Sharfstein Speaks: Is He Headed To Washington?

During a Baltimore City rally for Barack Obama on Saturday, Dan Rodricks, a host for the local National Public Radio station, WYPR, got a coveted interview with a Baltimore official who has been making national headlines.

No, it wasn’t Baltimore City mayor, Sheila Dixon, who was recently indicted for perjury and theft charges (and who, may we add, did not receive a shout-out from president-elect Obama when he addressed the massive crowd).

WYPR spoke to Baltimore City health commissioner Joshua Sharfstein, one of two finalists for the FDA commissioner job. (You can read all about that story in this week’s issue of “The Pink Sheet.”) Sharfstein was at the Obama rally in an official capacity as health commissioner, directing people to warming tents and trying to prevent hypothermia and frostbite.

And while that's certainly a good story, Rodricks also asked Sharfstein whether he would leaving Baltimore to become FDA commissioner. Sharfstein was non-committal (as would be expected), but also expressed his deep admiration for Obama, and the science-based policies that he will support as president.

We’ll let you be the judge on the meaning behind his remarks. Here’s the interview, as transcribed by us from an online recording of Dan’s show, which aired yesterday afternoon:

Dan Rodricks: Are you going to go to work in Washington? Are we going to lose you here in Baltimore?

Joshua Sharfstein: I’m fully expecting to be health commissioner of Baltimore. It’s a great job, and lots to do this year.

Rodricks: OK, because there have been all these stories in the press about Joshua Sharfstein and the Food and Drug Administration.

Sharfstein: I know, my mom sends them all to me.

Rodricks: But you’re going to be around here for a while?

Sharfstein: That’s what I totally expect.

Rodricks: What do you expect from Barack Obama….Are you expecting generally more progressive ideas coming out of the White House?

Sharfstein: Absolutely. The first thing he said is that he wants to base health policy on the science. That’s a huge shift from what we’ve had. When you look at the science, you look at what things have worked, those are the kinds of things that we’re trying to do in Baltimore. I think we can expect some support for that, because we’ve got evidence for what we are doing. ...

Rodricks: Have you felt this way before about a president?

Sharfstein: I’ve never experienced anything like this. It’s been terrific. I’ve had a chance to work on the transition some, and that’s been great. From the moment—I just remember Iowa and everything, it’s just been so exciting.

Photo credit: Reuters/Jason Reed

Following Up With Sid Wolfe (Part 2)

Washington is full of interesting connections.

Given how much people jump from job to job in DC, it’s only a bit of an overstatement to say that everybody has worked with everybody at some point in their careers.

So it should come as no surprise, perhaps, that Joshua Sharfstein, the incoming principal deputy commissioner of the Food & Drug Administration, used to work with a prominent policy figure in Washington who happens to be a staunch critic of the pharmaceutical industry.

No, we’re not talking about Rep. Henry Waxman, for whom Sharfstein worked early in his career. This is someone perhaps even less favorable to Big Pharma (if that could be possible): Public Citizen’s Health Research Group director Sidney Wolfe.

Sharfstein worked at Public Citizen as a researcher between April-August 1992—after completing his undergraduate degree from Harvard University and starting medical school. During his five months at Public Citizen, he contributed to a report on the capacity of the U.S. correction system’s ability to care for mentally ill. (One finding: states without adequate inpatient mental health facilities jailed mentally ill patients rather than providing appropriate treatment.)

In an interview, Wolfe recalled Sharfstein's stint at Public Citizen, but was careful not to give him too much praise. When asked of his impressions of the incoming FDA official, Wolfe spoke generally of the “extreme public health experience” of both Sharfstein and FDA commissioner-designate Margaret Hamburg. “I can’t remember the last commissioner with solid public health experience,” Wolfe said. (He discounted David Kessler, who as the former head of a hospital, Wolfe says, did not rise to the same level as health commissioner of a big city.)

After Public Citizen, Sharfstein went into his first year of medical school, and promptly did something rather Wolfeish: he led a student campaign urging his classmates to return free textbooks donated by pharmaceutical companies.

According to a story in the Harvard Crimson, Sharfstein set up a drop-box for students to return two textbooks donated by Sandoz, and wrote a letter to president Timothy Rothwell protesting their distribution. The protest didn’t seem to attract much support: few books were returned, and a few that were returned were stolen from the drop-box.

Wolfe and Sharfstein kept in touch, collaborating on a 1999 petition to then-HHS secretary Donna Shalala against Pfizer’s marketing practices for the antibiotic Zithromax. Wolfe and Sharfstein, who at the time was a pediatrics fellow at Boston Medical Center, accused Pfizer of launching a campaign to convince physicians to prescribe Zithromax over the “effective and inexpensive” antibiotic amoxicillin—against CDC guidelines.

They also testified at the same FDA public hearing in 2008 over the safety of cough and cold medicines; Sharfstein petitioned FDA to relabel the products as not safe and effective for children under six years. At the public meeting, Sharfstein was the opening presenter, and Wolfe spoke during the open public hearing portion of the meeting.

We're not saying that makes them bosom buddies, but it does make for an interesting Washington connection.

Sharfstein Leaving FDA: What Does It Mean? Consider the Source

The news that FDA Deputy Commissioner Joshua Sharfstein is leaving the agency broke late yesterday, via a tweet by CQ HealthBeat. If you are wondering what it means for FDA, we suggest you consider the source.

Symbolically, we love the irony of a big FDA story breaking on social media, even as industry is growing increasingly impatient for formal guidance from the agency on the ground rules on engaging in social media based marketing.

Recall that Sharfstein's tenure began with a series of letters sent to biopharma companies citing sponsored links on Google. Those letters were in the works before Sharfstein joined FDA, but that nuance didn't much matter to marketing organizations who saw the warnings as setting up social media regulation as a defining issue for his tenure at FDA.

So it does seem appropriate that the end of Sharfstein's stint at FDA was announced on Twitter.

But more important, though, is who broke the story: Congressional Quarterly. That suggests that the place to start in thinking about the implications of Sharfstein's departure is on Capitol Hill.

Sharfstein's appointment as Maryland's Secretary of Health will be formally announced tomorrow, the very day that the new Republican Congress convenes.

The announcement will be made by Democratic Governor Martin O'Malley, who previously made Sharfstein Baltimore city health commissioner in 2006, when O'Malley was mayor.

But Sharfstein's public health background is less important here than his political background. He once served on the staff of Democratic Rep. Henry Waxman and also worked for Public Citizen. It was those Democratic bona fides that catapulted him into consideration for the commissioner post in the first place--and that also scared the heck out of plenty of industry folks who worried about a sharp change in direction at FDA.

It also made him a tempting target for score-settling in the new Congress, which has declared its intention to make oversight of the Obama Administration a key priority. Waxman, in particular, never really saw eye-to-eye with Incoming Oversight and Government Reform Committee Chairman Darryl Issa, who is promising subpoenas galore in 2011.

Call it triangulation if you want, or consider it simply a tactical move to present a lower profile to a hostile Congress, but we see Sharfstein's departure means first and foremost as a change in positioning for FDA facing the incoming Republican majority in the House.

FDA Commissioner Update: Califf's Name Emerges But Is Sharfstein the Pick?

We know you've been waiting on the edge of your seat so we thought we'd send you an update. We've heard that Duke researcher Robert Califf and Baltimore Commissioner of Health Joshua Sharfstein have been tapped, at the very least, for interviews. 

