings analysis on June 25 begs a few questions to be asked. Were the findings unveiled ahead of the July Congressional recess so they could not be acted upon swiftly by lawmakers looking for a rest? Or does the scoring have a relationship to the Medicare package, which includes the physician payment cut offset, that just passed through the House? After all, the $6.6 billion would serve as a nice bargaining chip for the physician payment fix? Or is it all a coincidence?

Although we don't believe in coincidences, we have not heard from any sources with a stake in the game that FOBs will be attached to the Medicare package, which already has its share of somewhat controversial provisions like e-prescribing and codifying the six "protected" drug classes under Medicare Part D. To read more, click here.

Still, you never know what's going on behind closed-door negotiations, especially considering the exclusive number of Congressional leaders who are crafting the legislation. But the odds are quite small that FOBs gets attached to a must-pass Democratic or Republican offering because it would require serious and immediate action from the Senate HELP and Judiciary Committees, specifically Ted Kennedy (D-Mass.), Orrin Hatch (R-Utah), Hillary Clinton (2nd Place, Democratic nominee for President) and Mike Enzi (R-Wyo.).

How Will House Leadership React: Because the Senate HELP Committee requested the CBO analysis, it is based on the BPCIA, which gives innovators a period of 12 years of data exclusivity. At this point, that's a biotech-friendly period of exclusivity. House Committee for Oversight and Government Reform Chairman Henry Waxman (D-Calif.) and House Energy and Commerce Chairman John Dingell are understood to be looking at eight years of exclusivity and less. So they would, no doubt, hold up any legislation that includes FOBs and 12 years of exclusivity. That's not to say 12 years ends up getting the axe; we're just saying there's no way it stays 12 years without a fight from Waxman and others.

Here's an interesting take from one knowledgeable source:

"It is worth considering that the starkly competing and now “switched” views coming out of the two “sides” of the industry – GPhA essentially saying the score means the current legislation is bad and needs to be fixed (presumably by the next Congress), and BIO essentially saying the score means the current legislation is good and needs to be passed by this Congress – could result in the perception of a “draw” in the clash of the titans, which begs the question as to whether there would be sufficient momentum to get this onto the Medicare package or any other vehicle during the 110^th based upon this score....Of course, stranger things have happened in this and past Congresses."

While we don't think, as of this moment, FOBs will get attached to a Medicare bill, the $6.6 billion in savings and the timing of the release is turning out to be a real bee in our bonnet. Why now? We'll continue to investigate. In the meantime, take a look at the CBO analysis. There's a lot to digest.

The Long Awaited Baucus Medicare Package

The RPM Report recently got hold of the likely Medicare package legislation that could be introduced shortly. Of course, we had to share it with our IN VIVO Blog readers. Senate Finance Committee Chairman Max Baucus (D-Mont.) sent a summary of the package offer to physicians today.

Here are some of the highlights:

1) Physician payment update: The compromise blocks cuts to the physician payment update formula, otherwise known as the sustainable growth rate (SGR), until December 31, 2009—an 18-month fix. The offer would provide a 0.5% positive update for 2009.

2) Quality: The legislation would extend the physician quality reporting initiative (PQRI), an incentive payment for doctors who submit quality measures information, for two more years. The offer would increase the PQRI bonus to 2% for 2009 and 2010.

3) E-prescribing: The legislation would provide incentives for physicians who use e-prescribing beginning in 2009. The positive incentives would be as follows: 2% for 2009-2010, 1% for 2011-2012, and 0.5% for 2013. There are also punitive measures within the bill for physicians who have e-prescribing systems but do not use them. To read The RPM Report’s story on e-prescribing, click here.

4) Kidney disease: The offer would establish Medicare payment and coverage for kidney disease patient education services furnished by qualified practitioners. The Baucus legislation says the provision is part of broader end stage renal disease (ESRD) reforms that requires the establishment of a fully bundled payment system for ESRD services by 2011.

To read a full summary of the Baucus Medicare bill, which has been under discussion for months, click here.

Iowans Fall for Obama, Will New Hampshireites?

Uh oh, ladies and gentlemen, it looks like we have a race. I don't think I was the only one stunned by Barack Obama's victory in the Iowa caucus last week. Obama has gained a well-deserved reputation as an inspiring speaker but it just didn't seem like it would be enough to convince voters that a young, one-term freshman Senator would be able to lead the country through wartime (or peacetime depending on how much of an optimist you are).

