Biotech Manufacturers Face a Challenging 2008

The new year begins on a note of optimism. A major breakthrough in stem cell research promises to open the door to new biomedical research opportunities. The drawn-out Congressional debate over user-fee reauthorization and drug safety regulation is over, and most parties seem satisfied with resulting compromises. The vaccine industry is experiencing a resurgence after years in the doldrums, with important new vaccines on the market and more under development. And unlike many previous years, the US Food and Drug Administration (FDA) had a confirmed commissioner for all of 2007 and relatively stable leadership.

Jill Wechsler

Manufacturers will be busy in coming months as they face continued scrutiny of safety signals, pressure to discover important new treatments, and push back on high prices for medical products. Some of the leading policy issues on the table for 2008 include:

• Implementing FDAAA. The legislative wrangling is over, and now the lawyers are in charge of deciphering what members of Congress really intended for many complex and contentious portions of the FDA Amendments Act. There is considerable uncertainty about how and when manufacturers will have to file Risk Evaluation & Mitigation Strategies (REMS), especially for high-risk drugs already on the market. FDA has to clarify a process for tracking and enforcing compliance with Phase 4 study commitments. And new requirements for registering a greatly expanded range of clinical trials and trial results present a substantial challenge for FDA and the National Library of Medicine.

FDA Deputy Commissioner Janet Woodcock indicated that a REMS may not be required for all drugs, in discussing Food and Drug Administration Amendments Act (FDAAA) at a Food and Drug Law Institute conference in November. The agency will use its REMS authority "judiciously," she commented, noting that too many restricted drug distribution programs could increase confusion, harm patients, and "decrease access to the therapy."

• Safety slowdown? While implementing new programs, FDA faces the challenge of demonstrating that it has not become overly gun-shy about approving new drugs for market. New drug approvals were down last year, as were the number of new molecular entities coming to market. Manufacturers complain that the agency is issuing more approvable letters that demand additional trials and testing before final approval, and that many approvals carry narrower indications. Black box warnings seem to be proliferating, as well as agency safety alerts and advisory committee reviews of safety issues for certain drugs and drug classes.

Delays in launching new products can make a serious dent in manufacturer business plans, while the emergence of postmarket safety issues can be disastrous for marketed products. FDAAA provides FDA with additional tools for assessing product safety before and after approval, but the political rhetoric about manufacturer malfeasance is sure to continue in this election year.

• Attack on drug pricing. The Medicare Part D drug benefit has significantly increased government payments for drugs, intensifying public scrutiny of prices, especially for costly biotech treatments. For example, high expenditures for anemia-fighting erythropoietin sparked Congressional investigations and led to a curb on Medicare reimbursement for the drug.

The desire to reduce the nation's prescription drug bill continues to fuel the campaign to grant the government authority to negotiate drug prices for Medicare Part D plans, for curbs on drug advertising, for more disclosure of manufacturer prices, and for greater access to low-cost generic drugs. To further this last goal, Congress will continue to seek a pathway for FDA to approve follow-on biologics. The legislators decided to drop such a proposal from FDAAA, but generic makers have not let up efforts to resolve the issue, and projections of large cost savings from biosimilars is likely to keep it on the front burner in the coming year.

• Push for comparative effectiveness analysis. Efforts to determine appropriate prescribing and pricing of medical treatments stand to benefit from comparative effectiveness reviews of medical procedures and products. Better information on what medical treatments work best for certain patients could reduce inappropriate drug utilization, avoid unnecessary or harmful procedures, and support a more efficient and less costly healthcare system. These possibilities are boosting support for a larger government role in assessing medical treatment effectiveness, while health plans and payers also are demanding more evidence that medical products are cost-effective as well as safe and effective medically.

The challenge for drug and biotech manufacturers is to focus such analysis on how medicines compare to alternative medical and surgical procedures, and to avoid using comparative assessments to control costs or to deny coverage for innovative products. Even if a study indicates that a drug may be less effective for many patients, there should be room to prescribe that product for a smaller patient population that may benefit.

• Revising patent policy. Congressional leaders seek to enact sweeping patent reform legislation that its supporters believe will better protect intellectual property and bring US policy more in line with that of other nations. Software and IT firms support the legislation as likely to reduce their exposure to endless litigation, but biotech and pharmaceutical companies fear a serious erosion of patent protection and reduced value for patent awards.

A main issue is a proposed post-grant review system that allows re-evaluation of patents after they are awarded, but could create considerable uncertainty about the value of biotechnology patents and expose the system to abuse. Difficulties in reaching compromise on these issues has delayed legislative action, but key members of Congress will seek to finalize the bill this year.

• Spurring innovation. In order to bring new therapies to market more efficiently, FDA is working with industry to develop new methods for testing and assessing drug safety and efficacy. The agency's Critical Path Initiative encourages public–private partnerships to develop new biomarkers, assess drug quality issues, and explore new approaches for ensuring product safety. An important project aims to improve methods for assessing liver toxicity in preclinical testing. FDA recently launched a collaboration with Duke University Medical Center to streamline clinical trial operations through electronic data standards, updating review board policies, and establishing accreditation program for clinical investigators and research sites. Other initiatives aim to improve assessment of medical product bioequivalence and for complex drug product characterization.

FDA also continues to promote new approaches for ensuring drug quality in the US and abroad. The International Conference of Harmonization is finalizing guidelines to help manufacturers establish quality systems based on an integrated approach to quality risk management. Companies that adopt Quality by Design and good risk management strategies stand to gain from reduced postmarketing oversight of manufacturing changes and less intensive plant inspections.

• Curbing conflicts of interest. Some members of Congress and consumer advocates want to keep scientists with industry ties from serving on FDA advisory boards. FDAAA allows some conflict-of-interest waivers so that important experts will be able to provide advice when needed. FDA has issued new policies to make conflicts of interest and waiver policies more transparent and is taking steps to meet Congressional requirements for reducing waivers overall.

Concerns that drug manufacturers exercise too much control over FDA policies has emerged related to the composition and role of the new Reagan-Udall Foundation, created by FDAAA to support innovation and enhance safety for FDA-regulated products. FDA named a 14-member panel, chaired by former FDA commissioner Mark McClellan, to oversee the new organization. But Rep. Rosa DeLauro (D-Conn), who chairs the House Appropriations subcommittee in charge of FDA's budget, has objected that industry influence may lead the foundation to encourage development of more profitable, but not necessarily safer, products. DeLauro plans to hold hearings on Reagan-Udall and other conflict of interest issues, a sign that FDA and pharmaceutical manufacturers will continue to face many challenges in the year ahead.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, jwechsler@advanstar.com