In fact, multiple sources say Sharfstein may have been offered the job. But we're not quite ready to confirm that just yet. 

Califf as we understand it has the support of senior FDA officials who would be very happy if he were named FDA Commissioner. Califf knows the folks at the agency quite well. In September 2006, Duke entered into an agreement with FDA to serve as a warehouse for electrocardiograms to serve as tools for drug safety research through the Critical Path Initiative. In addition, he's served on FDA advisory committees. 

As we've said before (click here), if the Administration chose to go with a big name who was less controversial, Califf would fit that description. His ties to the drug industry would be a hindrance in the vetting process, but as we understand it, Duke has among the strictest, most transparent guidelines when it comes to running their clinical trials for drug developers. 

The choice of Sharfstein would indicate the transition knew exactly who they wanted to head the agency from the beginning. Sharfstein is leading the FDA review team for the HHS transition. We'd heard Sharfstein had encountered resistance from different stakeholder factions but clearly he's been able to overcome those concerns. 

To read the likely picks for FDA Chief Counsel and HHS General Counsel, see our previous post here. We'll let you know as soon as we find out more. 

Drug Safety 2010: Nissen Meets With FDA Leadership as the Avandia Advisory Committee Meeting Looms

The most important single event for FDA’s drug review in 2010 and possibly beyond is coming this summer: the advisory committee re-review of GlaxoSmithKline’s diabetes drug

Since passage of the landmark FDA Amendments Act of 2007, the drug approval climate at FDA has improved steadily. To view The RPM Report’s analysis on the drug approval climate, click here

It appears one potential conclusion that can be drawn is that FDA’s comfort level with the postmarket control and monitoring tools given to them through FDAAA is adding confidence to approval decisions.

But the Avandia re-review could change all that. Whether FDA chooses to pull Avandia from the market, keep the drug on the market, suspend use temporarily or further restrict its use, the agency must ensure that it does one thing: make a credible decision. Any outcome deemed to be unsatisfactory by FDA stakeholders in Congress, and the experts they listen to, puts the improving drug approval momentum in real jeopardy.

Just to recall briefly: In May 2007, a meta-analysis by Cleveland Clinic cardiologist Steve Nissen published in the New England Journal of Medicine found that Avandia (rosiglitazone) was associated with over a 40% increase in heart attack risk. The House Oversight & Government Reform Committee put together a hearing before FDA could respond to the study. In July 2007, FDA convened the Endocrinologic & Metabolic Drugs Advisory Committee and the Drug Safety & Risk Management Advisory Committee to assess Avandia’s future.

The joint committee voted 20-3 that the drug increases cardiac ischemic risk but subsequently voted 22-1 against withdrawal of the TZD. The panel meeting surfaced an “internal disagreement” between the Office of New Drugs and Office of Surveillance & Epidemiology over whether to withdraw rosiglitazone over heart attack risks.

On October 2, 2007, FDA’s Drug Safety Oversight Board voted (8-7) to keep Avandia on the market. The non-public vote was questioned by ranking Senate Finance Committee Republican Charles Grassley (Iowa) due to the lack of transparency. On November 14, 2007, FDA issued a black-box warning for Avandia warning of heart attacks. GSK agreed to conduct a long-term postmarket safety trial of Avandia compared to competitor Takeda’s Actos to confirm a higher CV risk for rosiglitazone; the trial was named TIDE. The TIDE trial is expected to be complete in 2015.

The Senate Finance Committee released a major report on February 22 bringing to light internal emails and memos related to Avandia and heightened CV risks. On February 26, House Agriculture Appropriations Subcommittee Chair Rosa DeLauro (FDA’s chief appropriator) gave a detailed critique of GSK’s RECORD study, which the company maintains supports Avandia’s safety profile.

Now FDA is scheduled to hold another re-review of Avandia, likely July 13-14.

"Congresswoman DeLauro is looking forward to the advisory committee meeting and its findings,” a spokesperson for DeLauro says. “She believes that the TIDE trial is unethical and should be halted immediately, and has urged the FDA before to remove Avandia from the market until a truly independent, science-based advisory panel can evaluate the safety and effectiveness of the drug.”

DeLauro and her staff met with FDA Principal Deputy Commissioner Joshua Sharfstein and Assistant Commissioner for Legislation, and former staffer to Rep. John Dingell, Jeanne Ireland on May 20. The topic? “Drug safety.”

DeLauro isn’t the only one meeting with FDA leadership. Nissen recently met with FDA Commissioner Margaret Hamburg and Sharfstein to make the case that the TIDE trial was unethical and that Avandia needed to be withdrawn.

The major threat to the approval environment and the current FDA review structure is that an outcome on Avandia that is viewed as lacking credibility will energize those who want to split the Center for Drug Evaluation & Research into two separate centers or offices. A split would still be a long-shot, but a possibility nonetheless.

“As far as the FDA’s organization, the Congresswoman believes that serious consideration should be given to creating two independent offices within FDA – one that would be responsible for reviewing drug applications, and another for post-market surveillance,” the DeLauro spokesperson says. “It is something she has been concerned with for awhile, and the Avandia case serves as a reminder of just how important it is to address this situation.”

Here are a few points to consider as the Avandia re-review approaches:

1) How many advisory committee members will be assembled? In July 2007, there were 23 panel members convened for the meeting. That is a large number of committee members, many of whom were given temporary voting status. The makeup of the committee will be equally important in terms of the balance between drug safety specialists and E&M committee panelists (to view the 2007 final roster, click here).

2) Will the full Actos safety data be presented? Our understanding is that FDA asked both GSK and Takeda for every shred of data related to Actos and have had the data for “months.” Whether or not those data are formally presented at the meeting will go to the heart of the credibility question whatever the committee and FDA decide to do with Avandia. The current buzz in Washington is that not all of the Actos data will be presented, but it is still too early to determine whether that will actually be the case in the end.

3) Will Nissen present? At the July 2007 meeting, Nissen did not make a formal presentation of his meta-analysis—the whole reason for the existence of the panel meeting—to the advisory committee. Instead, he sat in a chair along with the rest of the audience. Something similar happened with Sanjay Kaul, a Cardio-Renal Advisory Committee member who was barred from the advisory committee review of Eli Lilly’s anti-clotting drug prasugrel (to read The RPM Report story, click here).

4) Hamburg and Sharfstein have gone to great lengths to brand the Obama Administration’s FDA as a public health agency. The Avandia re-review represents the first major prescription drug safety, public health issue. How will they react? Hamburg has already gone to IoM for ethical and scientific guidance on postmarket studies (to read our analysis in The RPM Report, click here). Probably the best outcome for the drug industry at large would be a risk evaluation and mitigation strategies (REMS) program that controlled the use of Avandia, monitored patients on the drug, and provided FDA with valuable data on its cardiovascular risk profile. That result would validate the use of FDA’s drug safety authorities under FDAAA, hold together FDA’s current regulatory structure and keep the approval momentum going. But is that enough of a public health message for Hamburg and Sharfstein?