Well, apparently his words and message are enough to convince voters he's the right (wo)man for the job. In Iowa, Obama accomplished two critical things: turn out voters and have them buy his "hope and change" message. Just look at the numbers.

Democratic Party officials said almost 240,000 Iowans turned out for the 2008 Iowa Caucuses compared to 124,000 in 2004, and under 60,000 voters in 2000. In other words, an incredible turnout.

The Washington Post cited some critical numbers from the National Election Pool that election watchers should be paying close attention to. “Half of the voters who turned out Thursday night said they were looking for a candidate who could bring change to the country while just a fifth said they most prized experience in a potential nominee,” the Post reported. “Half of those change-oriented voters backed Obama in the caucuses and helped propel him to victory.”

The National Election Pool found that 57% of Democrats said they were participating for the first time: roughly 40% chose Obama over Clinton, John Edwards and the rest of the Democratic pack.

Was Iowa an anomaly or the beginning of a trend?

The answer, at the moment, appears to be: trend. There's no question that the momentum Obama seized in Iowa is carrying straight over to New Hampshire. Obama has been down by a large margin for some time due in large part to the number of New Hampshire officials and political influentials who have endorsed Clinton. He narrowed the gap significantly after Iowa, and now two polls show him ahead by double digits as the voting takes place toady.

And how will voters react to this Clinton moment the day before the primary? Will they see Bill Clinton or Ed Muskie?

Assuming the Iowa numbers hold up for the rest of the Democratic Primary season, and a Democrat is elected President, what would an Obama White House mean for US health care policy? It could be a significant departure from a Clinton II Administration.

Some political observers argue that it doesn't matter which Democrat is elected President, since a Democratic victory means a big push for health care reform, and the differences among individual plans are less important than the political impetus of a Democratic landslide.

I don't necessarily think that will be the case. You may see a lot less reforming action under Obama than you would Clinton.

After reviewing both Clinton and Obama's health care proposals, it's patently obvious which one is further along.

Hillary's universal health care proposal is much closer to policy and more comprehensive than Obama's. Clinton emphasizes choice among four options: 1) keep the plan you have 2) buy a new plan from a for-profit insurer 3) pick a plan from the options available to members of Congress through the Federal Employees Health Benefits Plan (FEHBP), or 4) choose a public plan option similar to Medicare.

The program would provide small businesses and other employers with tax credits for buying into the system to help offset coverage costs. There are other pieces, such as Health IT, electronic medical records and a pay-for-performance-like bonus system, that are included in the Clinton plan.

As noted by the LA Times earlier this year, the most obvious sign that Clinton is closest to having a universal health care proposal that could satisfy everyone at the table was an acknowledgment from the America's Health Insurance Plans (AHIP) of the proposal's possibilities. AHIP represents 1,300 US insurers and dueled bitterly with the Clinton Administration in the early 1990's over "Hillarycare," eventually derailing the universal health coverage proposal in its entirety.

This is what AHIP has to say about Hillarycare Version 2.0: They praise the employer tax credit and say Clinton's reforms may be acceptable as long as they are linked to a mandate for individuals to buy coverage. That's very different than the "Harry and Louise" response to Hillary Clinton's proposal more than a decade ago.

Obama's plan for reform looks to be more in the idea stage compared to the Clinton plan. And anyone that has dipped their toe in the political waters in Washington will tell you it's a long journey between idea and policy.

For example, Obama's program would really offer one option, the FEHBP-like choice, under his proposal. Not bad. Obama also calls for the creation of a National Health Insurance Exchange to act as a watchdog arm for Americans. Here's a description of the NHIE from Obama's website:

"The Exchange will act as a watchdog group and help reform the private insurance
market by creating rules and standards for participating insurance plans to
ensure fairness and to make individual coverage more affordable and accessible.
Insurers would have to issue every applicant a policy, and charge fair and
stable premiums that will not depend upon health status. The Exchange will
require that all the plans offered are at least as generous as the new public
plan and have the same standards for quality and efficiency. The Exchange would
evaluate plans and make the differences among the plans, including cost of
services, public."

