Inside Washington: Risk Management and Pricing Concerns Shaped FDA Policy in 2003

This past year was filled with tremendous activity at FDA and other government agencies involved with healthcare, biomedical research, and national security. Scientists completed sequencing the human genome, increasing optimism for a period of unprecedented advances in biomedical discovery. Plus, the need to protect the nation from biological warfare promises to stimulate the development of new vaccines and medical treatments (see "Combating Bioterrorism, " below).

Scientific achievement was not alone in spurring industry and government action this year. Rising public pressure for more affordable medicines also shaped a wide range of policy initiatives in 2003. Congress tackled the daunting task of crafting a prescription drug benefit for the nation's more than 40 million Medicare beneficiaries. Meanwhile, consumers skirted existing law by purchasing less expensive drugs and biologics from foreign sources.

FDA responded to these developments with regulatory initiatives to lower drug costs. The agency continues its mission to improve the drug manufacturing process while accelerating the testing and approval of new drugs and biologics and low-cost generics. And, in an effort to reduce adverse drug events, it is promoting electronic prescribing and improving product labels.

Encouraging Innovation

In his first year in office, FDA Commissioner Mark McClellan unveiled a steady stream of initiatives designed to streamline FDA internal regulatory procedures and clarify testing requirements for new therapies. Such actions aim to reverse the recent slow-down in applications for innovative new drugs and biologics. Also, McClellan is emphasizing the application of risk management strategies to FDA policies and programs, a concept he explained in FDA's Strategic Action Plan, issued in August 2003. Risk management uses FDA's limited resources to best protect public health at the least cost by focusing more oversight on higher risk products and processes.

FDA also is crafting policies that encourage voluntary compliance with agency regulations. According to McClellan, initiatives that reduce the time, cost, and uncertainty of developing new biotech therapies can improve public health; cutting medical product development costs facilitates consumer access to effective new treatments.

A number of FDA initiatives aim to further reduce healthcare costs by speeding new therapies to market and by reducing inappropriate drug use.

Accelerate application reviews. Last January the commissioner unveiled a plan to increase innovation in medical technology by clarifying regulatory standards and test data requirements. The goal is to process more applications in only one review cycle (Inside Washington, March 2003).

Focus on chronic diseases. The agency promised more guidance documents to better define the development requirements of new treatments for diabetes, cancer, and obesity — high priorities for government health agencies.

Streamline manufacturing processes. FDA continued its two-year campaign to overhaul FDA regulations governing GMPs. Launched in August 2002, the GMP update revises policies governing electronic records and signatures, manufacturing plant inspections, and postapproval manufacturing changes. Further initiatives and final rules are expected early next year.

Reduce medication safety problems. FDA held a three-day workshop in April to examine how risk management approaches can promote the safe use of medical products. Agency officials, manufacturers, and health professionals commented on FDA proposals for more extensive preapproval testing of new products to better identify and study safety concerns. Participants also discussed how manufacturers could develop pharmacovigilance plans to detect and analyze safety issues that arise after a product reaches the market. FDA wants sponsors to do more to identify risk "signals" and to develop postmarketing risk management programs for drugs with increased safety concerns.

FDA also is calling on manufacturers to print bar codes on drug packages, vials, and even individual dosage forms to ensure that the right patient receives the right dose at the right time. In March, FDA proposed a requirement that manufacturers print bar codes with national drug codes on packages. The agency is finalizing rules on these issues, and implementation will be a major challenge in coming months.

Promote generic prescribing. To facilitate public access to more affordable medicines, FDA is streamlining its generic drug oversight process and emphasizing the high quality and interchangeability of generics. Agency officials also have signaled interest in exploring avenues for authorizing generic versions of biotech therapies. In its October response to several citizen petitions, FDA asserted its authority to approve new therapies based on earlier published studies of the innovator drug. The agency is expected to seek more input from manufacturers, healthcare providers, and consumer groups on how to balance the desire for less expensive equivalent treatments while maintaining incentives for manufacturers to develop innovative biotech products.

Combating Imports and Counterfeits

FDA also is leading the campaign against importing more low-cost, but unapproved, drugs and biologics from Canada and other nations. McClellan and other federal officials insist that reimportation can bring unsafe counterfeit products into the United States, particularly via Internet pharmacies, many of which operate overseas. Despite these arguments, the House approved a bill in July permitting reimported drugs with no requirement that FDA first certify these drugs will not harm public health (Inside Washington, September 2003). The debate heated up in September when FDA asked the Department of Justice to file suit against RxDepot — a leading pharmacy website — for arranging drug imports from Canada.

FDA's warnings continue to fall on deaf ears as several states and local governments devise plans to buy medicines from Canada to cut spending on drugs for Medicaid and local pharmacy benefit programs. The public generally believes that drugs and biologics from Canada are just as safe and effective as those made in the United States. A recent Harris Poll shows consumers oppose efforts by government and industry to prevent access to less expensive foreign medicines, and a growing number are purchasing or would like to shop abroad for prescription drugs.

According to FDA and manufacturers, the broader problem is that illegal reimportation opens the door for counterfeit and unsafe products to enter the US market. Counterfeiters have targeted several high-cost biologics, raising serious health concerns. FDA's Counterfeit Drug Task Force issued an interim report in October describing how counterfeit products slip into the US drug distribution system. The agency proposes an attack on counterfeiting through a mix of stricter licensing standards for wholesalers and distributors; technological innovations that manufacturers can use to identify bogus products; and more public education to help health professionals and consumers easily identify counterfeits.

Paying a Fair Share

One way to deter illegal importing and counterfeiting, says McClellan, is by reducing the price differences between US and foreign pharmaceuticals. At the National Press Club in October, McClellan spelled out FDA's concerns and pointed to international pricing disparities in drugs and biologics for escalating the reimportation problem. McClellan noted that Americans pay about half of all prescription drug costs worldwide (and support most pharmaceutical R&D). Consequently, Americans without insurance coverage are seeking cheaper, foreign medicines. Deeming this a global public health issue, he called for a "better, global solution to the problem of affordable drug pricing," and said that "if all countries pay their fair share," needed treatments will be "more affordable for everyone."

Combating Terrorism

Another high-profile challenge for FDA is to identify research paradigms for countermeasures to bioterrorism and facilitate emergency access to needed treatments. CBER sponsored a workshop in October to encourage industry development of counterterrorism vaccines, diagnostics, and therapies. FDA also is working with industry to identify antiterrorist uses of existing medical products, activities that may receive resources through Project BioShield legislation.

Manufacturers are concerned, however, that the legislation fails to provide sufficient protections from liability for such high-risk products, which may limit private sector investment. A key challenge for the Bush administration is to clarify government commitments to providing a market and support for new biomedical counterterrorism measures.BPI