5) There are a number of important FDA officials who will be directly affected by the final decision on Avandia--maybe none more than the ones who will make that decision. Hamburg and Sharfstein will bear the brunt of public scrutiny around the decision. Perhaps no one will be under the microscope more than CDER Director Janet Woodcock, who concluded that Avandia should remain on the market in 2007 with stronger warnings. This is a major issue for FDA. Woodcock is held in high regard as a strong leader, effective manager, and there are few individuals at FDA who understand its operations—and runs them as efficiently—as Woodcock. While the FDA drug safety players are the same—Gerald Dal Pan and David Graham—the drug review management is different compared to 2007. In 2007, CDER Office of Drug Evaluation II Director Robert Meyer gave a public refutation of the conclusions drawn by Graham and Dal Pan that Avandia had to be withdrawn. Meyer is no longer at FDA and Curtis Rosebraugh is the current ODE II Director. However, Mary Parks was and remains the Division Director for Metabolic and Endocrine Drug Products. Both Rosebraugh and Parks will be important officials on the Avandia re-review. Lastly, CDER Deputy Director for Clinical Science Bob Temple will play a role in the Avandia decision but it is unclear exactly what kind and how big a role. Temple has presented publicly about FDA’s tough decision-making when it comes to taking a drug off the market.

There is still a lot of time before the advisory committee: much could change and there are sure to be surprises just as there were in 2007. But it would be an understatement to say there is a lot riding on Avandia.

Ideal Replacement for Sharfstein; Right Down the Hall at FDA

Josh Sharfstein's departure back to the friendly Democratic climes of Maryland left HHS management and FDA Commissioner Margaret Hamburg with a decidedly tough bill to fill.

Where do you find someone who (1) has expereince testifying on Capitol Hill, (2) does not incite more animosity from the GOP House investigators, (3) who understands the arcane inner workings of FDA recalls and enforcement authority (a current Congressional interest), (4) is viewed favorably by regulated industry, and (5) still embodies the qualities of diversity and activism espoused by the Democratic administration?

Luckily right in the commissioner's current staff. Hamburg has already recruited that individual previously and he currently holds a top position at FDA: John Taylor, Counselor to the Commissioner for the past 14 months.

Taylor was named acting principal deputy commissioner on the day of the official announcemnet of Sharfstein's departure to head the Maryland Department of Health. Taylor's first term is for 60 days.

Taylor has 20 years of working experience with FDA issues (four outside the agency working for Abbott, 2005-2007, and two with BIO, 2007-2009) and virtually a lifetime of understanding of the agency, having grown up in a family with long service to FDA.

Taylor has worked within FDA's chief counsel's office during the Bush I and Clinton Administrations (1991-1996), was a senior policy advisor to FDA Commissioner Jane Kenney. He stayed on into the Bush II administration and served in enforcement and regulatory affairs positions under Mark McClellan.

The expereince with McClellan and with former GOP Congressman Jim Greenwood (the head of BIO) gives him the type of GOP sponsors who may get him a more civil hearing on Capitol Hill than would have been been given to Sharfstein, a protege of California Democrat Henry Waxman.

Taylor is a great immediate choice. It may be hard to find someone better after 60 days.

FDA Commissioner Update: Announcement Timing Provides Clues

Comments out of the White House that an announcement is imminent on President Obama’s choice for FDA commissioner indicate the pick is someone who has already been thoroughly vetted.

Duke cardiologist Robert Califf and Baltimore Health Commissioner Joshua Sharfstein have been formally interviewed for the job by HHS Secretary-designate Tom Daschle and would appear to be the two most serious names to make the final cut (“The Pink Sheet,” January 19, 2009, p. 3).

It’s understood that Califf has the backing of Senate Health, Education, Labor & Pensions Committee Chairman Ted Kennedy (D-Mass.) while Sharfstein is being vigorously supported by House Energy & Commerce Committee Chairman Henry Waxman (D-Calif.).

“I know the President hopes in the next few days to announce a pick for commissioner at FDA,” Press Secretary Robert Gibbs said during a briefing on January 30 in response to a question regarding tainted peanut butter. To read the thoughts of our OTC friends on an agency review, click here. (For peanut-butter-jelly-time, click here.)

The timing of the announcement makes it less likely that a name to have emerged recently would be under serious consideration for the FDA post unless the individual had already been through an interview with either Daschle or White House personnel officials.

For example, former New York City health commissioner Margaret Hamburg’s name made the rounds of the Washington rumor mill over the last week. While Hamburg was a member of the HHS transition team, is a former high ranking HHS official, and could be considered for any number of health positions, it’s unclear whether she received anything more than a screening interview. To read more about Hamburg, click here.

Former FDA commissioner Jane Henney could be a strong fallback option if the administration feels Sharfstein and Califf don’t meet all of the necessary criteria for the job. Whether Henney ever went beyond the initial screening process, however, is unconfirmed.

Still, the FDA announcement could wait until the tax situation holding up Daschle’s confirmation becomes more lucid and predictable. President Obama told White House reporters he “absolutely” stands behind Daschle’s nomination for HHS Secretary.

In fact, the administration is proceeding as if the confirmation will be a forgone conclusion. Obama’s top FDA advisor in the Senate Dora Hughes is now at the White House working with the health policy group, presumably in the Office of Health Reform. Harvard economist and top Obama advisor during the campaign David Cutler is also moving to Washington to work on the administration’s reform agenda. To read more, click here.

NIH Department of Bioethics Chairman Ezekiel Emanuel is on detail to the Office of Management & Budget working with new health desk head Keith Fontenot on health reform issues. To read more about Fontenot, click here.

Emanuel, author of the health care book “Healthcare Guaranteed,” is the brother of White House Chief of Staff Rahm Emanuel.

The New Administration: More Names to Consider

We didn't wait for the election to start the speculation about who might play an important role in an Obama Administration. But now that the voters have spoken, we've heard a few more names bandied about for key posts in the new Administration.

So, without further ado, here are some additions to our prior post:

HHS Secretary:

Rosa DeLauro (US Congress): We thought Tom Daschle was sure to end up as HHS Secretary, but now we hear he may instead be leading the health care reform effort from within the White House. (You know, kind of like Hillary did in the Clinton Administration. Not exactly like that, we hope.) And we've heard that maybe Connecticut Congresswoman Rosa DeLauro (pictured) will get the job. DeLauro currently chairs the agriculture appropriations subcommittee in the House, which among other things oversees FDA's budget. She's no fan of DTC ads, sloppy overseas manufacturing, or anything that looks like overly cosy relationships between industry and regulatory. In other words, she would make a verrrrry interesting secretary for the pharmaceutical industry. The suspense on this position won't last long, so stay tuned...

FDA Commissioner:

Ezekiel Emanuel (NIH): The National Insitutes of Health's chief bioethicist has a cv that is longer than a typical issue of IN VIVO, packed with publications, books, awards and honors. The one thing not on it: his brother, Rahm, was just named chief of staff to President-elect Obama. Those family connections ensure Emanuel will be an influential figure in the new Administration; whether FDA is the right fit is a different question. Still, his involvement in addressing conflict-of-interest issues--both within NIH and in other professional societies--is likely to set the tone for how clinical research and medical education evolve in the years ahead. (FYI, the third Emanuel brother is an agent in Hollywood. That's right: Mr. and Mrs. Emanuel have one son who is a hard driving political operative, one who is a hard driving Hollywood agent, and one who is...a bioethicist.)

Jerry Avorn (Harvard): One of the pioneers in the field of pharmacoepidemiology, Avorn's post at Harvard gives him an in with the Obama health team and the Massachusetts Senate delegation. FDA is prey to internal disagreements between its clinicians and its epidemiologists, and historically the leadership has come from the clinical world. But the emphasis on drug safety and post-marketing surveillance could make someone like Avorn an attractive candidate.