That's a proposal that seems a lot closer to idea than policy action. The NHIE would also monitor what insurers do with their profits. The plan will "force insurers to pay out a reasonable share of their premiums for patient care instead of keeping exorbitant amounts for profits and administration."

Moreover, where Clinton's plan delves into specifics, Obama offers very general solutions to complicated issues.

On the State Children's Health Insurance Program: "Obama will expand eligibility for the Medicaid and SCHIP programs and ensure that these programs continue to serve their critical safety net function."

On enrollment into a new government plan: "Easy enrollment. The new public plan will be simple to enroll in and provide ready access to coverage."

Still, Obama has a highly respected domestic policy team, many of them ex-Clinton officials. Harvard health economist David Cutler is one of Obama's top health advisers, along with David Blumenthal, director of Harvard's Institute for Health Policy. Cutler has co-authored papers with former FDA Commissioner and CMS Administrator Mark McClellan. Here's a look at some of his papers.

Maybe most importantly when it comes to the odds on serious health care reform happening in 2009, universal health care is Hillary Clinton's issue. It's the issue where she has the most experience and the most visible political wounds to show for it. For Obama, "coverage for all" seems to be more of a classic Democratic tenet he's running on--not necessarily his issue.

Simply put, Clinton's health reform plans are in policy stage, Obama's are in idea stage. So if you're looking at which candidate is most ready to reform health care, it's Clinton, not Obama.

Regulatory Sausage Making

The old adage comparing the unattractiveness of political decision-making with sausage making may apply to Food & Drug Administration drug approval decisions in the future.

If Iowa Senator Chuck Grassley has his way, every FDA drug advisory committee may soon replicate the Avandia debate from last summer -- when the head of the new drug review office in charge of the original Avandia approval debated the head of FDA's drug safety office in an open airing of differing opinions from within the agency. My colleague Ramsey Baghdadi wrote compelling about the drama at the Avandia meeting last summer. (Click here to read the story.)

In the most recent version of what has become an annual year-end epistle to FDA on the agency's handling of the approval of Sanofi-Aventis' antibiotic Ketek (telithromycin), Grassley demands that FDA start bringing the wide range of different staff opinions on new drug applications out in the open for the advisory committee and the public to hear.

Until recently, FDA has tried to present its advisory committees with consensus positions on drug applications and scientific issues in the applications. But after investigating Ketek, Grassley finds that approach too glossy and a way to avoid public oversight of tough scientific decisions.

The Avandia meeting should be the new model. Grassley prodded FDA to adopt the same format where “FDA reviewers were allowed to express their professional opinions and recommendations regarding those drugs.” In case FDA missed the gist of his message, the senator repeated: “It is important not only that advisory committees be provided with complete and accurate data but also any differing scientific opinions and/or assessments regarding the data from FDA reviewers.”

And NDA sponsors should watch how FDA responds to Grassley's pressure. If he succeeds in opening up the FDA advisory committees to more disputes between FDA staff, he could well bring the all the blood and guts of an Iowa sausage factory to the drug review process. (See TheRPMReport.com for more coverage of the prospects, implications and background on more open debates at FDA advisory committees.)

Headline Risk: Drug Prices on Capitol Hill

Do you want to know how big the drug pricing issue will be for the rest of this year and into 2008?

Just watch the headlines and level of outrage over the next few days in twelve congressional districts following yesterday's release of Chairman Henry Waxman’s House Oversight and Government Reform Committee report on Part D prices.

Waxman rounded up a dozen representatives to sign onto the report, “Private Medicare Drug Plans: High Expenses and Low Rebates Increase the Costs of Medicare Drug Coverage” (see table). The 12 Democrats cover a geographical region from Maryland to Minnesota and Iowa, Tennessee to Vermont.

If the report can break through and dominate local news in those reasons, expect Waxman to move forward with an effort to bring the drug pricing and Part D programs back into the political spotlight, with a hearing or further request for information from Part D plans. Waxman’s oversight committee staff extracted the pricing information for the October 15 study from private plans by threatening to subpoena the information last spring. A hearing on the report was scheduled for Thursday, October 11 but was postponed.