Joshua Sharfstein (Baltimore Commissioner of Health): Kennedy is the traditional power broker for FDA, but it is an open question whether his health will allow him to continue to play that role in 2009. So someone like Sharfstein, who once served on Rep. Henry Waxman's staff, could be a more likely candidate since House members have a strong interest in FDA as well. And he has Steve Nissen-like drug safety credentials, having helped led the charge to withdraw pediatric indications for OTC cough/cold medicines. A pediatrician by training, Sharfstein graduated from Harvard Medical School in 1996.

David Kessler (UCSF): Yes, that David Kessler. Plenty of folks are suggesting that he wants back into government and that he could end up back at FDA. We've been telling people for more than a year the next FDA commissioner will be from the Kessler mold, so we certainly can't resist passing on the notion that it will just be Kessler himself. He recently lost his post as Dean of the UCSF Medical School--under unpleasant circumstances--so we're betting a move back East would not be unwelcome.

CMS Administrator

Judy Feder (Ex-Georgetown): Feder is also certain to play a prominent role in the Obama health team after her unsuccessful bid for Congress in Virginia. Feder's campaign was closely aligned with the top of the ticket, and though she fell far short of unseating incumbent Frank Wolf in Virginia's 10 District, she is likely to be rewarded for helping increase Democratic support for Obama in what proved to be a pivotal state for the campaign. A veteran of the Clinton Administration (she was HHS principal deputy assistant secretary), she surrendered her position as Dean of Georgetown's Public Policy Institute before launching her unsuccessful bid.

Elizabeth Fowler (Senate Finance Committee): Fowler, one of the key Democratic staffers who worked on the Medicare Part D benefit, certainly has the resume for the job: in addition to her time on the Democratic committee staff, she worked as VP-public policy at Wellpoint, as an attorney at Hogan & Hartson, and as a health services researcher with HealthSystem Minnesota. Ironically, one drawback could be the key role she played as one of the few Democratic staffers who helped draft the Medicare Modernization Act. Changes to MMA are atop the agenda of many in the Democratic Congress, and having a CMS administrator so closely tied to the 2003 law could be a problem.

Cybele Bjorklund (House Ways & Means Committee): Bjorklund, on the other hand, would be the staffer who represents the Democratic opponents to MMA still bitter about being shut out of the end of the debate that created Medicare Part D. In the House, Bjorklund has worked on legislation to undo the "non-interference" clause in Part D - including proposals to have Medicare launch its own prescription drug plan.

Kevin Concannon (Iowa Department of Human Services): Concannon is only one of many state Medicaid program directors who could be considered for positions in the federal agency. However, he bubbles to the top of the pack because: (1) He has led two state Medicaid programs, first in Maine and now in Iowa; (2) In Maine, Concannon implemented a state-wide drug discount program that withstood a court challenge from the brand name pharmaceutical industry; (3) His boss, Gov. Tom Vilsack, helped deliver Iowa for Obama (after Vilsack ended his own presidential campaign, and then supported Clinton in the rest of the primaries), and may join the administration in the Department of Agriculture; and (4) Iowa is the home state of Finance Committee ranking Republican Chuck Grassley, which would presumably help Concannon get through the Senate.

FDA's Swine Flu Czar

The Obama Administration's first decision about the leadership at FDA is paying an immediate and unexpected dividend: just over a month ago, Jesse Goodman moved up from head of the Center for Biologics Evaluation & Research to serve as the agency's acting chief medical officer.

For most in the biopharma industry, Jesse Goodman was not the obvious choice to take a senior leadership role in the Food & Drug Administration. With the exception of vaccine manufacturers, Goodman is far less known in industry than his counterpart at the center for drugs, Janet Woodcock.

But he was the logical pick for the incoming Obama Administration when it wanted an experienced hand in place in the commissioner's office, thanks to a background long on public health experience, strong academic and scientific credentials--and some good connections with the transition team. (You can read our coverage of his elevation here).

It turns out to have been a pretty darn good choice. No one knew it at the time, but a new flu virus was starting to spread in Mexico, and (as we wrote here) the agency's response to the swine flu is likely to define the perception of its new leadership.

For now, it falls to acting commissioner Josh Sharfstein to serve as the public face of FDA in responding to the threat, while commissioner nominee Margaret Hamburg starts on the confirmation process (with a Senate hearing scheduled for May 7). Sharfstein has applied what already looks like his trademark response: taking an all-hands-on-deck approach involving no fewer than seven different response teams. (Read more here).

And who did Sharfstein pick to coordinate the response? Jesse Goodman.

Talk about a no-brainer. Goodman, in addition to overseeing FDA's regulation of flu vaccine as head of CBER over the past decade, has extensive experience in government and acadmia in antimicrobial resistance and biodefense preparedness.

How perfect is Goodman for the job? Consider his presentation to the annual Food & Drug Law Institute meeting in Washington April 22--just days before US public health authorities first learned of the emerging threat. Goodman addressed a standing room only crowd eager to get a read on the direction of FDA under the new Administration.

We'll print a transcript of Goodman's address in an upcoming issue of The RPM Report, but for now we'll just note that, between a discussion of the right way to think about "safety" in the context of medical products, and a concluding discussion of FDA's role in health systems change, Goodman spent a few minutes talking about global health.

Here's what he said:

"Globalization in public health is, to me, another big threat and challenge. There's humanitarian needs and values. Disease threats are global.; they know no boundaries. We have malaria mosquito vectors in this country. There's drug-resistant malaria all over Southeast Asia. This is a global economic and a national security issue as well as a humanitarian issue.

"For example, look at the chaos that was brought on when one person flew around the country with their extremely drug-resistant TB. Look at SARS. SARS was definitely a bullet that was dodged. So we need to pay attention to these things."

Its safe to say that global health threats was not the main subject the FDLI audience was paying attention to. But 10 days later, its reassuring to know that Goodman was.

Corr Returns to HHS: Another Piece in FOBs Puzzle

Bill Corr will be Health & Human Services Secretary-designate Tom Daschle’s deputy secretary.

The position requires Senate confirmation. Corr has been an advocate of tougher government controls on tobacco, which often draws the ire of some Republicans in the Senate. As a long-time aide to key Democratic health figures on Capitol Hill (including Daschle), however, Corr’s confirmation is a formality.

In addition to working as chief counsel and policy director for Daschle for two years, Corr has valuable experience within the HHS bureaucracy, acting as an advisor and chief of staff to Clinton Administration HHS Secretary Donna Shalala. He has also been a leader of the Obama HHS transition team, catching up on the broad array of current initiatives.

From biopharma’s perspective, the most important quality that Corr brings to the new position is a familiarity and commitment to an approval pathway for follow-on biologics. Corr was Congressman Henry Waxman’s (D-Calif.) primary staffer for the Waxman-Hatch generic drug law in 1984.

Corr was a forceful advocate for establishing a clear route for quick approval of generics at the end of patent terms as a way to cut drug prices and reduce drug marketing activities – in a period when drug marketing was a pale version of the current level of promotional support.
In fact, despite the rapid success of the Waxman/Hatch legislation in creating a generics drug business, Corr was not pleased by the ability of the program to bring down drug prices rapidly.