Dennis Kucinich, one of the Part D report co-sponsors and a politician with national recognition as one of the pack of presidential candidates chasing Senators Clinton and Obama and former Senator Edwards, headlined the release of the report: “Private Medicare Drug Insurers Are Driving Costs Through The Roof.”

The biggest political vulnerabilities for the Part D plans are charges that the administrative cost of the private system is exceeding a government-administered program and that the plans are not offering seniors savings on drug costs during the coverage gap (donut hole).

Using private data and bidding information provided by 12 large Part D companies (representing 318 drug and Medicare Advantage plans), Waxman calculated that each Medicare beneficiary pays $180 a year to cover overhead and profits to administer the program: $107 for administration; $30 for sales and marketing; $43 for profits. Spread over the entire Part D beneficiary population of 24.1 million, that creates an administrative cost estimate of $4.3 billion.

The donut hole pricing may be especially timely as a political issue as the fall season marks the point at which many beneficiaries move out of the federal subsidized drug costs and into the 100% patient-pay coverage gap. The report notes that the Medicare Modernization Act called for beneficiaries to get the plans discounted prices for drugs in the coverage gap.

“Despite the requirements of the law,” the Waxman report charges, eleven of the 12 insurers which provided information to Waxman “will not pass the drug rebates they receive in 2007 through to beneficiaries in the form of lower prices at the pharmacy counter.”

Waxman estimates that the rebates on donut hole out-of-pocket expenditures by beneficiaries will contribute $1 billion in profits to the plans. The report notes that plans say that the rebate dollars are used to reduce premiums, but the report notes that several plans “conceded” that they retain a portion of rebate payments as profits.

The full report can be found here.

FDARA: Changing Drug Development in the Guise of Safety Controls

The Food & Drug Administration Revitalization Act is famously the “drug safety law”—the once-in-forty-years major overhaul of FDA authority to bring the agency’s drug safety activities back up to par with the agency’s focus on drug efficacy.

But don’t overlook the fundamental changes that the new law will impose on the drug development process. It is likely to change drastically how companies seek FDA approval and how they support marketed products with further research. Some previous analysis of incentives in FDARA can be found here.

The separate versions of the law passed overwhelmingly in the Senate (S1082) and House (HR2900) over the last four months are being forged into one bill in active pre-conference discussions.

Two former FDA commissioners see fundamental changes stemming from the FDARA tools. They pointed out two of the major changes during a September 12 briefing on drug safety in Washington, DC, hosted by American University.

Phase IV--no longer the unchallenged province of drug sponsors: Mark McClellan, MD, says Phase IV, strategic research will never be the same again. The new public-private post-marketing surveillance project that is featured in FDARA will change the dominance of Phase IV by drug sponsors.

The “post-marketing period will move out of the control of the pharmaceutical industry,” McClellan declared. McClellan was the first FDA commissioner in the George W. Bush Administration (2002-2004). He currently heads the Engelberg Center for Health Care Reform at the Brookings Institution.

Faster NDA/BLA approvals for narrow, precise indications: David Kessler, MD, stresses the need for the agency and drug sponsors to act more creatively in the initial approval process.

Kessler sees an opening for FDA to encourage sponsors to study smaller patient populations in return for faster approvals and FDARA may provide the right tool for making that implicit deal occur. FDARA offers a form of tighter safety controls through risk management plans and post-marketing surveillance that could represent a new version of conditional approval. Kessler, vice chancellor of medical affairs at the University of California-San Francisco was FDA commissioner under George H. W. Bush and Bill Clinton (1990-1997).

The impact of FDARA on Phase IV cannot be under-estimated. For over two decades, pharma has lavished resources onto Phase IV to support extended indications, improving ties to medical thought leaders, generating cost data and justifications and gaining access to large user groups. The industry has also made commitments to FDA to carry on work on issues raised by FDA during premarket review.

After the American University event, McClellan was asked by Alicia Mundy (author of Dispensing with the Truth, a book on the Fen-Phen drug interactions) about the likelihood that FDARA would increase corporate compliance with FDA Phase IV requests. Asking whether the industry would still be able to use “stall tactics” to delay Phase IV regulatory commitments, Mundy expressed the general skepticism that has grown around the FDA-agreed Phase IV work.