He held a hearing two years after the enactment of the law to show that drug companies were still charging high prices. That hearing also showed the unanticipated effect of driving companies to expand dramatically their research budgets (from 8% of sales to around 12-15% of sales) to try to find products to replace products facing generic competition.

Corr won’t be able to devote the same type of focused attention to the development of follow-on biologics legislation, but he will be able to press FDA for action and he won’t need a long-time to learn the ins-and-outs of the issues. There won’t be long delays trying to discuss the philosophy of follow-on biologics at the top level of HHS.

Corr’s appointment may affect the FDA selection process in a variety of ways.
From his Congressional background, Corr shares the most with Josh Sharfstein (head of the Baltimore Health Department). They both served Waxman, though in distinctly different generations: Corr in the late 1970’s and early 1980’s and Sharfstein recently. That connection, however, could cut both ways. There may be subtle reaction against putting too many people recognized as disciples of Waxman in key positions throughout HHS. FDA watchers have already begun speculating that Sharfstein’s candidacy is losing momentum.

By temperament, Corr is closer to the Cleveland Clinic’s Steven Nissen.

Through his commitment to anti-tobacco campaigns, Corr shares a common theme with former FDA Commissioner David Kessler.

FDA's Sharfstein On Avandia: "An FDA Decision"

FDA Deputy Commissioner Joshua Sharfstein was asked repeatedly during a briefing with media: Who will make the final decision on Avandia?

His answer: "It will be an FDA decision."

In the context of the question being asked, it wasn't a seemingly helpful response. But it gets to the heart of who carries the burden when the dust settles from the two-day advisory committee review on July 13-14.

If FDA chooses to pull the drug, the agency will have to explain to patients and prescribers why the drug, which an advisory committee voted overwhelmingly was linked to increased cardiovascular risks in 2007, has remained on the market for three years and counting. One could make the argument that it's been 12 years.

If FDA chooses to keep Avandia on the market--more restrictions or not--they'll have to explain to patients and prescribers why a drug linked to increase heart attack risks is still available.

Regardless, they have to explain the decision to their overseers in Congress and the public at large.

The gravitas of that decision and subsequent fallout means there is one person at "FDA" who will indeed make the final decision on Avandia: FDA Commissioner Margaret Hamburg.

So whether or not Hamburg literally makes the decision, it's hers.

Sebelius HHS Announcement Coming Monday?

Are we there yet? Almost. 

Our understanding is that the White House could announce Kansas Governor Kathleen Sebelius as HHS Secretary on Monday. 

Given the nature of the ups and downs for the HHS Secretary search, we want to stress that things could change at any moment and we'll do our best to keep you up to date. 

It would be a remarkable turn of events for Sebelius' nomination, which appeared to be finished just one week ago. Not too long ago, the administration had settled on Sebelius for the position. To read our coverage, click here and here. 

Then, multiple people we trust on Capitol Hill said the nomination was in deep, deep trouble over the issue of abortion. Sebelius, a Roman Catholic, is understood to be pro-life but carried out pro-choice policies in her state and has links to a vocal pro-choice doctor in Kansas. Social conservatives in the Senate wouldn't allow the nomination to get through. To read our story on this, click here.   

However, it appears as though the White House decided to step in due to President Obama's personal relationship with Sebelius and desire that she fill the Cabinet post. To read our story, click here. 

The talk in town is that Nancy-Ann DeParle will be named to head up the White House Office for Health Reform. This, like everything else health, is subject to change. 

Former New York City Health Commissioner Margaret Hamburg is still in line to be tapped as FDA Commissioner and Baltimore Health Commissioner Joshua Sharfstein is expected to be named principal deputy. We stress that this arrangement could also change. 

So to summarize, assuming things remain as they are, HHS will look like this, with the possibilty of some of these candidates having dual roles in the White House: 

HHS Secretary Kathleen Sebelius

HHS Deputy Secretary Bill Corr

HHS General Counsel Bill Schultz

CMS Administrator Don Berwick

CMS Deputy Administrator David Cutler

FDA Commissioner Margaret Hamburg

FDA Deputy Commissioner Joshua Sharfstein

We would like to emphasize that, with the downfall of the Daschle nomination, the economists in the White House (Larry Summers) and at OMB (Peter Orszag) have filled the health care reform vacuum. 

We'll tell you when we hear more. 

FDA Commissioner Decision Coming Today?

A decision on the next FDA commissioner (and possibly other positions) could be made today with an announcement coming a little later.

The timing suggests someone less controversial, possibly a former government official, could be the pick in order to get through the minefield that has become the FDA confirmation process unscathed. Many FDA stakeholders have told the transition team that nominating and confirming a permanent head of the agency is of the utmost importance.

Former FDA Commissioner Jane Henney and former Office of Women's Health Director Sue Wood would likely fit that profile, although both do have issues that could raise a few questions. Henney, for example, sits on the boards of multiple health care companies. To read more, click here. Wood worked on a project related to reauthorization of the Prescription Drug User Fee Act in April 2007, which was funded in part by Pfizer. You can read it here. But we think that is not a big deal in the world of conflicts of interest. The timing, and choice of Bill Corr as HHS deputy secretary, would seem to render the possiblity of former commissioner David Kessler as less of a longshot as well. To read about Obama's choice of Corr, click on our previous post here.

On the flipside, it appears that the nomination of Joshua Sharfstein, Baltimore Commissioner of Health and FDA transition team leader, has encountered serious resistance from two factions: career FDA staff and external groups who are nervous about House Energy & Commerce Committee Chairman Henry Waxman micromanaging the agency through a former staffer. That resistance does not bode well for a candidate like Cleveland Clinic cardiologist Steve Nissen, who has been among the most outspoken critics of the agency.

Still, as we understand it, Sharfstein is down but not out.

If a decision is indeed made today followed by an announcement shortly thereafter, it would likely result in a confirmation hearing sometime in February or early March. That would be a very speedy timeline, given the historical trends.

Check back with the In Vivo Blog and The RPM Report for further updates.

OJ and Cheerios for Breakfast

A good American breakfast: a great way to start the day. And also, perhaps, a great way for a new leadership team at the Food & Drug Administration to start its tenure.

And keep in mind: It is one of the ironies of leadership at FDA that the more the public views the head of the agency as a tough, anti-industry regulator, the more ambitious the agency can be in taking on initiatives that benefit the regulated industries.

Just as a generation ago (18 years being a good regulatory generation), a new young FDA commissioner, David Kessler, used an attack on orange juice labeling to establish the tone for his tenure in the public’s mind, the new Obama Administration FDA leadership – headed in the interim until Margaret Hamburg’s pending confirmation by Deputy Commissioner Josh Sharfstein -- is going after another iconic breakfast food to flex its muscle.

FDA’s warning letter to General Mills attacking Cheerios’ cholesterol claims can be read as a message to all food and dietary supplement manufacturers that make any type of health claims on their products: hew tightly to FDA’s claims regulations and approved language, or else. FDA claims that the reference to specific percentage cholesterol lowering claims push Cheerios labeling in the realm of new drug claims.

But the agency gets more from the action against a product like Cheerios than just a message to the food industry.

Because of the almost universal brand recognition for Cheerios, any action by FDA against the product is certain to stimulate broad public comment – from amusement to agreement. It is a great way to get FDA talked about, in terms of taking an action instead of reacting to an event. The publicity can re-establish FDA in the public’s eye as a force that is willing to take on big commercial products.

This is the agency’s clearest message yet since the administration transition that things are going to work a little differently in the regulated industries than they have over the previous eight years.

General Mills uses a soluble fiber claim the agency approved years ago, but the agency says certain variations in the Cheerios labeling move it over the line. Read an analysis of the warning letter in from “The Tan Sheet.” This is just a warning letter compared to a very large seizure action against the orange juice. But even FDA is not likely to try to take Cheerios out of the hands of toddlers for a labeling issue. That would risk way too much backlash from parents.

Observers who followed FDA in the 90’s are having flashbacks to the tenure of former commissioner David Kessler, who sent a message to orange juice manufacturers that the agency would not tolerate claims that juice made from concentrate was “fresh.” In that case, the agency actually seized a huge quantity of Citrus Hill from Procter & Gamble. At the time, some former FDA officials criticized the fight with P&G as a worthless display of FDA’s power to little public benefit.

The OJ crusade did, however, set the tenure for Kessler’s term and gave him a platform and reputation of decisive regulator from which to undertake a range of initiatives at FDA – including getting user fees for drug approvals and speeding approvals of AIDS drugs.

As FDA says in its official biography of Kessler:

“Early in his tenure, he took action to protect consumers from misleading uses of the term ‘fresh’ in conjunction with processed or partially processed orange juice and tomato products, gaining himself the nickname ‘Elliot Knessler.’”

We know what you’re thinking: will the current leadership be able to earn enforcer nicknames that are anywhere near that awkward?

Suggestions from our staff: Josh Harshstein and Peggy “the Grinder” Hamburg.

Enjoy your bowl of cereal tomorrow and reflect: this strange attack on an American icon may mark the start of something good for regulated industry.--Cole Werble

While You Were Stranded

Volcano 1 -- IN VIVO blogger, 0.

Yours truly was supposed to fly to the US on Saturday for a few days of work at EBI HQ Monday-Wednesday. (OK, there were tickets to Sunday's Phillies and Flyers games involved too.)

We've heard from industry friends stranded in Vienna after EASL (looking for your liver doc? He/She's probably still listening to Mozart, drinking strong coffee and eating tiny cakes right about now). There are more serious issues, to be sure. Students stranded. Unattended state funerals. Canceled meetings and conferences. Jobs and families to return to.

The news is full of the result of the ash-cloud disruption. On Sunday the airline industry -- reportedly losing $200 million per day -- started to grumble that imposed flight restrictions were over-zealous or just plain unnecessary. How big is the impact? Well, as of this writing the popularity of the underappreciated 1990 film "Joe vs the Volcano" (as measured by IMDb) is up 70% this week.

Today, we are all Joe. Or perhaps we're all another Tom Hanks character, Viktor Navorski, the unlucky man-without-a-state who gets stuck for ages in an airport Terminal.

Stuck somewhere awful? Somewhere not-so-awful? How did the volcanic ash affect your business plans? (A question we never anticipated asking if there ever was one.) Let us know in the comments.

Meanwhile, while you were living out of a suitcase ...

• Avandia: The WSJ reported on Sunday that FDA is considering putting the brakes on GSK's Avandia v Actos (from Takeda) safety study. Quoth the Journal: "Dr. Hamburg's principal deputy, Joshua Sharfstein, said the decision on the trial "cannot be de-linked from the agency's view of Avandia," suggesting that if the trial must be halted, the agency would also consider asking Glaxo to halt sales of the drug."
• Sandoz: Novartis' generic drug unit is acquiring Oriel Therapeutics, a respiratory-focused biotech backed by New Leaf Venture Partners, Thomas, McNerney & Partners, HealthCare Ventures and CHL Medical Partners. Terms weren't disclosed.
• Elan: the Irish biopharma is exploring a spin-off of its Elan Drug Technologies business, a move that would create two publicly listed companies. Getting deja vu? The company reportedly tried to sell EDT back in 2008.
• H Lundbeck: The H is for 'how do you like them apples?' The Danish CNS company wins a round in court and generic versions of escitalopram will be pulled from its home market.
• AACR: At the conference in Washington, Amgen presented the results of a biomarker analysis of the Phase III pivotal trial for Vectibix. The company explored whether nine particular genetic mutations affected response to the drug. Patients with wild-type KRAS and NRAS genes had significantly improved progression-free survival compared to patients with mutant versions of those genes.
• M&A: Astellas says it isn't going to raise its bid for OSI Pharmaceuticals based on expanded approval for Tarceva, though due diligence is ongoing.
• NHL Playoffs. The game we missed turned out to be a solid effort from the Flyers, who might have won 8-2 were it not for the acrobatics of the NHL's finest-ever goalie, Martin Brodeur. Philly up 2-1 in the series.
  

The IN VIVO Blog Poll Results: Bye Bye Avandia

The people have spoken, and they expect a long year ahead for GlaxoSmithKline. That’s because Avandia was the run-away winner in our poll based on our purely speculative if not insanely irresponsible notion that the US Food & Drug Administration might just pull a drug to demonstrate that it is taking Congressional concerns about drug safety seriously.

It ain’t scientific, but 42% think Avandia is most likely to be pulled. And, for its worth, that’s twice as many people as think we are crazy to think this way. (See full results below.)

Frankly, we were temped to vote “crazy” ourselves, so we consider this result a bit of surprise.

We also got lots of comments—a few of the “you are crazy” variety (keep it clean, people!), but also some suggesting candidates we didn’t include in the poll. Two votes for Avelox, one for Oxycontin, and one for midrodine. Oh, and one pointing out that we should have listed Accutane for a different side effect.

So folks clearly think there is a risk here.

One final note: the polls closed before readers could digest our two most recent posts, based on our conversation with gadfly and advisory committee member Sid Wolfe. In the first, he--quite unprompted by us--predicted that Celebrex will eventually be withdrawn. In the second, he discussed his relationship with incoming deputy commissioner Joshua Sharfstein.

Celebrex only got 6% of the vote in our poll. Wonder if people feel differently today?

ESA Safety and the New, Transparent FDA

If you are interested in knowing what FDA thinks about important regulatory issues, including specific product reviews, it is time to renew your subscription to the New England Journal of Medicine.
A team of FDA officials, including Office of Drug Evaluation I Deputy Director Ellis Unger and Center for Drug Evaluation & Research Deputy Director for Clinical Science Robert Temple, used NEJM as a vehicle to announce a formal reassessment of the safety profile of erythropoeitin stimulating agents in chronic kidney disease, including an advisory committee review to consider (most likely) whether use should be limited to the minimum amount necessary to avoid the need for a blood transfusion.

The advisory committee isn't surprising; as we reported in The RPM Report last month, FDA was looking carefully at new clinical data suggesting that use of ESAs (Amgen's Aranesp, J&J's Procrit) may increase the risk of strokes in chronic kidney disease patients. And, given all the issues around safety of ESAs in oncology, an advisory committee was probably inevitable.

What is surprising is the forum to announce the plan.

But not too surprising. Unger previously used NEJM to publish a summary of the basis for approving Lilly/Daiichi Sankyo's Effient, after a long and controversial review. Former Merck drug safety head Peter Honig cited Unger's Effient editorial during an Institute of Medicine meeting on drug safety in September as a good way for the agency to explain its thinking about safety issues.