McClellan chose to answer the question from a broader perspective: looking more at who controls Phase IV rather than whether companies meet or don’t meet FDA commitments. He noted that the new law will jump-start a big effort in post-market surveillance and increase that amount of research on commercially marketed products. The law’s encouragement of a public-private partnership and the $25 million initial funding for the program will start a separate effort—beyond the funding and control of pharma.

McClellan looks to other stakeholders in drug treatments to provide competing funding for post-marketing research: primarily health insurers, academic centers and employers. If those groups feel that post-marketing surveillance will help to cut down unsafe or unnecessary drug use, they clearly would have an economic and quality stake in supporting studies.

While pharma’s dominance of Phase IV appears to face a FDARA challenge, another part of the new law appears to provide a surprising boost to the effort to shorten drug trials and achieve faster initial approvals.

Kessler stated the opportunity for changing drug development in a call for a deal between industry and FDA to adopt smaller trials based on genotyping and a target of smaller patient populations. “The industry is in a conundrum,” Kessler said, is it “willing to narrow the number of patients it sells the drug to?” He believes FDA may soon be in a position to create incentives to get sponsors to aim at the smaller populations.

FDA could tell sponsors, for example, that one, redesigned trial incorporating genotyping information could suffice, Kessler suggested.

Kessler, who still frequently slips into the first person pronoun when describing FDA options, said: “Let’s say we are going to allow you to do one trial and we are going to ask you to genotype everybody in that trial.” The sponsor could use data from the first half of the trial to identify a predictive gene panel. The sponsor could then apply that genetic profile to the second half of the trial to determine whether the drug has a “high degree of effectiveness.” That type of development trial could be used toward a conditional or tightly controlled approval.

FDA is already moving in that direction, asking for information on very specific patient populations and then turning that information into very tight risk management plans.

That tailored market approach, in essence, is an updated version of a conditional approval. It is likely to be used more frequently following FDARA when the agency explicitly receives authority to create risk management plans for each approved product through the REMS (Risk Evaluation & Mitigation Strategies) provisions of the law. Kessler recognizes the potential larger role for REMS.

Risk management plans under the REMS procedures “could be no more than what the agency does now or it could be a drastic change in the way the agency controls drugs,” the former commissioner said. But he predicted that FDA will use the authority expansively and REMS will be applied to a “wide array” of products.

Sponsors will be required to submit information on the level of REMS program that they believe fits their product. A clear definition of the target audience will be an important part of those submissions and are likely to become a fulcrum for future FDA approval decisions. If a sponsor can show a well-defined population and a way to make sure that the product is used on that population, the route to approval will be much faster.

(Originally posted at The RPM Report.)

Preserving the Right to Advertise—No Matter How Dumb it May Be

James Madison's Legacy?

Score another one for the lobbyists at Big Pharma and their allies on Madison Avenue: the House is poised to join the Senate in passing legislation that will put new restrictions on direct-to-consumer advertising—but without putting any moratorium on the right to advertise new products.

The House followed the Senate in bowing to concerns that giving FDA the explicit authority to prohibit DTC ads for new products raises significant Constitutional issues. So, like the Senate, the House bill will now move forward with language allowing FDA to preclear ads, to require disclaimers to prevent false or misleading promotions, and--perhaps most significantly—to levy fines for ads it deems violative.

But the moratorium idea—initially supported by heavyweights like Senator Ted Kennedy and Representative Henry Waxman—is officially dead.

Am I the only one who doesn’t see what the fuss is about?

Don’t get me wrong. We here at the IN VIVO Blog are HUGE fans of the First Amendment.

I just think this ship has already sailed. FDA may not be getting the authority to prohibit DTC for new products, but does anyone in industry seriously expect to be running massive TV campaigns for new drugs again any time soon? Why would they want to?

The Pharmaceutical Research & Manufacturers of America has already conceded the principle behind the moratorium proposals. The association’s voluntary DTC code states that, “in order to foster responsible communication between patients and health care professionals, companies should spend an appropriate amount of time to educate health professionals about a new medicine or a new therapeutic indication before commencing the first DTC advertising campaign.”

The PhRMA code does not specify a minimum waiting period. A one-size-fits-all policy would keep patients from learning important medical information for products that can be safely advertised, PhRMA says. (Oh, and you will be glad to hear the code is working just great. At least PhRMA says it is.)

At first glance, it is easy to understand why Big Pharma would still resist legislative change. After all, a three-year moratorium (as proposed initially in the House bill) enacted by Congress is a lot stricter than the voluntary code adopted by PhRMA.

Except that there really isn’t a difference. The three-year moratorium is the maximum that FDA could require. The minimum would be no waiting period at all for new drugs where FDA saw no issues with immediate DTC.

Plenty of people worry—with good reason—that FDA would err on the side of caution and limit DTC routinely, and presumably put the maximum limit on as often as possible. Sponsors, in effect, would have the burden of proving to FDA that ads would do more good than harm.

The thing is, that sounds to me like exactly the situation industry is in today. FDA may not have the explicit authority to prohibit DTC for new drugs, but they have asked for and received “voluntary” commitments by manufacturers not to advertise as a condition for approval. Sponsors could just to ignore those commitments and FDA would probably be powerless to stop them—but anyone who does that better be ready for the backlash.

And it doesn't take a broken commitment to trigger a backlash.

When an FDA advisory committee recently met to discuss the safety of erythropoiesis stimulating agents in treating cancer patients, there was palpable anger on the committee about Johnson & Johnson’s advertising of Procrit. Committee members felt that J&J's commericials implied a quality of life benefit not found in product labeling. There is no way to prove it, but my hunch is the committee would not have been as tough in its recommendations to restrict ESA labeling if they weren’t so concerned about J&J’s ads.

Then there are the broader implications of the FDA legislation itself. The DTC moratorium may be gone, but the new law will still give FDA a much stronger hand to put restrictions on the roll-out of new products. The era of the billion-dollar blockbuster launch may not be over, but those products are already far rarer than they were, and the new law will make them rarer still.

Far more common will be slow builds, where products spend a year or two on the market in limited use. Only when FDA and the sponsor agree the safety profile allows for it will products break out into broad patient populations.

So why would anyone want to run big TV campaigns for new drugs right after they reach the market anyway?

One way or the other, sponsors need to be prepared to prove that their ads do more good than harm. FDA may not have the authority to demand proof, but the agency—or frustrated members of Congress—can still put advertisers in the hot seat any time they want.

The BIO Perspective: It Out-PhRMA's PhRMA

I emailed Blog-colleague Ramsey Baghdadi last week to agree completely with his May 11 post about the security around this year's BIO event. (Even those of us who preregistered were similarly routed 3/4 around the center, by the way...) And I agree with him that some of the sessions were surprisingly more content driven than in the past: for this meeting I always wonder whether it's more presumptuous to expect to hear nothing new at the show, or to expect to hear something of merit. The 2007 edition appeared to be fine fodder for the freelance trade press, certainly, judging from the number of surprisingly pithy story pitches in my email afterward.

But BIO has in many ways ceded its claim to be hoisting the banner of innovation, and that's unfortunate. I heard second hand that one biotech industry rep -- a former PhRMA intimate -- had commented at the meeting that "BIO is more PhRMA that PhRMA ever was." With respect to follow-on biologics, for example, its initial stance has been to stall, saying Congress shouldn't link it to PDUFA reauthorization because it was too scientifically complex to resolve in that timeframe, and besides, that the health care system should not expect to see signficant cost savings from FOBs.

Or as one ex-BIO staffer said to me, "Blocking innovation is what PhRMA does, like when it tried to stop Hatch-Waxman." Where previous BIO leadership would take the heat from big companies (in part to be seen as an alternative voice to PhRMA), advocacy on FDA policies is now set by the larger companies' Washington offices. Carl Feldbaum preached the importance of political neutrality, but the partisan, hooked-into-the-White-House Greenwood team hadn't planned for a Democratic win in '06, and has to build those bridges.

That said, there's no doubt that the spirit of innovation lives on in the hearts and minds of companies, investors, and other biotech stakeholders. And it's not even that BIO's voice is the wrong voice. It's just not -- no longer -- a voice of innovation. The Emerging Companies Section -- a notion integral to the merger between IBA and the smaller ABC that created BIO way back in 1993 -- appears to be fading away. In light of its policy positions, when the organization in its role of external advocate speaks of risk-taking, it rings hollow.