And Commissioner Margaret Hamburg and Deputy Commissioner Joshua Sharfstein announced their agenda at FDA in an editorial published by NEJM on the day Hamburg took office.

We expect a lot more pharma execs will be scanning those headlines in weeks to come.

FDA Takes Control Of Avandia Debate

Score one for FDA.


As "Avandia Week" approaches, FDA made a decision to wrestle control of the debate over the safety and efficacy of Glaxo's diabetes drug rosiglitazone by offering the media an embargoed preview of the agency's briefing documents for the two-day advisory committee meeting on July 13-14.


The decision to let reporters look at the documents early was smart, effective and stands in marked contrast to how the debate on Avandia played out in 2007.


In 2007, the meta-analysis conducted by Cleveland Clinic cardiologist Steve Nissen, which showed a increased risk of cardiovascular events linked to Avandia, was published in the New England Journal of Medicine on May 21, 2007. A few days later, a House Oversight & Government Reform hearing, led by then-Chairman Henry Waxman, was scheduled before FDA ever publicly commented on the findings. On June 6, 2007, the hearing took place.


This time around, FDA has been effective, among other media savy strategies, in granting interviews in response to the Nissen meta-analysis published in the Archives of Internal Medicine and the Medicare beneficiary study comparing Avandia to Takeda's Actos conducted by FDA drug safety official David Graham in the Journal of the Amercian Medical Association.


But allowing access to the briefing documents before they were made public was probably the best stroke yet by the agency. Reporters typically get an email from FDA that the briefing documents are made public, then they have about 10 minutes to "read" 300-400 pages of FDA's in-depth analysis and write a short piece for the wires and mainstream media news sites that capture the essence of FDA's point of view.


Instead, FDA gave journalists a full day and access to FDA deputy commissioner Joshua Sharfstein and drug center director Janet Woodcock, among other officials, to digest the briefing documents and pose questions to the agency officials. Brilliant.


There's no doubt that Nissen and Graham know how to make news. But FDA, as a whole, has been equal to the challenge in both ensuring that outside voices--and voices from within--are heard while simultaneously communicating the facts on Avandia as agency leadership views them.

The Panetta Formula

What does CIA have to do with the FDA? Not much (we hope) in the normal course of business.

But as the interest and speculation builds about the selection of the next FDA commissioner, there may be a relationship.

President-elect Obama’s selection of Leon Panetta to head the CIA is the connection. Not the man, but the nature of the choice. The CIA selection demonstrates how the Obama team is resolving appointments where there is a clash between key constituency groups. The Obama solution: find an experienced government manager above the fray.

FDA obviously doesn’t have the profile of the CIA appointment; but the position is well-recognized in government circles as one that deserves careful attention. FDA can make a lot of decisions and get embroiled in a lot of health and safety issues that quickly bubble up and catch an administration unawares.

High among the qualities that the new administration is looking for at FDA is strong leadership from a new commissioner. That was one of four qualities cited by HHS-secretary designate Tom Daschle at his January 8 confirmation hearing before Sen. Ted Kennedy’s Health, Education, Labor and Pensions. The new head will make sure that FDA decisions come from evidence and effectiveness, not ideology, Daschle said. The former Senate Majority Leader said that the agency needs strong policy, resources up to par, and coordination.

The administration appears to be looking for someone at FDA who can be sold to the public as being a strong advocate of public health, science and safety – without raising the threat of being an inexperienced crusader (“no impassioned amateurs need apply” - as one advocate for the agency says).

If the search follows that pattern, then the formula for a successful candidate will be an image of experience and unimpeachable public service credentials in someone who can be firm without being controversial. That could negatively affect two of the leading candidates: Cleveland Clinic cardiologist Steve Nissen and Baltimore City Health Commissioner Joshua Sharfstein. That will quietly please some pharma companies that have the limited goal behind the scenes in the selection of trying to make sure that anybody but these candidates gets the top FDA post.

We have been on a soapbox for nearly two years that the agency needs a fresh, forceful leader who will be perceived as tough on industry but at the same time will re-open the door for a period of increased drug development. That sounds paradoxical on the surface, but the tough regulator who is interested in drug development has occurred in the past and could be good for the industry and society. It would be a share if the new administration took the term drug safety and changed that to mean a safe and stolid agency as a way to avert the risk of headline actions.

If FDA experience and gravitas dominate the search, that does lead back to one former tough regulator and drug development advocate: former FDA Commissioner David Kessler. But he was controversial as commissioner, particularly with Republicans on Capitol Hill who faulted him as a turncoat for ostensibly changing his tone at FDA from his time as an aide to Sen. Hatch and for attacking tobacco with a vehemence. He may have a hard time shaking that reputation. He could draw more fire in a confirmation hearing than the FDA position is worth to the new administration.

We have noted previously the recent rise in speculation for another former commissioner, Jane Henney. Her name is re-emerging in a number of general press stories on the post. Henney was never controversial but also may have difficulty filling the role of the strong leader. FDA did approve RU-486 under her tenure and that may be enough to create the image of the leader focused on science and not ideology.

The interest in Henney highlights that there is a lobby to get a woman back at the head of the agency. Here is where another tie between CIA and FDA comes to light: the time for a little FDA-inology (like Kremlinology).From photo analysis and rhetoric reading worthy of the 1960’s, one potential candidate for the position gets a boost -- George Washington University’s Susan Wood. Look back at some of the early Hillary Clinton rallies and you can see Wood standing right next to Maryland Democrat Senator Barbara Mikulski. Similarly, listen to Mikulski at the HELP Daschle hearing. Mikluski is a key figure in the choice for an FDA commissioner: she views FDA as a local constituency.

From Mikulski’s point of view, Wood’s departure from a top staff position at the agency over the delay of Plan B was a sign of the inappropriate politicization of the agency. Wood’s resignation from the agency in 2005 fixed her permanently in the minds of some influential Capitol Hill figures as the emblem of integrity and public spirit that define strong leadership -- maybe that will be enough to earn her the strong, knowledgeable but non-controversial mantle that may be emerging as the formula for FDA.

Deals of the Week Takes the Rock to the Rack

It’s mid-March, which means there is nuttiness and squeaky sneakers afoot. It’s the time of year when grown men and women burn megajoules of brain power filling out NCAA tourney brackets to win a few hundred bucks and bragging rights in the office pool. We can only shake our heads at the effort expended; everyone knows it’s the person least knowledgeable about the game who always ends up winning the pot. DoTW is rather partial to powder blue... hmm... should we go with North Carolina or UCLA? What do you mean, neither team made the tournament? We have to root for another color? In the immortal words of Lear, “that way madness lies.”

It also lies in China. A front-page article in the Wall Street Journal suggests that despite the hype about boundless opportunity, there’s a growing realization that for foreign entities China's a tough place to do business. In the biopharma world, for example, compulsory licensing provisions hamstring multinationals trying to compete with state-owned drug companies. How can foreign firms really afford R&D in China if, as one law stipulates, they must pay Chinese employees at least 2% of the profit derived from their inventions -- unless the workers waive their rights?

Interesting, then, how AstraZeneca highlighted Poland and Mexico at its emerging markets confab on March 16, which followed on the heels of AZ's March 11 deal with Indian drug maker Torrent to develop 18 branded generics.