Congress Is Still Open to Drug Incentives

While neither of the anti-infective incentives in the Senate FDARA bill we wrote about earlier this week appears to create a niche for a blockbuster commercial product, together the incentives show that there is still room for pharma advocates to negotiate for incentives with the Democratic Congress.

That’s an important point as potential biogenerics legislation hangs around the fringes of the progressing user fee/drug safety bill (S 1082, the Food & Drug Administration Revitalization Act).

Democratic and Republican staffers involved in the follow-on biologics debate have reported good progress on the approval pathway and safety issues for follow-on biologics. They have said publicly that they expect more difficulty around the incentive discussions.

If history is any guide, the ability of the existing innovators in the biologics category (primarily Amgen, Biogen-Idec, Genentech, Genzyme and J&J) to carve out protections for their products will determine whether follow-on biologics is added as a last-minute part of the PDUFA/drug safety package this year.

That’s how Waxman-Hatch was passed in 1984 (when Pfizer and J&J cut deals to protect some of their major in-line products) and that’s what it will take to get a follow-on biologics bill this session.

But what’s in it for me? Antibiotic incentives in FDARA

It’s not all bad news for drug developers. The Senate’s drug safety legislation emerged from that chamber on May 8th carrying some interesting drug development incentives tucked away among the added requirements for postmarket surveillance and marketing/communication controls.

We watch C-SPAN, so you don’t have to

The two most interesting incentives—which promise limited scope for faster drug reviews and longer product lives—both relate to anti-infective drug development.

The first incentive, suggested as an amendment by the odd pair of very liberal Ohio Democrat Sherrod Brown and very conservative Kansas Republican Sam Brownback, would offer a faster FDA review for any drugs of a sponsor’s choice (anything in a sponsor’s pipeline—not just anti-infectives). All a sponsor would have to do to get access to the faster review would be to develop and make commercially available a product for under-treated diseases prevalent in the developing world.

The second amendment, sponsored by Utah Republican Orrin Hatch, claims to expand research incentives for antibiotics and redress exclusivity issues created ten years ago in a previous Congressional effort to bring antibiotics under Waxman-Hatch exclusivity provisions.

The first measure, Brown said, would be built on awarding “a priority review voucher to any company that brings a neglected tropical disease treatment to market.” It derives from an early 2006 proposal from a group at the Duke Fuqua School of Business, “Developing Drugs for Developing Countries,” and proponents say it could be worth about 12 months of extra marketing time to a company: FDA is supposed to conduct priority reviews within six months compared to “the average time of 18 months” for standard FDA application reviews. What’s more, research-stage companies that earn such vouchers could sell them on to Big Pharma, creating an additional asset market that encourages investment in neglected diseases.

Skeptics argue that tying the vouchers to “priority” review—instead of patent life or market exclusivity--may not turn out to be a big incentive. A senior Merck policy executive, Ian Spatz, openly questioned the vouchers’ value shortly after the Duke proposal was published. The difference in approval times associated with standard and priority reviews is much shorter than a year, argues Spatz, and therefore much less valuable to big commercial sponsors. And major products, where a voucher might tend to be used, often qualify for priority review in their own right.

The Hatch antibiotic incentive amendment would confer five-year market exclusivity for antibiotics filed with FDA before November 1997 but not yet approved by the agency. Preliminary analysis of the provision also suggests that it would permit generic copies of some antibiotics approved before November 1997 and so-far protected from generic competition due to an obligation for the follow-on sponsor to show that all patented indications have expired.

Hatch is also calling for clearer orphan drug incentives for anti-infectives. The amendment calls for FDA to hold an open meeting to clear up what indications qualify for orphan protections, including market exclusivity. Currently, anti-infective sponsors—and even some FDA reviewers—do not know how indications are counted toward the orphan population limits. The open meeting is designed to make it clear whether a product can qualify for orphan incentives if it treats a subclass of an infection (such as pneumonia) caused by a specific pathogen.

The Hatch incentives also would offer exclusivity protections to new approvals for single enantiomer drugs with an enantiomer that was previously part of an approved racemic drug, if the enantiomer drug is in a different therapeutic class. That distinction would prevent evergreening of existing products in the same class as an existing product (we’re looking at you, Nexium) but offer an incentive for the development of enantiomer in a new therapeutic category.