Lest we congratulate ourselves too much for being a first-world capitalist paradise, note how easily sophisticated thieves in recent months have targeted trucks and warehouses of several drug companies. Last weekend they reportedly rappeled down ropes from holes cut in the ceiling of an Eli Lilly facility in Connecticut and made off with $75 million in product. We're guessing that company execs and their supply-chain managers aren't humming this exciting tune, but perhaps they can take comfort that the strong arm of the FDA -- its office of criminal investigations -- is on the case. Sound the trumpets! Hamburg, Sharfstein, and now... Friday. Just the indications on the label, ma'am. How do you spell it again? Z-Y-P-R....

Speaking of Friday, it’s time for us to wear out some shoe leather and get on the case. All you have to do is embrace the madness associated with another edition of...

Teva/ratiopharm: When it comes to fighting for generics businesses, you don’t want Teva in your bracket. On March 18, Pfizer and the PE-backed Icelandic Actavis officially lost out to the world’s largest generic maker in the months-long war for the German firm ratiopharm, which apparently could no longer afford capital letters for its name. With this purchase, Teva catapults from nearly nothing to #2 generics player in the coveted German market. Analysts generally regarded Teva's offer of nearly $5 billion (€3.6 billion), including the assumption of $820 million (€600 million) in debt, as fair but exceeding their predictions. The acquisition is in keeping with Teva’s business development strategy; in less than a decade the Israeli giant has become the world’s largest generics market primarily through M&A, followed by rapid integration of acquired assets. (Remember Barr?) But Teva will have to execute flawlessly this time around, say analysts, given drug pricing in the German market is likely grow more uncertain in the coming year. And there’s already plenty of uncertainty thanks to the country’s new Minister of Health, Philipp Roesler, who recently announced a proposal to introduce a mandatory rebate on drugs ('The Pink Sheet' DAILY, March 10, 2010). Teva made no secret of its interest in ratiopharm from the get-go, but competitive bids from Pfizer and Actavis prompted all sorts of whispers from media and investors. Speculation only grew after Pfizer CEO Jeff Kindler was spotted in Germany at the beginning of March, much too early to be Oktoberfest-related. In its quest to become the General Electric of pharma, Pfizer is looking to diversify, especially in emerging markets, through the bolt-on acquisitions of generics players. In the hours after Pfizer’s loss to Teva became official, investors were already linking the New York drug maker to another German generics titan: Stada. -- Wendy Diller

Eli Lilly/Acrux: To bolster late-stage product offerings, Lilly this week pulled out its battle axe. Actually, it’s Axiron. On March 16, Lilly announced a global licensing deal with Acrux to commercialize an experimental underarm testosterone solution currently being reviewed by the FDA for treatment of low testosterone levels, aka hypogonadism. If approved, this would become the first testosterone as handy to use as deodorant. (Does that mean the commercial launch will be a roll-out or a roll-on? We only hope it doesn’t leave a white powdery residue. Talk about killing the mood. If it does, perhaps Lilly can bundle the product with a couple of these.) Here's the nitty-gritty: Acrux gets an upfront payment of $50 million, plus $3 million once manufacturing assets are transferred. If the FDA approves the cream, Acrux gets another $87 million and up to $195 million more in potential commercialization milestones and undisclosed sales royalties. (It’s all about the milestones.) We all know improving men’s sex lives has been a big business opportunity. Even with spiraling health care costs and increased payer scrutiny, Lilly is betting that sex will continue to sell. In explaining its decision to invest in Axiron, Lilly cited IMS data indication global sales of testosterone therapies now exceed $1 billion. -- Ed Silverman

Pfizer/Tekmira: Fresh from their own almost-March madness, Vancouverites probably weren't celebrating quite as hard this week when local firm Tekmira Pharmaceuticals teamed up with Pfizer in an RNA interference deal. (Though we're always tickled by a sighting of the RNAi beast in the biopharma wild these days.) No financial terms were discussed, but it's easy to imagine Pfizer’s CSOs and research heads being wowed by the biotech’s stable nucleic acid-lipid particle technology, which promises to solve the pesky RNAi delivery problem in a snap (or should we say SNALP). Announced March 16, the deal is the first between the two companies. But Tekmira has license agreements or collaborations with seven other biopharmas, including Merck, Roche, and Alnylam. (The latter two companies also hold equity stakes in the biotech.) Tekmira bolstered its delivery technology IP in a 2008 merger with privately-held Protiva Biotherapeutics in what was a family affair; both Canadian biotechs were spin-offs of the now defunct liposomal drug delivery firm Inex Pharmaceuticals. Of course, as Exelixis showed last week, it’s tough to create value with early stage discovery deals; you’ve also got to have a product. To that end, Tekmira is advancing two of its own: a next-generation ApoB SNALP for hypercholesterolemia that will enter Phase I trials later this year, and a preclinical anti-tumor biologic called PLK-SNALP. -- Ellen Foster Licking

AstraZeneca/University of Pennsylvania: Another week, another corporate/academic tie-up. This week the collaborators are AstraZeneca and the University of Pennsylvania, coming together to develop tau-targeted therapies for Alzheimer’s disease. As usual with these kinds of deals, financial details were light, but the arrangement includes potential royalties and milestones linked to successful clinical development. As we wrote in this November 2009 START-UP feature, academic-industry partnerships are one of the many ingredients in the R&D secret sauce as big pharmas seek to hedge their development risk and look for more externally sourced programs. AZ already has collaborations with Columbia University Medical Center in two therapeutics areas: obesity and mood/cognitive disorders. It also has a partnership with Virginia Polytechnic Institute & State University (Virginia Tech) and the Mayo Clinic College of Medicine to develop novel compounds for treatment-resistant depression. In many ways it makes sense for AZ to seek an academic partner to get access to novel AD compounds. As notable late-stage failures such as Pfizer/Medivation’s Dimebon show, there’s still considerable uncertainty in this therapeutic area. Even as companies have pursued drugs designed to disrupt the amyloid plaques that are the hallmark of AD, there’s also considerable effort to understand how neurofibrillary tangles comprised primarily of misfolded tau protein contribute to the destruction of brain nerve cells. -- EFL



Astellas/OSI: As expected, OSI officially responded to Astellas’ unsolicited $3.5 billion offer this week with a firm “nai keiyaku." (Because the last thing the biotech wanted was for its answer to get lost in translation.) Arguing that Astellas’ bid ignores the value of OSI’s cash and pipeline, the biotech instructed its bankers to look for a better deal. Apparently OSI believes the Astellas bid discounts the biotech’s financial asset portfolio, which includes cash, securities, and tax-friendly losses estimated (by OSI) to be worth $1.3 billion. Astellas gave no quarter, responding in a statement that it continues to believe in its proposed transaction and will press on with a tender offer of $52-a-share to OSI shareholders. Astellas also made good on its previous threat to nominate its own slate of independent directors at OSI’s next annual meeting. The Japanese drugmaker’s nominees include some well known biotech execs, such as Aptuit founder Michael Griffith and Alpharma board member Jill Kanin-Lovers. Investors seem confident that a white knight bid -- or a sweeter offer from Astellas -- could be in the offing. OSI’s share price quickly shot up above the initial tender price and has remained there. Assuming no other bidder emerges, Astellas will have to wait until the end of March to discover if it’s won the OSI betting pool. The tender offer expires March 31. -- Alex Lash

Basketball photo courtesy of flickr user Erik Charlton.

Badge image courtesy of the Food and Drug Administration.